WSJ Just Realized The Anti-ACA Lawsuit It's Been Pushing Could Be Ruinous For Americans -- Including Republican Voters

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.

On November 7, the Supreme Court announced it would hear King v. Burwell, a lawsuit challenging the legality of the tax subsidies that the IRS provides to consumers who purchase health insurance over the federal exchange. The plaintiffs in King argue that, because one section of the ACA states that subsidies are available to consumers who enrolled “through an Exchange established by the State,” the federal government isn't allowed to offer credits to people who live in states that refused to set up their own insurance exchanges.

This extremely literal reading of the ACA ignores other parts of the law that indicate the exact opposite and the overall context of the bill as well as the legislative history of its passage, but conservative media have nevertheless been boosters for the challenge. The Journal has been particularly supportive of King and related cases, suggesting that it “ought to be a straightforward matter of statutory construction” to rule in favor of the challengers. The Journal has rarely, if ever, acknowledged the human cost that would come with a Supreme Court decision striking down the availability of tax subsidies -- but in a recent editorial, the Journal seems to have discovered the devastating cost of its anti-ACA advocacy, at least for Republicans:

The time to define a strategy is soon, as King v. Burwell will be heard in March with a ruling likely in June. As a matter of ordinary statutory construction, the Court should find that when the law limited subsidies to insurance exchanges established by states, that does not include the 36 states where the feds run exchanges.

But in that event one result would be an immediate refugee crisis. Of the 5.4 million consumers on federal exchanges, some 87% drew subsidies in 2014, according to a Rand Corporation analysis.

In the GOP debate about how to respond, one side would prefer to wait for the judicial rapture to arrive. ObamaCare has never been popular, they argue, and if the subsidy foundation of the law is undermined, the rest will collapse of its own weight. And because ObamaCare's mandates and taxes are conditioned on the subsidies, more people will be helped than harmed if they are withdrawn.

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.

The number of people who could lose their insurance subsidies will be far greater than the number cited by the Journal, which only accounts for consumers who bought insurance in 2014. According to a Kaiser Family Foundation (KFF) analysis of Congressional Budget Office enrollment estimates, far more Americans will be eligible for subsidies in 2016 after the ACA is fully implemented -- meaning upwards of 13.5 million people who are otherwise eligible for tax credits could soon lose out depending on the ruling in King. As KFF also pointed out, the Journal's fear about the impact on Republican governors is well-founded, since "[m]ore than half are in a few big anti-ACA states that chose not to run their own exchanges: Florida, Texas, North Carolina, Georgia, and Pennsylvania."

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.

According to The Urban Institute, this ensuing economic loss could be as high as $36.1 billion, “with spillover effects to state economies also expected from the sizable reduction in federal dollars flowing into these states.” And as the Constitutional Accountability Center has explained, beyond these abstract numbers the real human cost is even more stark -- and not limited just to those Americans who rely on the subsidies:

Due to the reduced number, and increased proportion of high-risk, high-cost participants in the program, stripping these benefits will effectively shut down the federal exchanges, cutting off non-subsidized enrollees as well.

Not only will the federal exchanges be rendered dysfunctional; non-exchange markets for individual policies will also become destabilized. Insurance providers, bound by the ACA's guarantee of covering pre-existing conditions and other insurance reforms, are legally required to combine individual and exchange-based policy-holders into a single risk pool. Therefore, insurance premiums will double for everyone purchasing individual (non-group) insurance policies -- insofar as such policies remain available at all.

In sum, due to higher premiums, healthy people will tend to opt out while sick people continue to sign up, driving up premiums even more and “inevitably” initiating what economists have termed the “death spiral,” a cycle wherein an increasingly sick participant pool continues drive up premiums, in turn causing more and more relatively healthy participants to drop out, driving out insurers, eventually causing a drying up of state markets for individual insurance policies. This is not a theory, but a result demonstrated by actual experience in several states before passage of the ACA.

Millions of Americans now protected by the ACA from the consequences of being uninsured will once again face increased risks of bankruptcy, as well as the mental health costs that accompany that stress. In addition, the lack of affordable health insurance for the population at large will lead to delayed and costlier long-term treatment for cancer, diabetes, and heart disease.

Even more unnerving, it's not just right-wing media like the Journal that might gloss over the personal toll the King case could have on newly-insured Americans.

On November 14, the Supreme Court heard oral arguments in a dispute between retirees and a chemical company over the availability of health insurance. The company revoked the retirees' benefits in 2007, despite a clause in their collective bargaining agreement apparently affording them health care coverage for life. According to the Alliance for Justice, Scalia was apparently unmoved by the retirees' position:

During oral argument, Justice Scalia mused:

You know, the nice thing about a contract case of this sort is you can't feel bad about it.  Whoever loses deserves to lose. I mean, this thing [the duration of the health benefits] is obviously an important feature.  Both sides knew it was left unaddressed, so, you know, whoever loses deserves to lose for casting this upon us when it could have been said very clearly in the contract. Such an important feature.  So I hope we'll get it right, but, you know, I can't feel bad about it.

Justice Stephen Breyer was quick to disagree:

Well, you know, the workers who discover they've been retired for five years and don't have any health benefits might feel a little bad about it.

Breyer can now look to the Journal for some support on the true consequences of denying health insurance to Americans. At least, as it applies to Republicans.