The Obamacare Supreme Court Subsidy Challenge––Surprising Comments From Anthony Kennedy And Maybe A Way Out For John Roberts

The Supreme Court heard oral arguments yesterday in the King v. Burwell case that would throw out the Obamacare subsidies for millions of people now receiving them in the federally run health insurance exchanges.

It sure sounded like perennial swing vote Justice Anthony Kennedy is ready to save the subsidies and Obamacare given his comments suggesting a finding for the plaintiffs would end up coercing the states into building an insurance exchange––something that would present Kennedy with a "serious constitutional problem."

But I was also struck by this line in a Washington Post article about the oral arguments: "More than the other justices, Kennedy is the one most likely to think out loud during oral arguments, trying out various theories and posing quandaries for lawyers."

Translated: It ain't over til it's over.

At one point, conservative Justice Samuel Alito asked if perhaps the Court could delay the effect of a ruling ending the subsidies thereby giving the Congress and the states time to remedy the fallout.
Will this be the tack the conservative Justices will follow to get another perceived swing vote, Chief Justice John Roberts, on their side this time?

Many observers have been wondering out loud, including me, how Roberts would vote to deal Obamacare such a serious blow now when he didn't three years ago in the face of the challenge over the constitutionality of the individual mandate.

By finding for the plaintiffs and then allowing a substantial period before the ruling takes effect, conservative Justices might argue, either the Congress would have time to fix the duduk perkara or states would have the time to decide whether or not to set up an exchange and keep the subsidies for their residents.

So, the conservatives would argue, Roberts would have the opportunity to vote with the conservatives and craft a way for the elected representatives to avoid any catastrophic outcome. His Court would not be responsible for causing a major insurance market mess and he would have voted for a judicial outcome that followed the plain text of the law.

As a practical matter, having just watched the House Republican fiasco over holding up funding for the Department of Homeland Security as a means of reversing Obama's recent actions for illegal residents––that resulted in Republican leaders having to heavily rely on Democratic votes to bail them out, giving this Congress time to agree with Obama on fixing Obamacare would likely be a fools errand.

But many state legislatures and governors would likely act to quickly do the paperwork––and it wouldn't be much more than simple paperwork––necessary to create a state-based exchange and then contract with the feds to continue running it, without consumers having to lose their subsidies.

And, other states might well not act to remedy the problem––like Florida and Texas that have more than two million Obamacare subsidy eligible residents between them and have legislatures with a history of doing everything they can to undermine Obamacare.

But as the conservative Justices might argue, that is their decision and not something the Court can be held responsible for.

Then there is Justice Kennedy.

The New York Times: Has Obamacare Enrollment Stalled?

Readers of this blog know that I have made a number of points about Obamacare in recent months:

• The number of people signing up for Obamacare is well below the level necessary to make the rates stable over the long-term––the longstanding insurance industry standard calls for getting 75% of an eligible group in order to have enough healthy people in the pool to pay the costs of the sick people. I have reported to you that less than half of the subsidy eligible have signed up so far.
• The Obama administration's enrollment estimates, that they now use to celebrate their 2015 enrollment results, were low ball estimates that aren't close to the kind of enrollment they need to make the kegiatan both politically and financially sustainable.
• Obamacare's overall enrollment is coming up way short of original projections and has slowed down considerably in the most recent second open enrollment.

In the face of these comments you have likely noted any number of press reports in the past weeks pointing out just how well Obamacare has been doing.

But now none other than the New York Times has picked up the same themes I have been talking about for months.
Here are some excerpts from Monday's article:

On average, so far only 43% of eligible people in the federal exchanges and 38% in the state-run exchanges picked plans.

"I think the concern about running out of momentum is legitimate," said one expert. He went on to point out that states should be aiming to sign up 65% to 75% of eligible residents. "If we end up running out of gas before 50%, that's very disappointing."

Obamacare's 2015 market share increase was "much smaller" in the state-run exchanges that did comparatively better the first year––"If the states that did everything right the first year and have stalled, what does that say about what we can expect from the states in year 3?"

"Over all, though, the gap between state- and federal-run exchanges this year becomes worrisome when considering that most models for Obamacare estimate that it will take about three years for the kegiatan to hit peak enrollment, and that the peak will be somewhere around 24 million people. The Congressional Budget Office estimates that 10 million more people will enroll in plans next year [less than 4 million more enrolled this year]."

Another expert is quoted as asking, "Why did the states hit such a wall. I'm starting to wonder if we've overestimated this whole thing."

So, why is Obamacare hitting a "wall" well before either achieving the original enrollment estimates or sustainable enrollment levels?

Maybe the dogs don't like it.