As soon as Thursday, the Supreme Court is expected to decide King v. Burwell, a case which asks the Supreme Court to cut off tax credits that enable millions of people to afford health insurance in about three dozen states. Should the King plaintiffs prevail, millions of Americans will become uninsured and thousands will die every year who otherwise would have lived. While the nation waits for this decision, conservative legal groups, messaging shops, think tanks and academics are already gearing up to ensure that, should the Supreme Court decide to undercut Obamacare, King v. Burwell will do maximal damage to the nation’s health care system and to the millions of Americans who depend on the Affordable Care Act for medical treatment.
The weapon they plan to wield against attempts to restore what the Supreme Court could take away are so-called “Healthcare Freedom” laws enacted during an earlier phase of the massive resistance to Obamacare. Originally conceived as a kind of barbaric yawp against health reform, these laws declare the state’s opposition to the Affordable Care Act’s individual mandate, a provision imposing a tax penalty on most Americans if they do not carry health insurance. Virginia’s law, for example, provides that “[n]o resident of this Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage.”
To the extent that these laws attempt to nullify a federal legal requirement, they are unconstitutional. Yet an influential group of conservative lawyers now believe that they can be used to ward off attempts to mitigate the carnage that will result from a Supreme Court decision against Obamacare.
King v. Burwell rests on a single sentence of the Affordable Care Act which, if read out of context, seems to suggest that tax credits must be cut off in states that do not operate their own health exchange. Should the Supreme Court take away these tax credits, individual states could restore them within their borders by setting up an exchange — unless another lawsuit forbids these states from doing so. That’s where the “Health Freedom” laws come into play.
As libertarian law professor Josh Blackman writes in a white paper released by the conservative Federalist Society, “[e]ighteen of the thirty-four states” that would be impacted by an adverse decision in King “enacted the ‘Healthcare Freedom Act,’ which would require an act of the legislature, or even a constitutional amendment, in order to allow the creation of an exchange.” In reality, the potential impact of these “Healthcare Freedom” laws on states’ ability to set up their own exchanges is far less certain than Blackman suggests. Nevertheless, his claim will undoubtedly form the basis of post-King litigation if the justices decide to strip many Americans of their health insurance.
In the new conservative narrative surrounding these “Healthcare Freedom” laws, the laws make up an essential cog in a kind of Rube Goldberg device that prevents states from setting up their own exchanges. Essentially, the way that this device works is like this: the law requires most Americans to carry insurance or pay higher income taxes, but it also exempts uninsured Americans who would need to spend more than 8 percent of their income to obtain health insurance from this requirement. If the King plaintiffs prevail, more Americans will fall into this gap where the cost of insurance exceeds 8 percent of their income because they will no longer receive tax credits that enable them to pay for care. Therefore, more Americans will be exempt from the tax penalty for not carrying insurance. But, if a state sets up its own exchange, the tax credits will be restored, and these Americans will once again be subject to potential tax penalties.
As Jonathan Adler, a law professor who is one of the leading public spokespeople for the plaintiffs’ position in King, wrote on Twitter earlier this year, “tax credit eligibility . . . slides more people to individual mandate penalty.” So if states that are subject to a “Healthcare Freedom” law take an action that helps people get tax credits, they also subject some people to the individual mandate. And that, according to conservative legal theorists like Blackman and Adler, is not allowed.
The reality, as mentioned above, is much more complicated than Blackman, Adler and their conservative allies suggest. For starters, the Supreme Court famously held in NFIB v. Sebelius that the Affordable Care Act’s individual mandate “may for constitutional purposes be considered a tax, not a penalty.” Under this theory of the law, the Court explained, “the mandate is not a legal command to buy insurance.” Accordingly, it is doubtful that a law such as the Virginia Health Care Freedom Act (which provides that “[n]o resident of this Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage”) actually has anything to say about the individual mandate.
(Adler, for his part, also argues that “Healthcare Freedom” laws also create problems because of the Affordable Care Act’s employer mandate. But even if the employer mandate should not also be understood as a tax, it’s not clear that these state laws prohibit states from taking an action that leads to the federal government doing something that the state could not do on its own.)
Regardless of how state courts would rule if this matter arises, it is clear that the Affordable Care Act’s opponents are already laying the groundwork for a new round of litigation ensuring that King v. Burwell does as much damage as possible. If they succeed in their efforts to inflict maximal damage to the nation’s health laws, the consequences will be quite dire. A brief filed by public health scholars and the American Public Health Association estimates that “over 9,800 additional Americans” will die every year if the King plaintiffs prevail and nothing is done to mitigate the harm caused by such a decision.