How would states respond to unsubsidized Obamacare?

This article originally appeared on

With the King v. Burwell case approaching at the Supreme Court, the question on the minds of Washington, DC observers is this: Which justice will save Obamacare this time, John Roberts or Anthony Kennedy?

Most important, it???s not a constitutional question. It???s about interpreting the text of the statute ??? an area of law that increasingly belongs to conservatives, including Roberts.

???Where Roberts tends to trim his sails is where a ruling would really tie Congress???s hands,??? said Jonathan Adler, a law professor at Case Western Reserve University who has been instrumental in the case against the subsidies. ???Roberts shies away from broad constitutional questions because he doesn???t want to take power away from Congress. He would much rather say, ???Congress, you screwed up; try again,??? than, ???Congress, you can???t do that at all.??????

That???s precisely the dynamic that has many liberals worried about King. They???re afraid the justices will rule, essentially, that there???s a glitch in the Affordable Care Act, but that it???s not their job to fix it. Such a ruling would be extremely damaging to Obamacare, but might seem entirely consistent with Roberts???s version of judicial minimalism ???

Statutory interpretation and textualism are important to conservatives like Roberts and Scalia, but that???s never been Kennedy???s wheelhouse. He???s much more likely to make his mark on constitutional questions ??? and to consider broader issues, like the overarching purpose of a law, in statutory interpretation cases. He might be open to the Justice Department???s argument that Congress intended for subsidies to be available in both state-run and federally run exchanges, irrespective of that ???established by the State??? language.

But suppose neither Kennedy nor Roberts sides in favor of the government ??? what then? Paul Ryan says Republicans must have a contingency plan if such a decision does come down. Where Congress may offer varying plans ??? a short term can kick, an opt-out provision, or nothing at all ??? the states will have to make a decision very quickly about whether the short-term pain of unsubsidized insurance could be mitigated by other factors.

In the absence of Obamacare???s subsidies, the penalty for not purchasing insurance or offering it as an employer goes away as well ??? so too could requirements for offering insurance that fails to meet Obamacare???s regulatory demands. These reasons could all prove to be enough of a basis for states to do nothing. And that???s just what some states have announced already.

In response to Reuters??? queries, spokespeople for the Republican governors of Louisiana, Mississippi, Nebraska, South Carolina and Wisconsin said the states were not willing to create a local exchange to keep subsidies flowing. Republicans argue that Obamacare is unacceptable government intervention that raises costs for consumers and businesses.

???State exchanges are the federal government???s way of sticking states with the cost and responsibility of a massive new bureaucratic program,??? said Chaney Adams, a spokeswoman for South Carolina Governor Nikki Haley.

???The right decision was made for South Carolina, and Governor Haley would make it again today.???

State government officials in Georgia, Missouri, Montana and Tennessee ??? a mix of Republicans and Democrats ??? said that opposition by majority Republican state legislators could make it all but impossible to set up a new exchange.

If the Supreme Court does decide to once again save Obamacare from its own legal failings, it could be a dangerous precedent to set regarding the ability of administrators to effectively rewrite statutes at will. But if it rules in the other direction, it could create a domino effect of states discovering that life without Obamacare is actually more appealing than one might think.