Rod St. Aubyn: The Obamacare Standoff

After reading a news article in the Sunday Fargo Forum, I wondered if the state and the nation will be engaged in real standoff regarding the Affordable Care Act (ACA) or more commonly referred to as Obamacare.  Will this situation result in a Special Legislative Session in ND sometime this late summer or early Fall?

Arguments will be heard on March 4 in the US Supreme Court on a case dealing with subsidies for many enrolled in the ACA.  The problems are a result of the specific language in the Act that subsidies are available for state-based exchanges.  The language does not address those enrolled in the “Federally-facilitated Marketplace”.  Nor does it address the “Federally-supported Marketplace”, or the “State-partnership Marketplaces.”  The states, including DC, went different paths.  Only 14 states established State-based Marketplaces.  Most of those had significant problems at start-up, but have since seen improvements.  Three went with Federally-supported Marketplaces, 7 established State-partnership Marketplaces, while 27 states, including ND, elected to forgo a state based exchange and instead decided that the Fed’s should run their exchange.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]If the US Supreme Court rules that the subsidies only go for citizens enrolled in state-based exchanges, what will the states do?  What will Congress do?[/mks_pullquote]

A ruling is expected in June.  Some argue that it was Congress’s intent that subsidies were meant for anyone meeting the financial guidelines and was not meant for only those in a State-based Marketplace.  Others argue that the subsidies were intentionally meant for only those in a State-based Marketplace as an incentive to get more states to build their own exchanges.  During the formulation of the ACA, it was my understanding that the latter was the intent and plain language within the act supported that position.  However, now it is up to the US Supreme Court to make the final decision.

Now comes the dilemma.  If the US Supreme Court rules that the subsidies only go for citizens enrolled in state-based exchanges, what will the states do?  What will Congress do?  Will the Court rule on the “Federally-supported Marketplaces and the State-partnership Marketplaces” as well?

Republicans control both the US House of Representatives and the US Senate.  They want ObamaCare to fail and substitute it with their own ideas without an insurance mandate.  But the President will be sure to veto such ideas.  The Republicans don’t have the votes to override a Presidential veto.  If the Court rules against the administration, this spells disaster for ObamaCare.

But will pressure from constituents who currently get subsidies force Congress to react?

States are reacting with uncertainty.  Responding to queries by the media:

• 5 states, Louisiana, Mississippi, Nebraska, S. Carolina, and Wisconsin, stated that they would definitely NOT establish a state-based exchange.
• Georgia, Missouri, Montana, and Tennessee stated that they doubted that their legislatures would establish a state-based exchange.
• 6 states (including SD) were considering contingencies, but faced logistical or political barriers.
• 10 states did not respond and 3 others had no comment.
• Iowa, Wyoming, Oklahoma, and West Virginia said they were not currently considering setting up a state exchange.
• Alaska has not ruled it out.
• Only Arkansas stated that they are moving forward to establish a state-based exchange by 2017.

The article in the Fargo Forum quotes Drew Altman, who heads the non-partisan Kaiser Family Foundation,  “We can say with some confidence that the insurance markets are likely to melt down, because only the sick people will stay in them and the others will find it unaffordable.”

If the US Supreme Court rules that subsidies are only available on state-based exchanges, what will ND do?  Will ND constituents currently receiving subsidies pressure the Governor to have a special legislative session to establish a state-based exchange?  Or will North Dakotans push to create the “melt down” as described by Drew Altman?

Be prepared.  Depending upon how the Court rules, we could be faced with an “ObamaCare Standoff” between the Administration and Congress and many of the states.  Expect an interesting political summer and fall.