Wisconsin could lose billions and see 268,000 forgo health coverage

By Bill Kaplan

In 2012, the U.S. Supreme Court upheld the Affordable Care Act (ACA), but ruled that state Medicaid expansion was optional. Nonetheless, 29 states, including 10 GOP- led states, expanded Medicaid (rejected by Wisconsin Gov. Scott Walker). But the Supreme Court will soon decide King v. Burwell, brought by the Competitive Enterprise Institute (partly funded by the Koch brothers). 

The lawsuit seeks to kill the ACA by convincing the Supreme Court to strike down federal tax-credit subsidies in states like Wisconsin that don't have a state exchange and rely on the federal exchange (Gov. Walker refused to set up a state exchange). At issue is some sloppy legislative wording in one section of the ACA that says tax-credit subsidies (used to purchase affordable health insurance) would be available through an exchange "established by the state". 

However, the New York Times reports that the "four words that imperil health care law were all a mistake....": 

* Former Maine GOP Sen. Olympia Snowe said: "I don't ever recall any distinction between federal and state exchanges in terms of the availability of subsidies.... Why would we have wanted to deny people subsidies? It was not their fault if their state did not set up an exchange"; the four words were "inadvertent language"; 

* Snowe was backed by Senate committee lawyers who worked for GOP members. One said: it was a "drafting error, we overlooked it. It was an oversight. Congress...always intended for the federal exchange to deliver subsidies". The other attorney said that the lawsuit argument was "contrary to the intent" of those who wrote the ACA. 

The consequences will be dire if the Supreme Court rules that tax-credit subsidies are only available on state exchanges. A new report by the Urban Institute, funded by the Robert Wood Johnson Foundation, outlines "the combined effect of not expanding Medicaid and losing marketplace (exchange) assistance" for Wisconsin in 2016: 
* 247,000 more uninsured if exchange tax-credit subsidies are lost; 
* 21,000 additional uninsured if Medicaid is not expanded; 
* $1.128 billion in federal exchange spending lost; 
* $481 million in Medicaid expansion funds lost. 

Many GOP leaders are nervous about King v. Burwell. Why? Angry voters forgoing health coverage. Most of the states affected by a possible adverse Supreme Court decision are led by GOP govs. and almost all of the GOP Senate seats up in 2016 are in these states, including Wisconsin Sen. Ron Johnson (supports overturning ACA). He has introduced a bill to extend temporarily the tax-credit subsidies on the federal exchange until 2017 (after presidential election) while repealing the individual / employer mandates and allowing bare-bones health insurance. However, Sandy Praeger, former Kansas GOP Insurance Commissioner, refuted Johnson, saying: "People who are reasonably healthy would just drop coverage. Only the unhealthy would keep buying health care. It would really exacerbate the problem of the cost of health insurance....a classic death spiral." 

The best solution in the event of an unfavorable Supreme Court ruling would be for Congress to change the wording "through an exchange established by the state" to "through an exchange established under the ACA". Pretty straightforward. 

-- Kaplan wrote a guest column from Washington, D.C. for the Wisconsin State Journal from 1995 - 2009

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