2020 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

In which the Wall St. Journal finally realizes what I've been saying since July

Way back in July, when the Halbig v. Burwell case was on the media radar, I wrote about the potential backlash against Republican governors/legislators who failed to take any action towards establishing a state-based exchange to salvage the tax credits for tens or hundreds of thousands of their own residents. At the time, I speculated that doing so could be as simple as slapping up a simple splashpage & redirect to HC.gov, which I termed the "Grand Slam Solution" (ie, "for less than the cost of a Denny's Grand Slam breakfast...")

...the "domain solution" I describe above would still have one more hurdle, of course: You'd still have to get the individual states to agree to pony up $9.95 per year and set up a simple domain redirect. Illinois has already done so; presumably other blue-leaning states would follow. That would leave about 30 states, give or take, including Texas, Florida and so forth.

However, can you imagine the public outcry from residents of those states when they find out that they have to return thousands of dollars to the IRS because their own state government isn't willing to pay the price of a Denny's Grand Slam breakfast (with generous tip) to keep things in place? Somehow I don't think even ACA-hating residents of Oklahoma or Tennessee would stand for it.

In another post, I made a quip about a sample attack ad which I could easily see being put together:

"Thousands of Louisianans will have to pay hundreds of dollars in higher taxes...all because Bobby Jindal is too petty to shell out $10 bucks for a domain name!!"

Well, as it turns out, it's a wee bit more complicated to set up a legally-approved "state-based exchange", even if it's simply an "exchange in name only" which still offloads all of the technical backend over to HC.gov. Even so, the Halbig/King cases are well-known throughout every state government operating off of the federal exchange this year--there's no way any of them could try and claim a decision in favor of the plaintiffs (and against the Obama administration) was completely unexpected or unknowable.

In short, there could still be a massive backlash against any state which failed to take action...which is to say, just about all 35 of them (the exact number may vary depending on a few special cases such as Oregon, Nevada, New Mexico and Arkansas).

A few days later, Mark Totten, the Democratic candidate for Attorney General here in Michigan, made this point for me when he issued the following press release:

Schuette Forces Massive Tax Hike on Working Michigan Families

July 22, 2014 / FOR IMMEDIATE RELEASE

Mark Totten for Michigan Attorney General / July 22, 2014

Federal court backs Schuette’s crusade to raise taxes by nearly $5,000 on a half-million Michigan families, while shipping Michigan tax dollars to California and New York

KALAMAZOO — Today a federal court in Washington, D.C. backed Michigan Attorney General Bill Schuette’s crusade to deny tax credits for Michigan families purchasing health insurance. Under today’s ruling sought by Schuette, nearly a half million Michigan families will lose an annual $4,700 tax credit, while Michigan taxpayers will continue to pay for families in other states to receive these credits. (Numbers and sources below.)

Now, Totten ended up losing his race, but even so, you begin to see the attack ads which the GOP is opening itself up to in 2016 if the SCOTUS rules for the plaintiffs in King v. Burwell. There's a big difference between warning about a massive tax hike which may happen a year from now and an actual massive tax hike which millions of people were really hit with...and which in many cases might not actually hit their pocketbooks until April 2016, in the middle of a Presidential campaign year.

Cut to a few days ago:

After relentlessly promoting several right-wing legal challenges to the Affordable Care Act (ACA) for over a year, The Wall Street Journal seems to have just now realized that the cases' potential to deny affordable health care coverage to millions of Americans is a catastrophe for the GOP -- even as it continues to downplay the human costs.

...This group is right about ObamaCare in the abstract, but the Treasury must comply with court orders 25 days after they're issued and such an abrupt policy shift will be a mess. The 17% of U.S. GDP that is health care has spent five years reorganizing to accommodate ObamaCare's dictates, and the watch-it-burn caucus is underestimating the economic, political and media blowback.

The White House could have avoided the problem by obeying its own law and not passing out illegal subsidies, but the public may not notice the difference once the press corps discovers a cancer patient or two who can't afford her ObamaCare plan without taxpayer support. This threatens to replay the "if you like your doctor, you can keep your doctor" controversy in reverse, with Republicans accused of denying care to the sick.

...Contrary to the Journal's suggestion, however, there is no guarantee that these low- and moderate-income people will become health insurance "refugees" and move to another state in order to take advantage of the full protections of the ACA. More likely, they and their home states would suddenly find themselves denied of billions of federal dollars intended to make health care affordable, stuck with GOP legislators who have shown no interest in health care reform on either the state or federal level.

Now don't get me wrong: Republicans, FOX News, Rush Limbaugh and so forth would do everything in their power to pin the blame for this massive tax hike on the Democrats. And perhaps that would work. Still, that's an iffy proposition. The law will have been in place for over 5 years by that point, including 2 full years of open enrollments and tax credits being doled out. The states had ample time, opportunity and funding to set up their own exchanges, including nearly a year to get their ducks in a row from the point that the SCOTUS agreed to take up the King case.

I'd say the odds are about 50/50 as to whom the bulk of the public will blame for it. And as I noted last summer, there's a big difference in the politics between Medicaid expansion and middle-class tax credits:

[Re. Medicaid expansion]: As far as I can tell, the Republican mindset was this: Poor people don't vote. Therefore, screwing over poor people = brownie points from the GOP base without any potential downside.

However, I think they forgot something important: Regular Medicaid might only apply to poor people, but the Medicaid expansion provided for by the ACA applies to many lower-middle class people...and they do vote (at least in far greater numbers than the "dirt poor" anyway).

In this case, the potential backfire is even greater, for two reasons.

First, when those states denied Medicaid expansion, they were denying those 5 million people something which didn't exist yet. With the tax subsidies, you're yanking away cold hard cash from millions of people who already are receiving it. That's a huge difference. It's one thing to be promised something and then have that promise recalled; it's something else to actually have something in hand and then be told that you have to give it back. Ask people how they'd feel about expanding Medicare vs. having their existing Medicare taken away and you'll see my point.

Secondly, I don't know the exact voting patterns of different socioeconomic levels, but I have to imagine that most of the people receiving ACA subsidies are even more likely to be active voters than those who were screwed out of Medicaid a few rungs down the econimic ladder.