No Good Options After King

Over at the Yale Law Journal Forum, David K. Jones and I have a new essay titled No Good Options: Picking Up the Pieces After King v. Burwell. The piece offers a close examination of the steps that the Obama administration and the states might take to mitigate the fallout of a government defeat in King.

As David and I explain, contingency planning hasn’t received nearly as much attention as you might have expected.

Part of the reason is strategic: the government’s supporters fear that discussing fixes might signal to the Supreme Court that eliminating the subsidies would not do much damage. The Obama administration, for example, has declined to tell Congress whether it even has a contingency plan. And while the ACA’s opponents suggest that the King aftermath might not be so bad, they have generally declined to endorse specific fallback plans.

With a Supreme Court decision likely in two months, however, it’s crucial to think about what happens the day after the case comes down. The administration and the states will have to make a number of hard choices in a short time—but they will have options:

Some [of those options] are straightforward and noncontroversial; others will face intense political resistance and press up against legal boundaries. Taken together, we believe [they] might enable policymakers to moderate, at least somewhat, the consequences of a government loss in King.

Even under the most optimistic scenario, however, millions of people will still lose their health coverage and the market for individual insurance in many states will still collapse. Vague claims that the administration has some sort of “fix” up its sleeve or that the states can snap their fingers and establish exchanges are, in our view, irresponsible. In the long run, of course, all but a few holdout states might establish their own exchanges, and Congress could always intervene down the line. In the near term, however, there are no good options: just halfway measures and ill-fitting patches.

For King junkies, the essay is packed with interesting stuff. It considers the possibility that the states lack the legal authority after King to transition to subsidy-eligible exchanges. It explores whether HHS has the legal latitude to deem some federally-facilitated exchanges to be state-established. And it discusses whether the states could simply designate to be their state-based exchange.

If all goes well, the Supreme Court will uphold the IRS rule and make this essay completely irrelevant. But even as I hope for the best, it’s high time to prepare for the worst.


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