July 23 2014
Patrice J. Lee
As we’ve reported, a panel of justices on the D.C. Court of Appeals ruled yesterday that federal subsidies to pay for ObamaCare plans are illegal. In fact, they violate the text of the un-Affordable Care act itself.
Charlotte has blogged on how important this ruling can be to the fate of Obama (and, indeed, to the notion of laws as they are written and limits on presidential power), but I want to talk about something else: the White House’s reaction and how essential the subsidies are to the ObamaCare system.
The judges stayed the ruling so the federal government is for the time being within its rights to continue the subsidies. But the White House’s defiant tone is disturbing. Without the extra help from the subsidies, the average cost of health insurance for the majority of people with ObamaCare plans skyrockets. Is defiance really the right tone, when it is not beyond possibility that the administration will be faced with a Supreme Court’s upholding of this ruling, which would cripple ObamaCare. Is defiance the best stance when the matter could one day before Congress again?
During a press conference White House Press Secretary Josh Earnest was confident that the courts would ultimately uphold the law’s subsidies for customers in federal-run exchanges.
Roll Call reports:
“The legal basis for our case is strong,” Earnest said. “The intent of Congress was to ensure that every eligible American … would have access to tax credits.”
The president “is willing to work with Democrats and Republicans in Congress to make improvements to the law,” Earnest said. But given the efforts made by Republicans to repeal it, “the prospects of the kind of legislative fix that might actually improve the law seem unlikely.”
Earnest said the White House expects the Department of Justice will appeal the case to the full D.C. Circuit Court of Appeals. Last year, Senate Democrats used the “nuclear option” in part to fill vacancies on that court with Obama’s appointees.
These subsidies are critical to the solvency of ObamaCare because without them, Americans could not afford the plans. According to the Department of Health and Human Services, 87% of the 5.4 million people who signed up for ObamaCare through healthcare.gov qualified for subsidies. The Congressional Budget Office projected they would ring up to $12 billion. On average ObamaCare enrollees paid 76% less than the true cost of their plan.
CNN Money reports that the federal government doles out an average of $264 a month on premium subsidies leaving enrollees to only pay an average bill of $82 a month for health insurance.
This is perhaps the worst timing for the Administration. They are gearing up for the next open enrollment period set to kick off in a matter of months.
Last fall brought millions of Americans lost their healthcare coverage because of ObamaCare and at the same time an embarrassing botched rollout of its website caused many to lose faith in the Affordable Care Act. As we’ve held before, the fundamental problems with ObamaCare are not just technical glitches with enrollment websites and ridiculous PR campaigns. ObamaCare distorts the healthcare market, raises costs on producers and consumers, and drives unintended consequences that ripple across our economy.
As this ruling makes clear, ObamaCare is far from a done deal. It’s a bad deal for Americans, and it might have just gotten worse for those who require subsidies to afford it.