DailyKOS‘ Joan McCarter uses an amalgamation of articles that one can make into an important argument. It is very unlikely that the Supreme Court will kill Obamacare with a thousand cuts by eliminating subsidies on the federal exchanges.
Republicans’ legal challenge to Obamacare is bogus and they know it
Republicans are working hard to make the general public and the U.S. Supreme Court believe that Congress intended to cut millions of people out of getting subsidies to buy insurance under Obamacare. That’s to prop up the argument of the plaintiffs in the King v. Burwell case intended to gut the law. The plaintiffs, and Republicans, say that the law was written on purpose to exclude people getting insurance through the federal health exchange from getting subsidies. The problem is, history doesn’t reflect it actually happening that way. In fact, many of these Republicans are contradicting statements they made back when the law passed, like Sen. Orrin Hatch (R-UT) and Rep. Paul Ryan (R-WI). They’ve got an even bigger problem making the case now, as uncovered by Brian Beutler.
Back in 2011, one of the first rollback efforts of the law was to repeal the 1099 tax provision of the Affordable Care Act that required all businesses to report many more business expenses, a provision that was supposed to raise over $20 billion for the law. The way Republicans intended to pay for that lost revenue was by setting much stricter requirements for people who received subsidy overpayments; that is by taking much more—in some cases all—of a subsidy back come tax time for an overpayment.
Remember, too, that in 2011 most of the states had made clear whether or not they were going to establish their own exchanges, which is the issue in the King case. So lawmakers then knew that a majority of states were not going to create their own exchanges and would fall back on the federal one. Beutler takes it from there.
The congressional budget office scored the plan as essentially deficit neutral, and Republicans voted for it overwhelmingly. But you see the problem here. If the ACA plainly prohibits subsidies in states that didn’t set up their own exchanges, then there would be no subsidies in those states to claw back. And by April 2011, when the clawback passed, we already knew that multiple states were planning to protest ACA implementation and let the federal government set up their exchanges, including giant states like Florida, which now has a million beneficiaries. They would have needed a different, or additional, pay-for. […]Congress repealed the 1099 provision at an important moment—after multiple states announced that they would step back and let the federal government establish their exchanges, but before the IRS issued its proposed rule stipulating that subsidies would be available on both exchanges. The only thing Congress had to go on when it stiffened the clawback mechanism was its own reading of the Affordable Care Act, and Congress behaved exactly as you would expect. It operated with the understanding that subsidies were universal. [emphasis added]
The CBO scored the repeal of this provision as budget neutral—the subsidy clawback replaced the 1099 revenue, something it could not have done if the only people getting subsidies were the people buying on state exchanges. Republicans clearly accepted that calculation in 2011, because that’s how they were reading the law, too. So to add it up, Republican lawmakers in 2010 were talking about the subsidies as being universally available, none of them—none—were talking about how they were restricted to just some states. But they weren’t just talking about subsidies being universal, they were legislating on that assumption. Which means they’re lying now.