Not much. That’s what will happen to Oregon’s vanguard medical care system if the U.S. Supreme Court strikes down federal insurance subsidies under the Affordable Care Act, a goal long-sought by congressional conservatives.
That’s the prediction of State Sen. Alan Bates, D-Medford, a physician and longtime engineer of legislation shaping the Oregon Health Plan. But there are still question marks; it’s no lock for Oregon to keep its secure status as a state-run system, say doubters, and that could throw health care into chaos.
The high court is expected to rule sometime in June on the politically charged matter and, although the vote will be close, Bates predicts, he expects the justices to adhere to the intent of the law, not the letter of the law, meaning they will allow the ACA to stand as is, providing insurance subsidies to all states that use the federal HealthCare.gov marketplace — not just states that established their own insurance marketplace.
A dozen states set up their own insurance pools, making it possible for low and middle income people to afford soaring medical costs. This state, with its Cover Oregon website, was one of them, but when that system failed amid computer difficulties and intolerable waits, Oregon did something unusual: it went to the feds and asked to use HealthCare.gov, but kept the state system going.
"We didn’t go on the federal exchange,” says Bates. “We didn’t because we were worried about this issue coming up and it did. We just borrowed the feds’ software, that’s all, as if we went on Oracle and got it. All our legal help says Oregon won’t be affected."
Bates, a doctor and a health care pioneer in the Legislature, says Oregon may have safely positioned itself, but most other states — if the high court rules for the plaintiffs — are headed for a “collapse of the exchange,” he says, because people won’t be able to afford premiums without subsidies.
“The only risk to Oregon is that some insurers are multistate. They will have a hard time,” he notes, “but we’ll be in good shape. Ninety-five percent of Oregon is insured now. It used to be as low as 75 percent. The last 5 percent don’t want to be insured but could be.”
Plaintiffs in the case argue that federal subsidies should be available only in states that set up their own insurance marketplace, not in the states that use a marketplace set up by the federal government.
The Obama administration defends the ACA, saying the intent of the law clearly was not that restrictive — and was meant to provide an insurance exchange for all.
Politically, congressional conservatives and other foes of the ACA “want to control the presidency,” says Bates, “but if the court makes a bad decision, it will be really daunting for millions of people who will lose health insurance. If it’s not subsidized, people will be very angry because the risk isn’t spread to all. There will be political fallout. It will be a huge political football.”
A decision against Obamacare would immediately force 37 states to set up state-run exchanges or let health care go back to pre-ACA days, where millions can’t afford it, says Bates.
Will Congress try to fix the flaw in the ACA language, the “mistake” that allowed plaintiffs to get a legal foothold?
“Well, Congress is controlled by Republicans, and they have a hard time making decisions,” says Bates. “They want to get rid of the whole system.”
Freddy Sennhauser, vice president for marketing and communication for AllCare, a coordinated care organization here, agrees with Bates.
“If you have OHP, the ruling is not going to affect you. It would affect millions of folks in red states, most of whom didn’t create their own exchange. Oregon is not affected because it’s a quasi-state exchange. … If the Supreme Court rules it unconstitutional, those states (without their own exchange) will lose their subsidy.”
Like Bates, Sennhauser predicts that a court gutting of the ACA “will create chaos and havoc” in those states, although congressional Republicans are preparing bills to change the one sentence in the law that enabled the suit — and another bill to put off enforcing the ruling for a year.
“The justices are aware that such a decision would cause huge chaos and suffering for 5 million people,” he says. “If history is any guide, the chief justice will be innovative and view (payments toward ACA by states without exchanges) not as a penalty but as a tax — and will affirm the law can proceed. That’s the spirit of the law.”
State Rep. Julie Parrish,R-West Linn, who helped forge Cover Oregon in the Health Committee, disputes the idea that Oregon is safe from an untoward high-court ruling.
“There’s a very real possibility, after the court case, that our technology with the federal government (HealthCare.gov) would make us no longer a state exchange,” Parrish said, in a phone interview. “We might have our own state legal opinions but it’s the federal government that’s going to tell us our status and they’ve been silent, so I’m very concerned.”
Parrish added that her discussions with Oregon Republican Congressman Greg Walden lead her to believe “we’ve put ourselves in a position where that could be a possibility. The IRS and Congress will make that decision about Oregon.”
The feds, she adds, could say they spent $300 million to help Oregon roll out Cover Oregon and, because it went belly-up and we’re now using the federal infrastructure, they could demand their money back.
“We’re in a weird jeopardy position,” she notes. “It’s a pretty big mess. This lawsuit is our own fault because of Oregon’s mismanagement. It may seem fair or not fair, but we have to follow the law, in which case taxpayers are going to be harmed.”
Parrish spoke darkly of “clawback,” that if the court ruling “does not go our way” and the system disallows Oregon’s standing as a state-run exchange, then citizens who’ve bought health insurance and gotten credits could get notice from the IRS that they owe lots of money.
The politics of the case mirror the bitter partisan gridlock of Washington, with Republicans “really driving this whole process, trying to repeal Obamacare 50 times in Congress,” says Sennhauser. “If they win, it will punish their own citizens in their states. Any state that didn’t participate in ACA made a very foolish mistake. … Even if you don’t buy the insurance, you still have to pay the tax, but you don’t get any benefit from it.”
Former 12-year state representative and gubernatorial nominee Dennis Richardson, a Republican, said the Supreme Court should send the issue back to Congress to fix the flawed language.
“The consequences could be so dramatic,” says Richardson. “The Supreme Court is not the place where such decisions should be made. It will affect so many lives. But they are smart people on the court. They will be careful. There’s too much at stake.”
John Darling is a freelance writer living in Ashland. Email him at email@example.com.