Top Five Myths about King v. Burwell

Hadley Heath
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Posted: Mar 03, 2015 1:26 PM
Top Five Myths about King v. Burwell

On March 4, the Supreme Court will hear oral arguments in King v. Burwell, a case that could have serious implications for ObamaCare. Current knowledge of the case is extremely low: 61 percent of people have heard little or nothing about it, while only 12 percent said they have heard a lot, and 27 percent have encountered “just some,” according to polling commissioned by Independent Women’s Voice (IWV).

When the public is under-informed, this provides an opening for those with the biggest microphones (like the White House and the mainstream media) to tell only their version of the story. Sadly, the result is often misinformation.

As this discussion heats up, let’s debunk the top five myths about King v. Burwell that you are sure to hear:

Myth #1: This is a lawsuit against ObamaCare.

False: King v. Burwell is a challenge to a rule promulgated by the IRS that allows tax subsidies to flow through federally-facilitated exchanges. The statute clearly says that people are only eligible for subsidies if their state sets up its own exchange. In fact, the challengers in King v. Burwell are simply asking the Supreme Court to enforce the Affordable Care Act itself, which does not authorize health insurance subsidies to flow through federal exchanges. The argument in King v. Burwell is that when the IRS decided to send these subsidies out anyway, it acted illegally.

Myth #2: This lawsuit is purely the result of a “drafting error.”

Liberal health experts and Democratic lawmakers are on record characterizing these subsidies as “conditioned,” saying citizens would only receive subsidies if their state established its own exchange. The original expectation could have been that non-establishing states would not receive the subsidies as a punishment for noncompliance and would therefore have an incentive to create their own exchanges.

And it is hard to believe that this is a typo when the law says at least six times that the subsidies are available through exchanges “Established by the State.”

Myth #3: This lawsuit is a project of Big Pharma.

Actually, almost the opposite is true: Big Business in the health sector is on the side of the government here.

The government has received supporting Amicus Curiae briefs from America’s Health Insurance Plans, the lobbying organization for the insurance industry, Hospital Corporation of America, and many other health industry interests. Meanwhile, petitioners in King v. Burwell have Amicus Curiae briefs from a variety of legal scholars, citizens-rights groups, members of Congress, and states. PhRMA has not filed any briefs in the case.

Myth #4: If challengers win, millions of people will be harmed.

Importantly, the potentially affected subsidized consumers simply do not have to be harmed in the event that SCOTUS sides against the government. Congress can pass contingency legislation that will provide a responsible transition for the affected population. The IWV polling suggests that political pressure to hold harmless current subsidy recipients is strong (75 percent) and nonpartisan (62 percent of Republicans), suggesting that it is basically inevitable that lawmakers act. A targeted, sensible fix could keep this year’s subsidies in place and allow affected states, in the future, to transition to a federalist, block-grant style health system.

Myth #5: Nothing good can result from this case.

Most media reports about King v. Burwell ignore those who would benefit from a ruling against the government.

The subsidies in question trigger some of the law’s most unpopular pieces – the individual mandate and the employer mandate. A ruling against the government would free more than 8 million low- to middle-income Americans from the requirement to buy ObamaCare’s expensive, mandate-laden health insurance. Approximately 57 million workers would be freed from the specter of reduced hours and reduced take-home pay as a consequence of the law’s mandate on employers being voided.

Perhaps most importantly, this case could open the door for serious improvements to our nation’s health policies. ObamaCare has been a political stalemate, with both sides of the political spectrum digging in their heels: Democrats don’t want to make any changes, and Republicans want nothing short of full repeal. But a ruling against the government in King could break the stalemate and force both sides to negotiate and reexamine a law that is approved by only 37 percent of the American people.

Regardless of our political views, we should all be rooting for the Supreme Court to rule against the government in King v. Burwell. It would set a terrible precedent for an administrative agency to go rogue and dole out monies from the Treasury without Congressional authorization. And furthermore, this case need not result in a crisis, but instead creates an opportunity to change our health laws for the better.