King VS Burwell: Or the attack on Obamacare round 2

So, my brother sent me the following email yesterday:

So, the Supreme Court is ruling (or might be ruling) that the States are NOT the executers of the Obamacare plan.  Federal “market exchanges” can be used instead of the States being responsible for setting up and running the program.

Hmmm….think this is a violation of the responsibility and authority of the States?

And here was my response:

Well, it is not that simple.  First, the law governs individual behavior, not a State’s behavior (i.e., the individual is required to purchase health insurance, not the State required to provide it).  However, the law allows for states to act either as executors or not act as executors.  ACA allows for a State to act as executors by establishing exchanges so that its residents are not forced to violate the law (i.e., they must purchase insurance).  If a State ‘opts out’ of executorship, then ACA requires the Federal gov’t to establish an exchange, which means the Federal Gov’t now acts as executor.  So the law, as written, both support state executor rights, and supersedes them.

So to answer your question: Yes, I believe that, originally, ACA removed the state responsibility of regulating health insurance when they made it an individual requirement. That horse it out of the barn, to speak colloquially.  It then placed executorship of that responsibility both at the Federal and State level. It allows for a State to either opt to be the executor of how individuals execute their responsibility; but by opting out, the State forces the Federal gov’t to be the executor of health insurance.

The King vs Burwell case (being heard) is a little more nuanced, and not a challenge to executorship per se; ACA states that, in order to help make insurance affordable, the Federal gov’t will provide subsidies to individuals enrolled in an insurance program “through an Exchange established by the State.”  Some are interpreting this literally; meaning you can only receive the subsidy if you are enrolled in an exchange set up by a State.  If your State did not set up an exchange, and you enrolled through the Federal one (as required by law) AND received subsidies, then King (the plaintiff) asserts that you violated federal law by accepting the subsidies illegally.  The money was only suppose to be available to those enrolled in State exchanges.

The direct question before the Courts is not specifically whether or not states still have the responsibility and executor rights of insurance, but the intent of the law when a state “opted” out of setting up the exchange.  Should people who use the Federal exchange (since their State opted not to set one up) be eligible for the subsidies, even though the letter of the law says “established by the State?”  If the Supreme Court says the letter of the law is legal, then the cost of using the Exchanges are so high, it will fail; eventually someone will successful demonstrate undue burden by the Federal Gov’t requiring such a costly thing as health insurance.

By striking down King’s claim, the Supreme Court allows the ‘intent’ of ACA to cover all the citizens, not just those resident in states with Exchanges.