What If Obamacare Subsidies Disappear?

Article posted on May 22nd, 2015 by WhatAmIMissingHere

Obamacare swamp by Eric Allie, Caglecartoons.com

By Mark Meckler

It won’t be the end of the world.

Does the Affordable Care Act really mean what it says?

The Supreme Court will be answering that question in King v. Burwell in the coming months. The question, which surfaced in the public awareness with the Gruber videos, emanates from one line in the Affordable Care Act which says that premium tax credits will be paid only to individuals who obtain medical coverage “through an Exchange established by [a] State.”

Turns out, thirty-six states didn’t create their own exchanges. Instead, they used the Federally Facilitated Marketplace, and the federal government made the executive decision to allow them to receive tax credits anyway. However, the language of the law says their residents are ineligible for subsidies, and the ones currently being paid are illegal.

If the Supreme Court sides with King, how would it affect American citizens?

A great deal.

Let’s review just what’s at stake.

More than just subsidies are being challenged; the integrity of the law itself is at stake. Michael Cannon explains how the intentional deception of the Affordable Care Act goes hand-in-hand with the subsidy problem:

[Jonathan Gruber] and other architects of the law constructed a network of regulations designed to obscure who was being taxed and how much. Those regulations push most of the law’s taxing and spending off-budget by mandating that individuals and business spend their money on the government’s priorities themselves, rather than hand the money over to the IRS for the government to spend.

The federal subsidies are like a temporary roof shielding people who enroll through the federal exchange from the full cost of Obamacare. They defer the cost to other taxpayers.

Take them away, and the sun shines in.

In Cannon’s words:

A victory for the King plaintiffs would cause Exchange subsidies to disappear in two thirds of the country and free more than 57 million Americans from illegal taxation. In other words, it would lend transparency to the PPACA by revealing to millions of Exchange enrollees the full cost of the law’s mandates and regulations. The very idea terrifies advocates of universal coverage.

Those who have adamantly supported the law can’t bear for its flaws to be exposed, because their dream of government-run healthcare will be shown to be less affordable than they’ve led us to believe. So, they try to pass their fear on to the American public with yet more deception.

The Heritage Foundation looked closer at the “parade of horribles” threatened by cheerleaders for each side of the case. Some say these consequences alone are reason enough to leave Obamacare intact as interpreted. Others say the law must be implemented as written, but with such negative effects to so many Americans, the real solution is to repeal it and start over.

Those who side with Burwell threaten that nearly 10 million would lose their tax credits, but more realistic estimations say it would be only 5.5 million (less than two percent of all Americans). The Burwell defense case says disallowing credits for individuals enrolled through the federal exchange would significantly hamper the point of the Act – that is, getting more people insured. The Heritage Foundation counters, “This claim is based on the assumption that the vast majority of exchange enrollees would be previously uninsured individuals. Yet, insurance-market data indicates that the actual result has, in fact, been the opposite.”

Relatedly, Burwell claims that those who lose subsidies would then go uninsured. But again, most would find replacement coverage elsewhere.

Getting the idea?

This is a complete mess.

To that end, one Congressman is preparing to help people with the aftermath. Sen. Orrin Hatch of Utah is writing legislation to help people “transition out of Obamacare.”

I don’t think we can stand by and simply let the shortcomings of the law harm millions more. We need to help the people who will be hurt by losing their subsidies because of Obamacare’s broken promises. 

Unfortunately, his solution is offering alternate subsidies to those who lose the original ones. Replacing one government subsidy with another is hardly moving forward, when the very problem in the first place is the government’s interference in healthcare. However, Hatch was careful to specify they would be only temporary and “should be wrapped up in an effort to eliminate Obamacare entirely.”

Here’s one big-picture lesson from the ongoing Obamacare fiasco: the less government involvement in our daily lives, the better.    (my emphasis)

By Mark Meckler for The American Spectator

By permission The American Spectator

http://spectator.org

http://spectator.org/articles/61899/what-if-obamacare-subsidies-disappear

Mark Meckler is the president of Citizens for Self Governance, which created the Convention of States Project.

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