Politics & Policy

Why HHS Has No Plan B

HHS secretary Sylvia Burwell (Alex Wong/Getty)
As King v. Burwell comes before the Court, the administration’s only strategy is fear-mongering.

The case of King v. Burwell, in which the Supreme Court will hear oral arguments tomorrow, is a major test of the implementation of Obamacare. A ruling for the plaintiffs would invalidate health-care tax subsidies for Americans who purchased insurance through the federal exchange, Healthcare.gov, rather than through a state exchange, as the law specifies.

Last week, in a letter to a member of Congress, Secretary of Health and Human Services Sylvia Burwell said that the administration has no backup plan in the event that the Court rules against it.

Burwell’s scare tactics were transparent: “First, millions of people would lose their health insurance subsidies and therefore would no longer be able to afford health insurance; second, without tax subsidies healthy individuals would be far less likely to purchase health insurance, leaving a disproportionate number of sick individuals in the individual insurance market, which would raise the costs for everyone else; and third, states that did not establish a state marketplace would return to a time when the recourse for those without insurance was to seek care in hospital emergency rooms, further driving up insurance costs for everyone.”

Never mind that her first two points describe problems that were largely created by Obamacare. As for the third point, multiple studies have shown that Obamacare has, at least temporarily, increased ER visits.

On Thursday, Fox News host Greta Van Susteren wondered incredulously, “I don’t get why the Obama administration has no plan B ready for this one; I sure would.”

But Burwell’s position is rather different: “We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our healthcare system that would be caused by an adverse decision.”

Writing in the Wall Street Journal last Wednesday, freshman senator Ben Sasse (R., Neb.) laid out a vision for a Republican plan to temporarily shield Americans from massive health-insurance disruptions if the Supreme Court decides to hold the government to the plain language of the Affordable Care Act (further bolstered by the plain language of now persona non grata Jonathan Gruber) that subsidies may be paid only to consumers who purchase through an exchange “established by the state.”

The IRS chose to interpret that clause as meaning that consumers who purchase insurance through an exchange established by the federal government also qualify for the subsidy — an interpretation that is plainly unlawful and without any support in the ACA.

Of course, this doesn’t mean that the Court will do what it should — and what it usually does in less political cases — and rule that federal agencies may not invent law based on a guess as to legislative intent, particularly a guess which seems so divergent from the plain text of the law.

Liberals are twisting in the wind, making excuses such as Professor Timothy Stoltzfus Jost’s description of the ACA as “a statute whose words clearly say what Congress clearly did not mean.” But, putting aside the professor’s dubious claim about congressional intent, if government is allowed to enforce laws other than as they are written based on a flimsy claim of “I know what they really meant,” where do you draw the line?

To be sure, with this administration there are no enforceable lines. No red line in Syria, no constitutional prohibition against the president’s summarily granting amnesty to illegal aliens — although both of those lines were clearly drawn by Barack Obama himself. His eraser is more permanent than his pen.

But a forward-thinking liberal should be careful what he wishes for in King, because Democrats are not going to have control over the executive branch forever. Imagine the outcry from the Left if a future conservative president were to order his own HHS or IRS to take a regulatory action regarding abortion or taxation using the “I know what Congress really meant” argument.

In a sense, King is not a challenge to the ACA itself, as some pundits have put it; the lawsuit simply aims to make the government live by the letter and clear intent of the law. That said, a ruling to enforce the law as it is actually written would do enormous damage to the survivability of Obamacare, because only 13 states (plus the District of Columbia) have state-based exchanges.

There’s another important implication of King which is too infrequently mentioned: A ruling for the plaintiffs would invalidate the “employer mandate” in states without a state-based exchange (there seems to be little debate about this, even among Obamacare supporters). This is a potential huge boon to employers, and therefore to employment, in those states smart enough to refuse to be co-opted into the de facto federal takeover of the health-insurance industry.

This, as much as the question of disruption to the several million individuals who purchased insurance through Healthcare.gov, must have the administration extremely nervous. Imagine 37 states suddenly free of the employer mandate. A pleasantly reminiscent whiff of freedom in a country suffering through the persistent stench of Obama statism.

Given the potential earthquake in the event of a correct ruling in King v. Burwell, and the fact that at this point it is impossible to guess which way the case will be decided (except that it will probably be a 5 to 4 vote), from a policy perspective it would make sense for the administration to be prepared to shelter citizens from the inevitable damage of its own lawlessness and carelessness.

But this isn’t about policy; it’s about politics. And that’s why Secretary Burwell doesn’t have a plan if the government loses King (or at least won’t admit to having one), but a Republican senator does.

And Ben Sasse is not alone. Senators Lamar Alexander (Tenn.), Orrin Hatch (Utah), and John Barasso (Wyo.) laid out their own “bridge away from Obamacare” in a Washington Post op-ed on Sunday. Not to be outdone by the other side of the Capitol, on Tuesday morning Republican Representatives John Kline (Minn.), Paul Ryan (Wisc.), and Fred Upton (Mich.) put forward their own state-based competition-inducing tort-reforming Off-Ramp from Obamacare.

And so I have an answer for Greta Van Susteren: The reason that the administration won’t discuss a backup plan is that part of its strategy is to maximize the public’s fear of a ruling for the plaintiffs. It believes that since public pressure seemed to work on Chief Justice John Roberts the last time Obamacare came to the Supreme Court, it might work again.

Unfortunately, the Obama administration’s “scare them into submission” tactics could work. Republicans, until quite recently, have done a poor job (in part because of the media’s determination to oppose them) of showing the public what a “repeal and replace” alternative would really look like. If Republicans should have learned anything from the last presidential election, it’s that you can’t beat something — even a not particularly appealing something — with nothing. But, from the efforts in the last few days of the senators and representatives mentioned above, it appears that some of them at least have learned that.

No doubt the propaganda dispensed by Ms. Burwell and other supporters of Obamacare is intentional misinformation. But when it comes to the public — and perhaps even the Supreme Court — misinformation might be the only information they have.

And that, Ms. Van Susteren, is why, for the Obama administration, Plan A is having no Plan B.

— Ross Kaminsky is a self-employed financial-markets trader and investor and a senior fellow of the Heartland Institute. He hosts The Ross Kaminsky Show on Denver’s NewsRadio 850 KOA and fills in for radio talk-show hosts across the country. You can reach Ross by e-mail at rossputin@rossputin.com.

EDITOR’S NOTE: This article has been amended since its initial posting.​

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