A Supreme Court ruling against the Obama administration in King v. Burwell, according to conventional Beltway wisdom, will create serious political problems for governors and legislators in the 34 states that declined to set up Obamacare insurance exchanges. Most of these officials are Republicans, the thinking goes, and will thus be blamed for letting petty partisanship deprive their constituents of subsidies while plunging state insurance markets into chaos. Public wrath, we are told, will eventually force them to create PPACA exchanges. However, a new voter survey conducted in the affected states suggests that this is very unlikely to occur.
According to the survey, published by the Foundation for Government Accountability (FGA), the refusal of governors and state legislators to create Obamacare exchanges would not be seen by the electorate as the cause of any lost subsidies or disruptions in their insurance markets: “Instead, the vast majority of the voters are likely to blame Congress or the IRS.” This view is held by more than two-thirds of the electorate in the 34 states that would be impacted by the Supreme Court ruling—46 percent believe that the subsidy problem is the fault of sloppy lawmaking in Congress, while 22 percent believe the problem originated with the IRS.
King v. Burwell is, of course, the case whose petitioners want the Court to force the Obama administration to abide by the provisions of the “reform” law that govern the distribution of insurance subsidies. The text of PPACA requires that all subsidies, and the penalties which they will inevitably trigger, must flow through exchanges established by the states. Due to the refusal of nearly three-dozen states to set up these marketplaces, the Obama administration was forced to set up its own exchanges in those states. Soon thereafter, the IRS revised its original interpretation of PPACA and began issuing subsidies through those federal entities.
Consequently, hundreds of thousands of people in 34 states are receiving “premium assistance” to which they are not entitled. A ruling against the Obama administration will mean that these subsidies will stop—even if the Court delays the cutoff until the end of 2015. This will come as a very unpleasant surprise to most of the recipients. The White House has refused to warn them, or admit to the general public, that there is any possibility that this taxpayer-funded largesse might be curtailed. Indeed, a recent Kaiser survey found that 56 percent of Americans have no idea that there is even a legal challenge before the Court involving Obamacare subsidies.
There can be little doubt, then, that there will be a lot of angry people in a lot of states if the Supreme Court orders the Obama administration to stop issuing subsidies through its federal exchanges. But, contrary to the view that prevails inside the Beltway, the FGA survey clearly indicates that voter outrage will be focused on the people who created the legislative morass whose supporters still insist on calling the “Affordable Care Act.” Moreover, as FGA’s Jonathan Ingram, Nic Horton, and Josh Archambault wrote shortly after their survey was published, “Voters don’t want their states to bail out Congress or the Obama administration.”
Because the voters believe the subsidy controversy is an artifact of a “poorly written law,” and that the federal government produced this slipshod work, they want the problem corrected where it was created, inside the Beltway. They are not merely unlikely to hold their state officials responsible for fixing this muddle, they are actively opposed to such action. In fact, they are inclined to vote out state officials who attempt set up PPACA marketplaces in response to a SCOTUS ruling against the Obama administration: “A majority of voters report that they will be less likely to re-elect state legislators who implement Obamacare exchanges.”
Most voters believe that, if their state officials respond to a Supreme Court ruling against the Obama administration by attempting to establish PPACA insurance exchanges, it would actually be counterproductive. They believe this would have the effect of “undermining congressional efforts to re-open the law.” And they definitely want Congress to re-open the law—not merely amend it so that the IRS may dole out taxpayer-funded premium assistance through federal exchanges: “[V]oters want more than just minor tweaks that only affect individuals currently receiving subsidies. They want major changes that will improve the law for everyone.”
The voters in the states that refused to create Obamacare exchanges are well aware that the law’s defects go beyond the subsidy issue raised in King v. Burwell. They are also put off by the individual mandate, the employer mandate, and the general inefficiency that has plagued virtually all exchanges regardless of how or by whom they were established. In other words, these voters are in general agreement with their governors and legislators. The conventional Beltway wisdom regarding the political fallout from King v. Burwell is wrong. If there is any backlash from the upcoming SCOTUS ruling, it will be felt in Washington, D.C.
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