King v. Burwell is a lawsuit funded by a conservative group whose former board chair once compared the Affordable Care Act to the Holocaust. The plaintiffs in this case ask the Supreme Court to read a single passage of Obamacare out of context, despite other provisions indicating that their reading of the law is wrong, to cut off tax credits that enable millions of Americans to afford health insurance. If the justices side with the groups backing this suit, even relatively optimistic estimates predict that 8 million people will lose their health insurance and close to 10,000 Americans will die every year who otherwise would have lived.
Yet, despite the deadly consequences of a Supreme Court decision gutting Obamacare, Sen. Chris Murphy (D-CT) took to the Senate floor on Thursday with a surprisingly concise picture laying out Senate Republicans’ proposals to address a decision for the plaintiffs in King: ¯_(ツ)_/¯.
Indeed, if anything, Murphy is being too charitable to his Republican colleagues. Though the Affordable Care Act gives states “flexibility” to decide whether to set up an exchange where their residents can buy health insurance or to have the federal government set up this exchange for them, the King plaintiffs claim that the tax credits that enable these exchanges to function are only available in states that opted to set up their own exchange. As we explained shortly after oral arguments in King, the consequences if tax credits are cut off in the nearly three dozen states that opted for a federally-run exchange would be catastrophic:
If tax credits are cut off in states with federally run exchanges, premiums will spike, and healthy people will likely drop insurance that they can no longer afford. Once that happens, however, the insurance companies will no longer have enough revenue to pay for sick peoples’ costs, so they will have to raise premiums even further. That, in turn, will cause more healthy people to drop care. The result is a “death spiral” where higher premiums beget fewer customers, which beget higher premiums, which beget fewer customers.
Most Senate Republicans, including Majority Leader Mitch McConnell (R-KY), have signed onto a bill offered by Sen. Ron Johnson (R-WI) as their response to a decision against Obamacare in King. This bill, however, would actually make matters even worse than doing nothing. That’s because the bill repeals the law’s individual mandate, an unpopular but necessary provision that also wards off a death spiral.
Before Obamacare became law, several states prohibited insurance companies from denying coverage to people with preexisting conditions without also enacting an individual mandate requiring healthy consumers to carry insurance. The result was a disaster. That’s because, if the law permits patients to wait until they get sick to buy insurance, they will drain all the money out of an insurance plan that they have not previously paid into. That, in turn, will cause premiums to spike, which will cause healthy people to drop out of the market. And so the death spiral begins.
King v. Burwell, in other words, threatens the individual health insurance markets in about three dozen states. The Senate Republican’s proposed response to King, however, is to blow up the individual health insurance market in all 50 states.
That’s why Senator Murphy, if anything, was being too kind.