Musing About Ezra Klein’s Views of the Political Economy of ObamaCare
Ezra Klein has a very nice explainer on the likely consequences of the possible announcement next week of a 5-4 partisan Supreme Court vote to disrupt ObamaCare via the case King v. Burwell:
: King v. Burwell Won’t Destroy Obamacare: “A ruling for the plaintiffs in King won’t change anything about Obamacare…
…in California, or New York, or Massachusetts, or even Kentucky. And it won’t be a long-term problem for the states using a federal exchange out of convenience rather than ideology; they’ll just set up their own exchanges…. Pennsylvania, Arkansas, Delaware, and Maine are already working on backup plans. So King can’t destroy Obamacare. What it can do is let Republican elected officials destroy Obamacare in states where they have a majority. That’s a very different thing, and it will lead to very different political dynamics…. Resistant red states will be left with a wrecked insurance market — and a hefty tax bill…. The lawsuit shuts off subsidies, but it doesn’t touch the taxes and spending cuts that pay for those subsidies. Republicans in those states will still be paying the taxes and bearing the spending cuts needed to fund Obamacare. They just won’t be getting anything back. Meanwhile, the destruction of subsidies will wreck the individual insurance markets in the recalcitrant states…. Ending the subsidies can badly hurt people who aren’t even using subsidies, because it will send average premiums skyrocketing. It is very odd that Republicans are cheering for this to happen to their states…
I am, however, somewhat annoyed that Ezra’s claim that this is a “very odd” thing that “Republicans are cheering” for. That leaves too much of what ought to bee his argument hanging.
He should unpack and expand this considerably. Subsidy recipients in Red States vote roughly 40% Republican. Those purchasing insurance on exchanges without subsidies but who would be badly hurt by the premium increases in Red States vote roughly 60% Republican. Insurance executives who want a functioning health-insurance markets vote roughly 90% Republican. Doctors in Red States who want a functioning individual and small-group insurance market to diminish their uncompensated-care costs vote roughly 70% Republican. And on the other side? Nobody benefits from a cutoff of Red State exchange subsidies. And there is no even semi-plausible plan for how such a cutoff leads to enactment of a Republican heath-care reform plan, not least because such a plan does not exist. Why doesn’t such a plan exist? Because any plan you propose makes enemies. And, of course, the lead plaintiff, King, does not benefit in any way from the cutoff of Red State exchange subsidies.
So how is it that a legal case that has an extremely difficult intellectual lift–that goes against the grain of administrative law precedent and does not have any countervailing advantage in going with the grain of any ideological conception of justice–got four votes for the Supreme Court to hear it and has at least three votes–Alito, Scalia, and Thomas–on the court? Why was this case funded by the Republican policy infrastructure? Why didn’t the legislators at the state and the federal level who will have to deal with this shut it down by telling CEI and others that there were other places where there money could be much better spent?
It is not enough to say that this is “very odd”. Vox should be doing a deep dive into who thinks a world in which King v. Burwell succeeds is better, in what dimension it is better, and why they think that it is better. And the absence of such a deep dive annoys me: I want Vox.com to be providing me with a higher quality of free ice cream. The only argument I ever hear is: “If we win King v. Burwell, we can take the economic well-being and health care status of the people of the Red States hostage, and then Obama will have to knuckle under to us!” But didn’t we see this tried, and fail, in the many governent-shutdown and government-default fake crises of 2011?
The closest analogy I can think of to the litmus test that is the Republican Party’s embrace of the plaintiffs’ cause in King v. Burwell today is the litmus test that was the Democratic Party’s embrace of Dred Scott in the late 1850s. Democrats like Stephen Douglas who wanted to build a national coalition and do more than please the base sought to maintain a “popular sovereignty” position on slavery–some of us like it, some of us don’t, and the white people of each state or territory should be able to decide whether they want it. Roger B. Taney’s Dred Scott decision eliminated the possibility of the “or territory” part, and the reasoning of Dred Scott suggested that the “state” part was not secure. If slaves-as-property were expressly affirmed in the Constitution, as Taney claimed, why didn’t the property-rights arguments that John Marshall had used to strike down debtor-friendly bankruptcy state laws also apply to laws freeing slaves? But the Democratic base in 1860 thought that “popular sovereignty” dissed them to too great a degree. And so they blocked Douglas’s path to the 1860 presidential nomination. That this hard line shrank the possible Democratic electoral coalition massively simply did not enter into the Democratic base’s thinking then. And a similar dynamic appears to apply to the Republican base today.
In a less-strange world, the Republican Party ought to be enthusiastically implementing ObamaCare, and taking every possible victory lap for it: it is, after all, RomneyCare. The Democratic pieces of the original proposal–the public option, etc.–fell away.
Ezra does have good things to say about the Aesopian language and positions taken by Republicans in Washington:
Senator Susan Collins, a Republican from Maine, told the New York Times she was hoping to see the Supreme Court rule for the plaintiffs because ‘it would provide an opportunity to transition to a new law, or an improved version of the Affordable Care Act.’ Notice the absence of the word repeal. And pay close attention to what she said next: ‘I don’t think it would be fair to cut off people who have been using Obamacare subsidies.’
Her colleague, Sen. John Thune, a member of the Republican leadership, was even pithier: ‘On this issue, we are not playing with the strongest hand,’ he said.
There are already a slew of Republican proposals to continue the subsidies in one way or another. The plans don’t make much sense, many of them create new problems, and I am not confident any of them can pass — but they express how different the politics of Obamacare are in 2015: pure repeal is understood to be a fantasy….
There are basically three possible paths for Obamacare if the Court rules against it. (1) Congress simply fixes Obamacare… the best and least disruptive of the options, but I don’t think it’s very likely…. (2) The next president fixes Obamacare. The prospect of a Republican president might push congressional Republicans to pass a temporary fix for Obamacare–something that stabilizes subsidies for two years but forces a solution in 2017…. (3) America develops a temporary two-tier health-care system. Congress… collapse[s] into total gridlock…. Some red states hold out for years or even decades, paying the tab for Obamacare but receiving none of the benefits. Eventually, the politics calm and all states participate, because the alternative is just too disastrous to sustain for very long. This is, incidentally, what is already happening with Obamacare’s Medicaid expansion…