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CPBJ Extra Blog

Another Supreme Court battle on Obamacare?

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As I write this, we're still awaiting the U.S. Supreme Court's decision on the contraception mandate, which is expected some Monday or Thursday before the end of the month.

It’s important for reasons that, at this point, I don’t think you need me to spell out, and it will mark the second time the judicial nine have weighed in on Obamacare. The first, as you’ll recall, was in June 2012 and established both the law’s constitutionality and the “You can’t force states to expand Medicaid” situation that is proving particularly pivotal in Pennsylvania.

(It also, you may recall, plunged me headlong into health care reporting my first week at the Business Journal. In retrospect, it was a pretty good introduction to the wild ride that has been covering Obamacare.)

I mention those two decisions because Joe Carlson thinks a third may be coming. He’s a writer at Modern Healthcare, and his article, “Obamacare legal battle threatens subsidies for millions,” is why I’m blogging about this today.

If you haven’t been paying close attention, Carlson’s story may strike you as a bit of a bolt from the blue. “What,” you may think, “a big threat to Obamacare and I’ve never heard of it?”

Actually, you have, because I’ve mentioned it a number of times. Here are a few of them:

• I’m a little surprised that 48 economists thought Halbig v. Sebelius — the case to decide whether subsidies can be offered on exchanges not directly established by states — important enough to merit filing this friend-of-the-court brief.

• This issue hasn’t been getting much attention lately, but it hasn’t gone away yet, either: Judge declines to halt ‘Obamacare’ insurance subsidies, and Indiana school districts sue over Obamacare.

• One significant undercurrent in the issue, explained well here, is the issue of whether subsidies will indeed be available for federally run exchanges. The official word is that of course they will be, but opponents of the PPACA have not all entirely abandoned hope that the courts will hold with their reading of the law, which is that it authorizes subsidies only for state-run exchanges. In that scenario, the argument goes, a federally run exchange could mean no subsidies and, in turn, possibly no employer or individual mandates.

In short, the issue hasn’t been a headliner because, well, it had appeared to be a really, really long shot. Carlson, however, makes it significantly closer. And I quote: “Experts say the issue is probably headed to the Supreme Court, which is likely to rule no sooner than the spring of 2015.”

What do you think: Does this thing stand a good chance of hitting our highest court? Or are Carlson and his experts a little overwrought?

I’m venturing no pronouncements on that, but I will say this: It would certainly set up a paradigm shift on state marketplace decisions. If you recollect, the feds tried really hard to get states to set up their own, and on the disastrous federal launch it looked as if states like Pennsylvania should have maybe taken the money to run the marketplace themselves.

But then the federal site got better, and a bunch of the state sites were still terrible, and now some states are scrapping their sites and jumping into the federal pool. Oh, and Sebelius successor Sylvia Mathews Burwell has made noises to the effect that states with failed sites may have to pay back the federal funds spent on them.

So, Pennsylvania’s decision to go federal has been looking better lately -- but if the Supreme Court ruled that it means Pennsylvania enrollees are ineligible for subsidies, it would flip the perspective again. Unless you’re an opponent of the law, in which case the opposite. And now I’m getting dizzy.

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