Supreme Court ruling expected soon could invalidate most Obamacare subsidies
Zelizer: While the GOP may get some blame, the real losers would be Democrats
Editor’s Note: Julian Zelizer is a professor of history and public affairs at Princeton University and a New America fellow. He is the author of “Jimmy Carter” and “The Fierce Urgency of Now: Lyndon Johnson, Congress, and the Battle for the Great Society.” The opinions expressed in this commentary are his.
Democrats and Republicans are sitting on the edge of their seats, waiting to see what the Supreme Court will decide in King v. Burwell, the looming decision about the Affordable Care Act, or Obamacare, as it has come to be known.
If the Supreme Court agrees with the challenge, an estimated 13 million people will lose their federal health insurance subsidies. The plaintiffs have argued that based on the literal reading of the legislation, the government is only supposed to provide citizens with subsidies in states that set up their own health care exchanges (a total of 16 states). The sentence in the law upon which their claim is based, The New York Times reported, was based on a sloppy error made during the drafting process. Regardless, the plaintiffs argue that in states where residents rely on federal subsidies (34 altogether), the law does not provide for subsidies.
If the Supreme Court ruling takes away their subsidies, a substantial number of the citizens in those states will not be able to pay for their health care. Many younger and healthier Americans will take the risk and decide that they won’t purchase insurance, a trend which would send prices skyrocketing. An ever-growing cycle would be devastating.
Besides the policy implications, the political impact of such a negative ruling would be enormous.
Experts have been scrambling to figure out what political consequences the decision would have. For a while, there were many observers who believed that the decision would fall hardest on Republicans. After all, 26 of the 34 states that would be directly affected, where federal exchanges are operating, are under Republican control.
In these states, there are 22 Senate seats held by Republicans up for grabs in 2016. If the court eliminates the subsidies, Republican governors and legislatures will be dealing with an angry population and they will come under immense pressure to act. If Republicans refuse to fix a situation that has arisen from a drafting error, they could receive the blame.
Yet recently there have been more voices warning that Democrats are the party that will take the hardest hit. After all, Jeffrey Toobin convincingly wrote in The New Yorker that this is a program clearly associated with Democrats; they will be blamed for its failure. Toobin quotes Colin Powell’s famous “Pottery Barn rule” that he used to describe the fallout from U.S. military intervention in Iraq – “you break it, you buy it.”
Toobin notes: “To the vast mass of Americans who follow politics casually or not at all, Obamacare and the American system of health care have become virtually synonymous. … So if millions lose insurance, they will hold it against Obamacare, and against Obama.” Writing for The Week, Scott Lemieux generally agrees. “The problem is that a separation-of-powers system dilutes accountability, and voters generally lack the information that will allow them to sort out the blame for a given disaster. Presidents generally get both more credit and more blame for what happens under their watch than is justified by their power.”
Besides the immediate issue of which party will get greatest the blame for the loss of subsidies, a Supreme Court ruling against the program would have a number of broader detrimental effects on the Democratic Party.
A blow to confidence
Most important, the decision would be a blow to confidence in government. The fact is that Democrats remain the party that believes government offers a positive role in dealing with domestic problems, while Republicans – despite frequent hypocrisy – are the party that argues free markets should dominate.
The collapse of the largest and most ambitious social program since the 1960s would be devastating. Even in relatively blue states, such a ruling could hurt the confidence that Americans have that government can be an effective vehicle for dealing with domestic issues. A ruling like this would also greatly deflate the confidence Democrats would have in the next contentious fight over a proposed program.
A negative ruling would also shift public attention to the future of the ACA program and reopen a debate over federal health care policy that has been fading in recent months. For Democrats running in 2016, this would be a bad thing.
Republicans are more than happy to reopen the debate over Obamacare. It is an issue that galvanizes the right wing and takes attention away from the improvements in the economy that have helped strengthen the president’s approval ratings.
The debate would instantly shift from one about improving economic conditions to the collapse of the president’s program. It would contribute to a narrative about the “failures” of a presidency that many Democrats believe has done a pretty good job moving the nation forward since the crisis years of 2008 and 2009. This would take much of the wind out of Democratic campaigns and stimulate a debate more favorable to the GOP.
The end of subsidies could easily aggravate divisions within the Democratic Party just as Hillary Clinton is trying to bring all the factions together for 2016. Many progressive Democrats were never happy with ACA. They believed that the program was a watered-down version of national health insurance or even the market-based policy that Bill Clinton failed to pass in 1993.
Until the very end of the ACA debate, many progressives had opposed the proposal and championed the “public option” instead, a mechanism through which the federal government would provide insurance in competition to the private models.
The failure of this program would confirm their beliefs. If ACA proves to be susceptible to a negative court ruling, many progressives will find it hard not to say something. They will argue that this is why centrist liberalism doesn’t work.
Sen. Bernie Sanders will find it tempting to remind the administration that he and his allies wanted a much bolder and more direct form of government benefit that, in their minds, would have been more popular and more durable. While a little discord is a good thing for any party, as the base can push mainstream candidates in bolder directions, this kind of fight over who’s to blame for the failure of a major policy could turn more destructive – looking more like the Democrats’ internal battles over Vietnam in 1968.
So Democrats should be worried. While it is true that Republican governors will come under pressure to find insurance for their constituents if the Supreme Court takes apart the federal subsidies in their states, overall, in the short term and the long term, such a decision would be a huge blow to the Democratic Party.