If ACA subsidies are gutted by Supreme Court, what will Ducey do?


Crossposted from DemocraticDiva.com


While many legal experts express confidence that the upcoming King v Burwell Supreme Court decision will be in favor of the Affordable Care Act, the Court did cause alarm by agreeing to hear it in the first place. Here is what is at stake:

At the heart of the King case are the tax subsidies offered by the federal government to those who cannot afford their own insurance. These subsidies are critical to achieving Obamacare’s goal of insuring even the least well off. At present, those eligible for subsidies can get them whether they purchase on the federal exchange or a state one. That could change on account of a glitch in the ACA, which can be read to say that you can only get a subsidy if you signed up on a state-managed exchange. If the Supreme Court signs off on this interpretation, the federal government cannot subsidize insurance for the less well-off in any state that has declined to set up its own exchange.

In King v. Burwell, a unanimous decision by a panel of the U.S. Court of Appeals for the 4th Circuit sided with the Obama administration, rejecting the challengers’ argument that the provision of the ACA that authorizes tax credits for insurance purchased on an exchange “established by the State under section 1311” doesn’t authorize tax credits for insurance purchased on an exchange established by the federal government. Supporters of the ACA call this a mere “drafting error.” Opponents claim this is a clear case of statutory interpretation: The law says “state” exchanges, and that is what was intended. If this interpretation prevails, more than four million people lose those subsidies.

It will be decided next June and, should a majority of Justices find for the plaintiff, Arizonans currently receiving subsidies to help them pay their insurance premiums on the Federal exchange will lose that, since our state opted out of creating our own exchange.

Governor-elect Ducey has described the ACA as a “monumental failure” and has characterized the Medicaid expansion portion of it extending coverage to adults at 138% of the federal poverty level as a “massive new entitlement” that is “now being expanded as a middle class entitlement”. Since 138% FPL is considered middle class(!) by Doug Ducey, my guess is that people earning between 138 and 400% FPL – the group eligible for subsidies on the exchange – are wealthy to him.

A key theme of Ducey’s primary and general election campaigns was resisting “federal overreach” and in a pledge to Arizona voters, he vowed, if elected Governor, to “support all efforts by our congressional delegation to repeal and replace Obamacare”, while pursuing “every available means to negotiate a Medicaid waiver for Arizona, allowing us to take care of people who genuinely need help without turning it into a vast and unaffordable new entitlement”.

Again, if “genuinely need help” is defined by Doug Ducey as having an income significantly south of 138% federal poverty level, which is around $15K for an individual and $32K annual income for a family of four, it does not bode well for him agreeing to the creation of a state health insurance exchange providing subsidies to people luxuriating with slightly higher incomes than that. This is not even taking into consideration the inclinations of the Legislature, which remains in GOP hands.

It’s possible that business and health care provider interests will again prevail upon the new Governor and some GOP legislators to do the exchange so that thousands of Arizonans will not drop off the rolls of the insured. But I’m not holding my breath that Doug Ducey, who is far more of a right wing ideologue than Jan Brewer was and is openly hostile to the ACA, would go along with that.

So hope for the best in the Supreme Court decision and be reminded, once again, that elections have consequences.


  1. Arizona went with the Medicaid expansion because the hospital industry pushed hard. Their financial model was starting to hurt because of the large number of unpaid clients.
    It will be interesting to see what the health insurance does if the state exchanges are deemed to be illegal. Apparently, it is an easy fix to affiliate with the federal exchange, healthcare.gov. and get around a potential adverse Supreme Court decision, that is what Oregon is planning.
    My sense is that Ducey will wait and see which way the wind blows in other conservative states.

  2. You know, I have been a supporter of the ACA in the hopes that we could provide health care to everyone at reasonable costs. That hasn’t happened, but I thought if we could tweak the current iteration of it a little bit, maybe we could get there, but I was shouted down as an idiot because Democrats had already negotiated enough. Then I found out that during a panel event last year about how the legislation passed and turned over a sixth of the U.S. economy to the government, ACA architect Jonathan Gruber admitted that the Obama administration went through “tortuous” measures to keep the facts about the legislation from the American people. Gruber said, “Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical to get for the thing to pass.”

    So, enough Democrats have told me I was stupid to think we can change the current laws to make them work better, and that I was stupid in standing by and encouraging the law to pass, that I am feeling pretty stupid all over about this. I am thinking I was wrong all along about the ACA. It doesn’t mean much in the big scheme of things, but I think I have to change my position and throw my support behind repeal of the ACA. It is a shame because I thought there was so much merit to the ACA, but it seems like a lot of skullduggery is involved and no one wants to improve what we have now.

    • Well, I always knew Gruber was an asshole. He was the Country Club Republican economist brought in to make the health care law the Heritage Foundaton/Romney plan, in a futile effort to get Republicans like Olympia Snowe to support the bill. Which didn’t work.

      I’m not sure why you are suddenly against it now, since the whole thing was pitched to the likes of you. But good job on repeating the latest right wing talking points!

      • Oh, I am not REALLY against it. I would like to see it modified a little to correct some problems. But everyone is so intransigent and unwilling to budge that compromise seems impossible. And if no changes can be made, the ACA has serious enough shortcomings that the only other recourse is to repeal it and try again.

Comments are closed.