Magazine article USA TODAY

Subsidies in the Soup? Once Again It's Batter Up for the Supreme Court on ObamaCare

Magazine article USA TODAY

Subsidies in the Soup? Once Again It's Batter Up for the Supreme Court on ObamaCare

Article excerpt

The Obama Administration apparently was shocked when the Supreme Court agreed to hear the case of King v. Burwell, which challenges insurance subsidies flowing through Federal Exchanges. The Patient Protection and Affordable Care Act clearly states that subsidies flow only through Exchanges established by states.

This, according to MIT economist Jonathan Gruber, was meant to be a deal the states could not refuse, to "encourage" them to create an Exchange, but more than 30 of them did refuse. The Administration, however, had a ready fix: the IRS simply wrote a rule that allows the subsidies to flow anyway, arguing that that must be what the law really meant.

It reminds me of Gilbert and Sullivan's operetta "lolanthe." There was a most inconvenient law on the books: 'The fairy that marries a mortal dies!" It was terrible enough that the beloved lolanthe had broken the law but, ultimately, when all the fairies marry members of the House of Peers, what is the Fairy Queen to do? "I can't slaughter the whole company!" The Lord Chancellor comes to the rescue. 'The subtleties of the legal mind are equal to the emergency. The thing is really quite simple-- the insertion of a single word will do it. Let it stand that every fairy shall die who does not marry a mortal."

The Obama Administration is assuming that the Court will act as Lord Chancellor, or else the Republican Congress will do so, and therefore has not bothered to warn anyone of the possible loss of subsidy. Sen. Ben Sasse (R.-Neb.) is concerned that patients suddenly will lose their hemodialysis or chemotherapy, and has suggested a COBRA-like patch.

In fact, almost all patients with end-stage renal disease are on Medicare and, while PPACA caused millions to lose a plan they liked, some while on chemotherapy, PPACA plans cannot be cancelled when you get sick. Subscribers will, however, have to start paying the entire premium--which is far less expensive than chemotherapy.

The losers will be insurance companies. Remember, subsidies do not go to sick people. They all go to the insurer. Some insurers will be stuck paying for 30 days of treatment if the subscriber defaults on premiums, and providers will be forced to give treatment without pay for the remaining 60 days of the grace period. …

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