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"There’s Going To Be Chaos" - What Is The Worst-Case Outcome Of Today's Supreme Court Obamacare Hearing
Today, for the second time since 2012, the fate of Obamacare lies in the hands of the Supreme Court, and like last time, it will likely be all about Justice John Roberts ' decision. Later today, the US Supreme Court will hear oral arguments in the case of King v. Burwell, the latest challenge to Obamacare, and one that could potentially leave it gutted from an unexpected direction. As a result, nearly eight million Americans could lose their health insurance depending on how the Supreme Court interprets four words in the "Affordable" Care Act.
But while the law, or rather "tax", was already found to be constitutional in the Scotus 2012 ruling, the current case centers on whether, as many Republicans argue, one line in the law was intended to restrict subsidies to people who bought insurance through a state exchange or whether, as Democrats contend, that line was a simple oversight in the law’s drafting.
As Bloomberg adds, the new case is narrower, centering on the statute’s language: At issue is whether Obamacare can provide subsidies nationwide to people who buy insurance, or only to those in the states that have set up their own online marketplaces, known as exchanges.
Here are the four words that could make or break Obamacare:
The statute says people qualify for credits when they buy insurance on an exchange “established by the state.” Those four words matter because only about one-third of the states have set up exchanges, with the rest relying on the federal healthcare.gov system. The challengers contend that the people who buy on the federal exchange can’t claim the subsidies.
The group behind the suit, the Competitive Enterprise Institute, describes itself as an advocate for limited government and individual liberty. According to the Washington Post, the group’s financial supporters include companies tied to Charles and David Koch, the billionaire brothers who fund conservative causes.
The institute represents four Virginia residents who say they don’t want to buy the insurance required under Obamacare. Should the court block the subsidies, the four say they would fall within an exception to the insurance mandate for people who can’t afford coverage. One lurking issue that may arise during argument is whether any of the four has suffered the type of legal injury that entitles them to sue.
As Bloomberg also notes, a decision against the Obama administration would wipe out the tax credits that make insurance affordable for millions of people under the law. It would also leave hospitals with billions of dollars in unpaid bills and potentially cause insurance markets to collapse.
“If the court rules for the challengers, there’s going to be chaos,” said Abbe Gluck, who teaches at Yale Law School and backs the administration in the case.
That may be a tad dramatic, but as the NYT breaks down, roughly 7.5 million people could lose their subsidies in 34 states (shown on the map below). . The status of people in three other states — Oregon, Nevada and New Mexico — is unclear because those states at one time intended to run their own marketplaces, but now rely on the federal government to manage them.
While it is difficult to handicap what the odds are of an adverse, if mostly for Obama's legacy, ruling, Reuters reports that "a growing number of U.S. patients and their doctors are already devising a Plan B in case they lose medical coverage, as even physicians who think the court will uphold the subsidies are gearing up for the worst. As a result, doctors are "dusting off playbooks they retired when Obamacare slashed the number of uninsured people."
From Reuters:
Interviews with doctors reached through professional groups show that they are lining up free clinics to care for patients with chronic illnesses, asking pharmaceutical companies to provide discounted drugs, and moving up preventive-care appointments and complicated procedures.
"We have to be able to navigate this on behalf of our patients if it comes about," said Dr. Jeff Huebner, a family physician in Madison, Wisconsin, one of the affected states.
Many providers as well as patients are unaware of the looming threat, but some physicians are already preparing for it.
Huebner adds that he "would advise patients in this boat to schedule a visit with their primary care provider as soon as they can" to set up "transition plans." Other doctors, such as pediatrician Marsha Raulerson in Brewton, Alabama has persuaded one drug company to provide an expensive asthma medication to one of her patients if she loses her insurance. "But after a few months you have to re-apply" and show that the patient is still unable to afford medication, Raulerson said. "It's not an easy process, especially if you have to do it for a lot of patients." She is also stockpiling as many free samples as she can.
Dr. Robert Wergin, a primary care physician in Milford, Nebraska, is scrambling to locate labs and imaging centers that offer the lowest prices for blood tests, X-rays and MRIs.
"Around here, people feel responsible for their bills and I'm not sure they would come in if they lost insurance and couldn't pay," Wergin said.
In retrospect, perhaps chaos is not all that dramatic:
Yolanda Diaz, 27, is one of them. A single mother of two, she suffers from occasional blackouts that last several minutes. She cannot afford the full premium on her wages as a pantry manager at Brevard County, Florida, community center so she pays $74.95 a month and the rest is covered by a $205 Obamacare subsidy.
Her coverage began this month, Diaz said, and the first thing she did was make appointments for an MRI and CT scans in hopes of identifying the cause of the blackouts.
"I would hate to have to go to the ER, but if the subsidies get taken away I don't know what I'll do," she said. U.S. law requires hospitals to treat all emergency cases regardless of ability to pay, so many uninsured patients seek care there.
Of those expected to be priced out of insurance in case of unfavorable ruling, the Urban Institute estimated 81 percent are, like Diaz, employed full- or part-time.
To be sure, the Obama administration is confident the worst will not come to pass: it contends that the phrase is a “term of art,” and says that other parts of the law show that there is no distinction between federal and state run exchanges.
“If you look at the law, if you look at the testimony of those who were involved in the law, including some of the opponents of the law, the understanding was that people who joined the federal exchange were going to be able to access tax credits,” President Obama said in an interview with Reuters. “And there’s in our view not a plausible legal basis for striking it down.”
Enter Plan B, or lack thereof (just like the ECB, which as we all know lied to Zero Hedge that it didn't have a Plan B on Greece, when it in fact, only it called it a Plan Z):
The Obama Administration has stated it has no backup plan ready if the Supreme Court rules against it. “If they rule against us, we’ll have to take a look at what our options are,” Obama said recently. “But I’m not going to anticipate that. I’m not going to anticipate bad law.”
Republicans on the other hand, are eager to show they have a Plan B. In the past two days, lawmakers from the House and the Senate have said they’re in the process of working on alternatives to the law, should the Supreme Court rule in favor of the plaintiffs. Reps. Paul Ryan, John Kline and Fred Upton wrote in the Wall Street Journal, they’re proposing an “off-ramp out of Obamacare,” that would allow states to opt-out of insurance mandates and offer options for those who can’t otherwise insurance. Sens. Orrin Hatch, Lamar Alexander and John Barrasso wrote in the Washington Post, they too would help those who can’t afford coverage during a “transitional period” and let states create alternative marketplaces.
So as we head into today's oral argument, much is once again at stake. For those seeking further detail, here is some additional Q&A on the outcome courtesy of Bloomberg:
1. What is the administration’s argument?
The administration says the disputed phrase is a term of art that includes a federally facilitated exchange. U.S. Solicitor General Donald Verrilli urges the court to look beyond the “established by the state” wording to the rest of the act and its broad purpose of providing coverage to tens of millions of uninsured Americans.
Verrilli says Congress designed the law with the goal of offering tax credits nationwide and argues that no member of Congress suggested otherwise during the debate over the measure, which is President Barack Obama’s biggest legislative initiative.
2. What will happen if the court rules for the plaintiffs?
Prepare for falling dominoes. Within a matter of weeks, the healthcare.gov system would have to stop providing tax credits for an estimated 7.5 million Americans in the 34 states that never authorized their own exchanges. Many of those people would probably find premiums unaffordable without the subsidies and would drop their coverage, boosting the ranks of the uninsured.
Yet those who are sick and need insurance would probably try to hang onto their coverage, as healthy people dropped out. Insurers call this phenomenon “adverse selection,” and say it inevitably results in premiums spiraling upward. The Urban Institute estimates that premiums would increase by 35 percent, on average.
Doctors and hospitals, faced with more uninsured patients, would be forced to provide more uncompensated care. If they try to make up for the losses by charging commercial insurers higher prices, that would raise health-care costs for everyone.
Finally, the law’s requirement that employers provide insurance to their workers would be gutted in states where subsidies aren’t legal. Penalties on employers for not providing coverage are triggered when their workers receive a subsidy for an Obamacare plan; without subsidies, there’s no penalty.
3. How would the federal government and states respond?
It’s unclear. Representative Paul Ryan of Wisconsin, the Republican chairman of the powerful House Ways and Means Committee, has said his party will design a “bridge out of Obamacare” for people in states affected by the ruling. There’s no agreement among Republicans on how such a policy would work.
States could respond by simply setting up their own exchanges. The Obama administration could make that easier, for example by letting them use healthcare.gov to sell insurance online.
However, the U.S. health secretary, Sylvia Mathews Burwell, said in a Feb. 24 letter to Congress that the administration couldn’t do much on its own.
“We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision,” she wrote.
4. What is corporate America’s take on the case?
The hospital and health-insurance industries are backing the administration. That includes HCA Holdings Inc., the hospital chain that is the nation’s largest private health-care provider. Trade groups for the hospital and health-insurance industries are also urging the court to back nationwide subsidies.
5. Who holds the pivotal vote?
The most likely candidate is Chief Justice John Roberts. He cast the decisive vote in 2012, joining the court’s four Democratic-appointed justices to uphold the core of the law. The other four Republican appointees voted to invalidate the entire measure, saying Congress exceeded its authority.
Opponents of Obamacare accused Roberts, normally the leader of the court’s conservative wing, of betrayal. Those criticisms escalated after CBS News reported that the chief justice first voted against the administration and then switched sides.
6. Which way is Roberts likely to go?
Both sides can find reasons for hope. Roberts is no stickler for statutory wording. He reads laws against the backdrop of institutional principles that Gluck says might cut in the administration’s favor, including deference to the views of administrative agencies.
In a 2009 case involving the Voting Rights Act, as well as the 2012 health-care decision, Roberts deviated from what he said was the most natural reading of a law to avoid declaring it unconstitutional.
“The chief is an institutionalist,” Gluck said. “He’s not a hyper-literalist.”
Jonathan Adler, a law professor who was one of the first to make the case against nationwide subsidies, says Roberts is more inclined to adhere to a statute’s wording in non-constitutional cases.
“The chief certainly is willing to bend a statute in order to avoid declaring a statute unconstitutional, but that’s not at issue here,” said Adler, who teaches at Case Western Reserve University in Cleveland.
One other factor: As chief justice, Roberts has always kept one eye on the court’s institutional integrity. One theory is that he was driven in 2012 by concern that a ruling striking down the law would be seen as a political decision.
If true, that thinking might suggest another Roberts vote in favor of the administration and another close call for Obamacare.
* * *
Finally, here is some visual detail courtesy of the NYT:
How would insurance coverage change?
The effect of a court decision would not be limited to the people currently receiving subsidies in the federal marketplaces. People who buy their own health insurance in those states, even without subsidies, could be affected, because rates would increase if insurance pools become older and less healthy. Estimates from the Urban Institute prepared for The New York Times show how a post-King world would look compared with the current trajectory for the Affordable Care Act — or if the health law had never passed.

Which groups would be most affected?
The people who would lose their insurance are more likely to be white, high-school graduates, employed and from the South.
What about the rest of the states?
States that run their own insurance marketplaces would be unaffected by a court ruling, meaning a widening gap between insurance coverage in the two groups of states. The Urban Institute estimated the outcome for federal and state-run marketplaces by 2016.
How will the states react?
Under any court ruling, states will have the power to restore their residents’ subsidies if they establish their own exchanges. It would not be easy, but some states face more hurdles than others. Here is a look at the status of the states that could be affected. Some have already begun doing the work of building exchanges. Some have signaled weak interest and taken little action. Others have already set up legal impediments.
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Within 30 minutes of the second "swearing in", I was struck by a revelation which I maintain to this day. The second swearing in was done privately. The second swearing in used Obama's holy koran in place of the Bible. The Chief Justice now was part and parcel to a usurping of sorts which is why he was owned in the original 2012 ruling on Obamacare.
Captain the warp drives can't take any more they are going to blow!
I will be shocked if SCOTUS wrecks obamacare. Last time Roberts was quoted as saying it's "not our job to save the people from the consequences of their political choices". Really Roberts, then WTF is your' job? Isn't your' job to protect the minority from the tyranny of the majority? Isn't your' job to protect the people who didn't make those political choices, but now have to endure the hardships they bring? Isn't it your' job to be outside of politics, and be a strong check on the power of the executive and legislative branches? Wake up Roberts and do your' job.
One could argue that in an Orwellian way "the state" could refer to a central power vs the words "a state" which might imply a specific indvidual state in a collective of states? If the court rules against Obamacare and the words of Abbe Gluck were to be fulfilled "there's going to be chaos" then its still a win win for Obama. His intention is to create chaos at every turn. Obamacare has created "chaos" and the repeal of Obamacare would create "chaos". Every aspect of this admisistration has been designed to create "chaos" wether it has to do with immigration, domestic or foreign policy, welfare, military, gay rights, 2nd amendment...every single aspect of central government and government power has been, is and will be focused on the absolute disruption of the orderly process. Instead of bumbling Maxwell Smart fighting the forces of KAOS we are faced with a Manchurian Marxist fighting for KAOS.
It was all summed up quite neatly pre-2008 for anyone willing to pay attention
"never let a crisis go to waste"
this Administration created them to move their Statist agenda forward
The sinking ship The Titanic should represent Obama's failed foreign policy with Victoria (PMS'd) Nuland at the helm as a drunken,dried out old bitch;
https://www.google.ca/search?q=titanic+hitting+an+iceberg&espv=2&biw=122...
The comment below was intended but I wound up posting the same thing twice. Edit does not allow delete so I'm stuck looking foolish. Fools names and faces.....
Or...HMS The United States.
It's like a bunch of morons here as the Supreme Court decides if they are going to throw consumers, insurers, and gov into Algorithm Hell. If they want to let their legal verbiage rip through and destroy code written that runs the ACA, we'll find out.
http://ducknetweb.blogspot.com/2015/02/why-do-we-discuss-supreme-court-ruling.html
I guess everyone thought Healthcare.Gov was just a one time code issue? Not hardly..dummies the machines run the greater part of the Affordable Care Act:) So what are they going to do here?
http://ducknetweb.blogspot.com/2014/11/the-affordable-care-act-is-run-by.html
We have to stop ripping the code out from under consumers at some point, you think?
I bet Robert's new yacht is a beauty!!
Very good possibility this case gets thrown out on procedural grounds because none of the four plaintiffs have standing to sue. Hard to believe the people who funded this couldn't find some plaintiffs with legal standing.
http://www.thedailybeast.com/articles/2015/03/04/the-technicality-that-c...
Obamacare, another layer of crony capitalism on top of the anti-trust exempted price fixing cabal of the federal gov, insurance companies, and healthcare providers, all designed to scr*w us even more than ever.
first of all. Superbly written article. The Dem's bullshit logic aside about "oops no harm no foul in the wording", I predict Roberts keeps Obamacare on behalf of what is best for the Oligarchs. Obama represents the Oligarchs so despite all the folderol about Dem appointees vs Republican appointees, money talks and bullshit walks
Term of art? That alone qualifies Obamacare to be thrown out. It is a trash law that does nothing to protect insurance consumers. It is all about protecting the insurance monopolies in each and every state.
Do you realize what this means to the Dems - as if healthy people being taxed for non compliance to subsiidize unhealthy people isn't fascist enough - cost the Dems big time in 2010 and 2014 very little traction even on Obunghole's coat tails in 2012. Imagine the tar and feather scenario going into 2016
Doomsday. For self preservation Dems would be better off voting to overturn it entirely. And vote to override Obunghole's expected veto
All this horseshit in this law and it still left 35+ million uninsured.
"Affordable" Health INsurance does NOT mean Affordable Health CARE
It won't matter at the polls in 2016. "Democrats" just created 4 million+ new voters that just walked across the border
They will vote in 2016. And they will vote almost exclusively for letter - D
You do realize that the healthy people will eventually become unhealthy with time right? So, when you are sick and old, we should just throw you in the ditch or force you into bankruptcy because some young kid doesn't want to pay into the system... now, THAT'S fascist.
Of course I don't believe that. When you are old there is Medicare. If you are poor there is Medicaid.
If it is about individual choice. Why should a young person, in good health, be forced to buy an insurance plan just to share the costs of coverage for people who are sick or in poor health? I'm not expected to mow my neighbors lawn. If he wants to eat cheetos, wash it down with high fructose corn poison and polish it off with a donut. Why should a health 25 year old who doesn't make shit for salary b/c under Obamanation there aren't any good jobs, this theortetical person makes a choice to not by insurance. Now he is told to.
Call me a Socialist but that is why I am for single payer. They only way to keep costs inflation in check. Coverage is portable from job to job or if you are unemployed. Non productive paper pushing costs are eliminated for businesses. So they can hire more people. People don't jam the Emergency room when their gall bladder explodes b/c they couldn't afford to see a doctor. So they wait til it is acute.
When my brother in law, who had 12 employees, wanted to offer health care, the amount of paper work involved necessitated him to hire a person just to handle that. For 12 people. So he didn't offer it.
The reason why a Ford built in Detroit costs $1200 more than one across the water in Windsor Ontario is because of employeed paid health insurance costs. It's fucking insane.
Perhaps you should review the definition of the word Fascist. It's not an all encompassing word that describes a person who you disagree with.
That's when some crazy mofo goes into a hospital and starts shooting all the doctors and nurses.
If I can't have health care then nobody will have health care will be the cry of the whining fucking maggots the govt has created.
No way Roberts strikes this down. They have too much dirt on him, especially his adoption process which was likely illegal.
thats how they got to him the first time
He should strike it down. But my guess is he will find a procedural way out, like he did in 2012
Let the citizens decide instead of corporations and governments deciding FOR us all the time. Bustards.
So, these sheisters want to keep the requirement for lower income people to buy insurance but remove the subsidies to help them do it. So, they have to pay the full costs because Republican obstructionists don't want to accept Federal subsidies that costs the state nothing? A lot of lower income people in these states are going to grab pitchforks.
Are the states who didn't set up exchanges going to return the $1 billion each in grants given to them by the Federal government? Time for the red states to write some big checks.
Anyway, the subsidies are Federal subsidies so the states can't stop the Federal government from disbursing them. This will be the ruling.
They can bloody well bill us!!!
The South was right!
Again.
So, what I am getting is that Obama has us by the balls and without the ACA the medical industry will collapse. Somehow or another I do not feel fully informed by this piece and I question its veracity.
Obamacare - caring for the health of the corporations
Let's keep in mind that health insurance and accces to care are not the same thing. Evidence is growing that Obamacare is making it harder to see a doctor or obtain other care. First, Obamacare is available through a very limited network of physicians. To make matters worse, the Assoc. of American Medical Colleges estimates that there will be a shortage of 130K doctors by 2025. 40% of current doctors are 55 or older. In 1970 the ave. income of a general practitioner was $185K (in today's dollars). Now the average has fallen to $161K. Obamacare will continue to squeeze physicians by lowering their Medicare and Medicaid reimbursements. Medicare currently reimburses at 78% of costs, and Medicaid at 70%. In the next 20-30 years these reimbursements will be squeezed down near 50%, as that is the only way the programs can stay solvent as the demand increases. Many of the brightest young people will be turned away from medicine, which will exacerbate the doctor shortage. Surveys indicate that many doctors are considering moving into consierge service, in which they do not accept insurance. One doesn't have to be an economic genius to realize that increasing demand while decreasing supply is likely to cause a problem. Obamacare is premised on the idea that the basic laws of economics do not exist.
Roberts has a boyfriend [4 words]
There's a good reason Obama goes golfing and doesn't seem to have a care in the world whenver a key ruling comes up on one of his bad ideas............He has dirt on every judge on the planet and they know he'll use it. He's got nothing to worry about.
yup yup. I'm positive thats how they got to Roberts last time
Sort of strange he sat mostly silent today, isnt it?
aca is insurance co care..,with a cherry of moar .gov control..pols love it, (although they are exempt from the plan in fact)..anyone who is for this monster is either benefiting by being in insurance or beaurocrats running it..this plan does not improve healthcare, it will only make it less available as we line up to get services and wait. the rich will pay out of pocket and move to the head of the line, ave people will get very poor service.
Nobody seemed to care when my insurance was cancelled last year. I "opted out" and joined a sharing ministry, so now I don't care.
What happened to Obama's promise "If you like your insurance, you can keep it."
Republican's will fix it.....will fix it....will fix it
Health care
immigration
balenced budget..
lol....no
In the republicans defense, they (more or less) still believe in following the constitution, which limits their ability to do anything given the presidential veto. The democrats have the advantage that their belief in socialism (yes, if you vote democrat - you're a socialist) requires the ends justify the means and socialism superceeds the constitution.
Jesus fucking christ - none of this is socialism! It is state control overseen by corporations. When Obamacare was led by the big healthcare corps, it's not even in the same solar system as socialism. Who taught you guys what socialism and communism is - Joe McCarthy?
All the propping up of this horseshit system and then expecting some bought off sack of "concerned" dog shit to throw it all under the bus? Possibly but unlikely. I'd be shocked if that's what happens as it is so out of step with everything else going on.
We'll see. Almost as bad as waiting on greek default that goes on and on and on and on and on......
If the court has any integrity left-haha
2+2should still equal four.
Think of Obamacare as a Forced car payment that you can never payoff or a Forced student loan you can never payoff....A Forced lifetime bill/obligation that never gets paid off.....Stop and think about it....Nobody should put up with this nonsense...regadless of what party you believe in....
Think of owning a home as a Forced property tax payment that you can never pay off, or a renter that pays the Forced property tax payments of the landlord as substantial part of the cost of his rent...
A Forced lifetime bill/obligation that NEVER gets paid off.
Did you ever stop and think of that?
The difference is that everyone who chooses to own or rent property pays their own property tax, but with Obamacare, 50% of the population pays for their own AND for one other person's. There may be some minor property tax rebates for indigent old folks, but it's nowhere near 50%.
Much ado about nothing.
One out is that it doesn't say "only".
We can do this if they rule against subsidies, just every state needs to create a website for their exchange and re-direct all consumers to Healthcare.Gov:)
In or out you know this leads to taxing employer paid plans next
Also, isn't it illegal for congress to exempt itself from paying taxes it imposes on the populace? If Obamacare is a tax, they shouldn't be exempt.\???
Nearly 8 million loafers, leeches and parasites will lose their health care .
Their fixed it for you government ass wipes
I think it will be upheld. They've come too far now to throw it out on a technicality - even a significant one. There is a broad principle that the court has used numerous times to uphold poorly worded and poorly designed legislation. It is the presumption that acts of Congress are valid and constitutional if there is any reasonable interpretation that resolves conflicts.
There's that and the blackmail material they have on Roberts...
If Obamacare is so great our beloved politicians can just change those few words and vote on it again in the house and senate! should be easy to do since it is sooooo good......
Not chaos...but definitely a major conundrum for the GOP. They'd be going into a major election, with a weak economy about to be hit with many hundreds of thousands losing their health care coverage. And they are in all the states, so all the elected officials have to worry about them during an election season. Everyone will think, well now that they've gotten what they wanted, what now?
This is the weak link...they have NOTHING. And yet once again, they paint themselves into a corner, with no escape-plan. I'm an equal opportunity political party hater, but these folks are just plain stupid. Whatever you think of Obamacare, it bought some time. The GOP could have used that time to take care of other things, address other issues they've been having with voters, and put their energy into a candidate who says more than "I'll repeal every word of Obamacare on day one!"...These guys didn't even TRY to calm their extreme elements down...they encouraged them. Now they are forced to nominate candidates they approve, even though that loses them in national elections.
Unless they have a workable plan that takes care of those people, and reduces premiums, the GOP is toast. They have forced an issue they aren't ready to deal with right into an important national election.
Numerically, as far as registered voters, the GOP does NOT have the advantage. Usually, most Democrats don't vote though, so there's a natural 'handicap'...
However, I can promise you, if we have major issues going into this election, or the GOP nominates an extremist, you will have record voter turnout among Democrats. And many moderate Republicans may sit it out if they can't get behind their candidate. Which means the GOP will lose decisively.
Weasle it in any way you can, make it too painful to pull out and WHAM!, you have a new social program dependency. Typical democrat led effort. Never a face-to-face sell. Always a slimy endeavor.
This I would say is "A Nasty Attack On Well Meaning Policy": http://prestonclive.whotrades.com/blog/43747471276