More evidence that the King plaintiffs are wrong

Jonathan Cohn, now writing for the Huffington Post, has unearthed additional evidence that Congress never meant to threaten states with the withdrawal of tax credits if they didn’t establish exchanges.

In January 2010—after the Senate passed the ACA but before it was signed into law—Cohn had an exchange with John McDonough, who worked for the Senate’s Health, Education, Labor & Pensions (HELP) Committee and was intimately involved in the drafting of the ACA. Cohn asked McDonough whether the states could opt out of (1) the Medicaid expansion or (2) the exchanges. McDonough replied, “No on Medicaid. Yes on Exchange—but then the feds come in and do it instead.”

McDonough’s response is revealing, as I explained to Cohn. Let me quote from the article:

[As] Cannon and Adler [argued] in a 2013 paper they wrote for the journal Health Matrix: “Having created an enormous incentive for states to establish Exchanges, it likely never occurred to some of the Act’s authors that states would refuse.”

But it did occur to McDonough, from the look of things. In the email copied above, he draws an explicit contrast between Medicaid (which, he thinks, states would never realistically turn down) and the exchanges (which, he concedes, they might).

To Nicholas Bagley, a University of Michigan law professor who worked on two amicus briefs opposing the lawsuit, that contrast is telling. “[McDonough] knew full well Congress couldn’t force the states to participate in Medicaid,” Bagley told me. “What he meant was that the stakes were too high for that to be a realistic option. But the very next thing he says is that opting out of the exchanges was a realistic option. On the plaintiffs’ theory, how could that possibly be? Just as no state could have been expected to opt out of Medicaid, so too no state could have been expected to opt out of the exchanges if billions of dollars were on the line.”

“If the plaintiffs were right,” Bagley went on, “McDonough would’ve said ‘no’ to both questions. The fact that he didn’t is powerful evidence that Congress never meant to threaten the states into establishing exchanges.”

In other words, McDonough’s statement reinforces the point I made yesterday: that Congress never meant the ACA’s exchange provisions to work like Medicaid, where Congress dangled federal money to encourage the states to participate.

Instead, the exchange provisions created a thoroughly conventional scheme of cooperative federalism: one where Congress set a national policy but invited states to implement that national policy if they wished. For the King plaintiffs to now claim otherwise is the worst kind of revisionist history.


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