Today’s Washington Post features a front page story called “Faces of the subsidies case: For families relying on Affordable Care Act, court ruling could be devastating.” Just above the headline, in a picture that runs nearly the full width of the front page, we see a picture of Erin Meredith — the poster woman for the story — with her adorable five-year old daughter.
The picture and the headline will have jumped out at the Supreme Court Justices as they opened their morning paper (assuming the Post’s news delivery vehicles were able to brave the three inches of snow that fell on Washington last night). This, of course, is precisely what the Post intends.
Meredith isn’t a “random” subsidy beneficiary. Rather, as Post writers Lena Sun and Niraj Chokshi inform us in the opening paragraph, she’s a “fifth-generation Republican” who “was no fan” of Obamacare, “which she considered just other wasteful government handout.”
But Meredith now receives an Obamacare subsidy of $132 a month. She would like to keep her $1,600 a year government handout (about half the amount of the average subsidy, according to the Post), and who can blame her?
Like any other federal income redistribution scheme, though, the Obamacare subsidies can only be maintained if Congress provided for them. Whether Congress did so is the question before the Supreme Court in King v. Burwell.
It’s worth noting, however, that a decision by the Court that Congress didn’t authorize subsidies except in state exchanges wouldn’t preclude subsidies for people like Ms. Meredith. States like Texas that decided not to establish exchanges in the belief that, per the Obama administration’s rulings, lower-income residents would get subsidies via the federal exchange, would revisit the matter knowing now that only by establishing exchanges will these subsidies continue.
This is precisely the condition under which Obamacare’s architects intended states to make their decision, as is clear from both the statutory language and the comments of Jonathan Gruber. Subsidies were limited to state exchanges as a means of inducing states to establish them.
Thus, if the Supreme Court rules against the administration, states like Texas still will be able to maintain the subsidies of people like Erin Meredith by establishing exchanges (the effective date of the ruling could be pushed back to allow time for this). Whether the subsidies are maintained will depend on whether the state favors this redistribution of income.
In theory, the federal government could maintain the subsidies by amending Obamacare so that it reads the way the Obama administration has pretended it already does. That’s not going to happen, but only because the move apparently lacks the requisite popular support — support that, from all that appears, it never had.
In any event, a victory for the plaintiffs in King v. Burwell shouldn’t be viewed as the Supreme Court deciding to take away subsidies. It should be viewed as the Supreme Court placing the decision in the hands of the federal and state legislatures, where issues of income redistribution should always be resolved in a democracy.
Unfortunately, liberal organs like the Washington Post are working overtime to persuade the “refs” that a plaintiff’s victory wouldn’t be viewed in these terms.