Politics & Policy

Don’t Ignore the King Winners

(Photo Illustration: NRO; Image: Valerye2007/Dreamstime)
A decision in favor of the plaintiffs would help more people than it would hurt.

As we await a decision in King v. Burwell, public focus is shifting from the legal arguments to the practical and political consequences if a majority on the Supreme Court orders the Obama administration to give meaning to the words “established by the state.” If the Court does, there will be three major immediate impacts in the states that declined to establish exchanges:

1. Millions will be exposed to the full cost of Obamacare’s sky-high premiums, with taxpayers no longer picking up the tab via subsidies.

2. Millions will have the chance to regain lost hours and income at work, because the employer mandate and its infamous 30-hour rule will no longer be in effect.

3. Millions will be exempt from Obamacare’s individual mandate, the most hated part of the law.

We know President Obama’s solution: a “fix” that saves subsidies for the people in the first group by revictimizing people in the other two.

RELATED: Obama Hits Supreme Court for Agreeing to Take King v. Burwell in the First Place

Unfortunately, he is being abetted by the media’s reporting exclusively on people in the first group, the King losers. The government has tallied 6.4 million people currently receiving subsidies through Healthcare.gov, and the figure has been widely reported. Some stories note that the subsidies cost taxpayers a cool $20 billion per year, but there is no further attempt at balance. It’s as if the two groups of King winners don’t exist. Yet if it were not for the King winners, the case could never have existed in the first place.

To have standing to bring a lawsuit, a plaintiff needs to show a specific, concrete injury. In King and related cases, the plaintiffs are individuals and employers who are subject to mandates only because of the illegal subsidies. That’s because the way the employer mandate is written, it applies only to companies with subsidy-eligible employees. No subsidy, no mandate, no 30-hour workweek. And the way the individual mandate is written, anyone who would have to spend more than 8 percent of his or her income on Obamacare premiums is exempt. Without subsidies shifting those costs to taxpayers, and with premiums skyrocketing, that will include almost everybody.

RELATED: No Republicans Voted for Obamacare, so It’s Not Their Problem to Fix

So how many King winners are there, and who are they?

According to an analysis by Michael Cannon of the Cato Institute, a victory for the plaintiffs would free approximately 57 million people working for 250,000 employers from the employer mandate. Most of those, however, would be only subtle winners, because they had employer-sponsored insurance before and after Obamacare. What they would win is lower cost and perhaps more choices regarding health plans.

The really big winners if the employer mandate is struck down in federal-exchange states will be the victims of the mandate’s 30-hour rule, which Jimmy Hoffa Jr. and other union leaders famously said “destroy[s] the foundation of the 40 hour work week that is the backbone of the American middle class.”

A study by former Congressional Budget Office director Douglas Holtz-Eakin and his colleague Brittany La Couture at the American Action Forum found that, in states where King would undo the employer mandate, 3.3 million workers want full-time jobs but are stuck working part-time. They could all stand to benefit from the removal of the onerous employer mandate. The study also found that 1.27 million people not currently working at all would be added to the labor force. The entire economy, in other words, would be a big-time winner.

RELATED: How Obamacare Is ‘Working’

The media don’t tell these stories, but they aren’t hard to find. We got lots of them just by asking the e-mail list of our little organization, American Commitment. People like:

‐ Jessica A. in Woodstock, Ga.: “My husband’s hours were cut from 40 to less than 30 because of Obamacare. He had to find a second part-time job to supplement our income. We thank the Good Lord that he was able to find that second job, but we both went through a lot of stress not knowing what was going to happen before he was hired by them. And even though we are thankful for the extra work, his hours are not as good as they were before and the children and I barely see him anymore.”

‐ Charlie L. in Greensboro, N.C.: “I used to teach six or seven classes at a community college as an adjunct instructor for full-time equivalent. Now I’m limited to only four. That’s a 40 percent reduction in income!”

‐ Tom S. in Salt Lake City: “I am a paraprofessional working with special-education students in a high school. I help coach football and basketball there as well. Before Obamacare I was able to work over 30 hours per week and I received a stipend for my coaching. Now my hours are limited to 28 hours, and my coaching, which I love to do, is now considered to be on a voluntary basis. This has caused me to work another part-time job during the summer to make ends meet. This is an outrage that people like myself have been forced into this position and that our plight is completely ignored!”

RELATED: Obamacare is a Horror Story for Young Americans

And we’ve heard story after story from parents whose teenage and young-adult children are simply unable to find full-time work.

‐ Thomas W. in Cincinnati: “My three teenage working sons are now under 30 hours. This hurts us parents to cover more of their costly needs.”

‐ Jim G. in Tucson: “I have three children ages 22, 24, and 26 who cannot find full-time work due to this disaster.”

‐ Sherrie W. in Conroe, Texas, says her son “has to work two jobs in retail to pay loans.” Why? The IRS rule: “He could only get 27 hours because of it.”

If King wins, that means the IRS applied the employer mandate and the 30-hour rule to all of these individuals and families illegally.

The other group of King winners is the 11.1 million people who will be freed from the individual mandate and an average tax penalty of $1,200, according to the American Action Forum study. That’s nearly twice as many people as stand to lose subsidies. People who already paid the penalty tax would be due immediate refunds from the IRS, and millions more would not be punished in coming years just for choosing not to buy into Obamacare.

RELATED: Obamacare Exchanges on Life Support

Some people overlap both groups:

‐ Stephanie B. in St. Petersburg, Fla.: “For two years I have been scheduled for 28 hours per week,” she writes. “I never did purchase any health care coverage. Even with the government subsidy, I would have to pay $244 per month! I attempted to have the penalty for not purchasing Obamacare waived. I was refused. So my income has been cut by 20 percent, I have no health care coverage, and I had to pay the federal government a penalty.”

#related#None of this is to say that Congress should react to a King victory by declaring that the winners outnumber the losers and therefore doing nothing. The losers are real too, and 6.4 million people should not be punished for being enticed into buying an expensive product by the false promise that taxpayers would pick up the tab. Many of the people would just like to get back their old, pre-Obamacare plans that they could afford without subsidies, which would require Congress to act.

But whatever Congress does to help the King losers, they should not even consider revictimizing the King winners with a “fix” that reimposes mandates found illegal by the Supreme Court.

— Phil Kerpen is the president of American Commitment.


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