One of the big, looming questions of 2015 is this: Will the Supreme Court really gut Obamacare subsidies in the three dozen states on the federal exchange, potentially depriving millions of health coverage at a moment when the law, now heading into its second year, is clearly working as intended?
One thing to watch as we approach the SCOTUS hearings on King v. Burwell this spring is how many people are newly qualifying for subsidies in those states as this year’s enrollment period continues.
The Department of Health and Human Services has released a new report on enrollment data that suggests that number could be very large — which could (theoretically, at least) make it harder for SCOTUS to gut the law.
The administration says around 3.4 million people have signed up on the federal exchange in the new enrollment period. For various bureaucratic reasons (we don’t know who will end up paying or how many are just renewals), it’s too early to determine how many new people would be adversely impacted by a SCOTUS ruling against the law. But as Margo Sanger-Katz explains, the new HHS report also offers a rough guide as to what we might expect, because in general terms a very high percentage of those on the federal exchange appear to qualify for subsidies:
Over all, it found, customers who were using HealthCare.gov to pick insurance plans — some new customers, and some renewing customers — were overwhelmingly likely to qualify for federal subsidies to help them pay their premiums. On average, the report found that 87 percent of these customers were eligible for subsidies, with higher percentages in some states — up to a high of 95 percent in Mississippi.
Those numbers don’t include everyone in the marketplace; people who were enrolled in plans this year and simply automatically renewed them weren’t counted. But it’s reasonable to think that the proportion is representative. Last year’s number at the end of open enrollment was an average of 85 percent. A different report…said that a total of 6.5 million people in those states had selected plans or been automatically renewed into plans as of last week.
So we could be looking at a lot of people who would lose subsidies in the event of a bad SCOTUS ruling, perhaps more overall than previous estimates of around four million. And the enrollment period still has six weeks to go.
Larry Levitt of the Kaiser Family Foundation adds key context, noting that the biggest enrollment bumps are occurring in big states on the federal exchange, rather than the state ones. “The big numbers of new enrollees are coming from states that are not running their own marketplaces, such as Florida and Texas, where the politics don’t seem amenable to them running their own marketplaces in the event of a Supreme Court ruling against the law,” Levitt tells me.
What this means: In federal-exchange states where the largest numbers of people might lose subsidies if SCOTUS rules against the law, state officials might be less likely to then set up their own exchanges to keep the subsidies flowing. Adds Levitt: “The impact of a potential Supreme Court decision against the law continues to grow.”
The reason this matters: Highlighting the potential for such a SCOTUS decision to result in widespread disruptions and dire consequences — both for millions who might lose coverage and for the insurance and health care industry in these states — may figure heavily in the government’s strategy for winning the case. Now, it’s possible that expected swing vote John Roberts won’t bother considering such disruptions and consequences in reaching his decision. But who knows — he just might. And the stakes continue to grow.
* U.S. FINALLY SHAKING OFF AUSTERITY: The New York Times has a nice overview of an important trend: We are now seeing government spending edging up again, and that is helping nudge along a recovery that now appears to be gaining steam:
For the first time since 2011, local, state and federal governments are providing a small but significant increase to prosperity…Across the nation, state and local governments, Democratic and Republican alike, are spending on projects that were stalled…Federal spending for repair and construction of roads, schools and hospitals is increasing…Looking ahead, some economists are counting on spending on infrastructure and other capital investments to help nudge the economy ahead.
The larger context here is that Republicans and conservatives like to claim the recovery is the result of the sequester and other spending cuts. But as Danny Vinik explains, exactly the opposite is true: The easing of austerity is taking the brakes off the recovery.
* REPUBLICANS BATTLE OVER MEDICAID EXPANSION: The Associated Press reports that Republican governors in places like Tennessee and Wyoming — not exactly deep blue bastions — now want to embrace the Medicaid expansion. Yet they are running into resistance from conservative politicians in their states. GOP governors are making a crazy argument to these resistant politicians:
These governors note that their residents pay the federal taxes that fund expansions, so declining to participate amounts to subsidizing other states without receiving benefits.
The governor of Tennessee, meanwhile, is staking out an even nuttier position, arguing that expanding Medicaid is the “morally and fiscally right thing to do.” But to no avail, because, basically, #Obummercare.
* DEMS LIKELY TO RESIST TRADE DEALS: Politico has a useful overview of the coming battle among Democrats over trade deals the administration is negotiating involving countries around the Pacific Ocean and the European Union. There is broad consensus that these deals will need bipartisan support, which means that, with Republicans likely to back them, their success will turn on whether Obama can rally Congressional Democrats by assuaging their concerns about labor and environmental safeguards and the lack of transparency around the deals.
The recent Elizabeth Warren-led fight over the budget deal giveaway to financial institutions suggests the battle over these deals may bring about another defining Democratic Party schism.
* ANOTHER DEBT CEILING FIGHT? REALLY???? The Hill has an overview of the key dates to keep an eye on in 2015 when it comes to the ways Republicans will try to use fiscal policy to attack Obamacare, environmental regulations and otherwise try to reduce the size of government. This jumps out:
Congress in February approved a “clean” increase of the debt ceiling that authorized the Treasury Department to borrow as needed, without limit, through March 15, 2015. That arrangement ends on March 15, when the debt limit will automatically take effect….GOP leaders are facing new pressure to demand spending cuts in exchange for a debt increase — something Obama and Democrats are likely to resist.
Translation: GOP leaders are facing “new pressure” to demand unilateral concessions from Democrats in exchange for not destroying the economy. How many times does this have to fail before Republicans stop pretending this gives them leverage?
* A POSSIBLE COMPROMISE ON INFRASTRUCTURE? The Wall Street Journal reports that the White House is looking to de-emphasize coming executive actions in hopes of finding areas of legislative compromise with the new GOP majority:
White House officials said Mr. Obama will still take some executive actions over the next year, particularly on issues like climate change, where he and Republicans on Capitol Hill remain at odds. But his primary emphasis will be on a narrow set of policies where he might find agreement with Republicans, namely trade pacts, an overhaul of the corporate tax code and funding infrastructure projects.
Okay, but wouldn’t a compromise on infrastructure require Republicans to agree to new revenues to fund new spending? If so, why does anyone think that’s likely?
* KEEP AN EYE ON SENATE RETIREMENTS: The Hill also rounds up 10 Senators who may retire in 2016. Two key ones are Chuck Grassley of Iowa and Marco Rubio of Florida (who may run for president). Both would give Dems additional pick-up opportunities on an already-good map which has them already vying for a number of GOP-held seats in states carried by Obama.
On the other hand, Senator Joe Manchin of West Virginia could retire, too — and his seat would very likely go to Republicans.
* A GLOBAL VIEW OF INCOME INEQUALITY: Paul Krugman steps back and offers the global view: While income has soared among the world’s elites and among middle classes in developed nations, it has stagnated badly “around the 20th percentile” in many parts of the world.
Who are these people? Basically, the advanced-country working classes…the travails of workers in rich countries are, in important ways, the flip side of the gains above and below them….soaring incomes at the top were achieved, in large part, by squeezing those below: by cutting wages, slashing benefits, crushing unions, and diverting a rising share of national resources to financial wheeling and dealing…the wealthy exert a vastly disproportionate effect on policy. And elite priorities — obsessive concern with budget deficits, with the supposed need to slash social programs — have done a lot to deepen the valley of despond.
As Krugman notes, if something isn’t done about this, bad things just might happen.