If Obamacare Gets Supremely Screwed Over….

We’re all having to come to grips with the Supreme Court’s leap into the Obamacare subsidy litigation–without differing Circuit Court rulings to justify it–and the possibility that the very weak case against the validity of subsidies in states with federally-created exchanges being sustained. Even if it doesn’t mean the worst will happen, it’s prudent to look at what would happen at worst, and WaPo’s Greg Sargent quickly goes there today:

If the Supreme Court sides with the challengers in the latest legal targeting of the Affordable Care Act, which is a very real possibility, the immediate impact would be to invalidate federal subsidies to millions of people in around three dozen states.

This would not bring down the law as a whole, since the states that have agreed to set up exchanges would remain untouched. But this gets at another reason the stakes are so high here. Such a SCOTUS decision could exacerbate a trend we’ve already seen develop as GOP states declined to opt in to the Medicaid expansion: It could further deepen the divide between blue and red states when it comes to access to health insurance.

If SCOTUS does invalidate the subsidies to people in states on the federal exchange, some states impacted by the decision, presumably, would move to set up their own exchanges, to prevent their constituents from having health coverage yanked violently out from underneath them (crazy idea, but it just might happen). However, it seems reasonable to assume more conservative states might be less likely to do this.

Yeah, I’d say so. In the more “reasonable” Republican-governed states, they’ve already accepted the Medicaid expansion, so any further effort to “accomodate” Obamacare is likely to attract intense opposition. And in the less reasonable jurisdictions, here’s the reality:

If subsidies stop flowing to those states that did not opt to create their own exchanges, the disparity between states that are doing all they can to enable their constituents to benefit from the law, and those who are resisting that course of action at all costs, could deepen. Most of the southern states declined to set up exchanges, as did all of the Deep South states.

“Many of the poorest states with the highest uninsured rates would lose an infusion of federal dollars if the Supreme Court disallowed the tax credits and the states decided not to set up exchanges on their own,” Larry Levitt of the Kaiser Family Foundation adds.

The Republican governors of such states, of course, typically have their own ideas for “reform,” including the destruction of the pre-ACA Medicaid program.

Let’s hope SCOTUS is bluffing.

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Ed Kilgore

Ed Kilgore is a political columnist for New York and managing editor at the Democratic Strategist website. He was a contributing writer at the Washington Monthly from January 2012 until November 2015, and was the principal contributor to the Political Animal blog.