(Bloomberg) — The U.S. Supreme Court probably shouldn’t have accepted a lawsuit challenging the Patient Protection and Affordable Care Act (PPACA) health insurance subsidies, President Barack Obama said, calling it an “easy case.”
“Frankly it probably shouldn’t have even been taken up,” Obama said Monday at a news conference at the Group of Seven summit in Krun, Germany.
A decision is expected this month in the suit, King vs. Burwell (Case Number 14-114), which challenges the availability of tax credits to discount the cost of insurance in at least 34 states. Opponents of the law say it allows subsidies in no more than 16 states that run insurance marketplaces, called exchanges.
The court will decide whether the Internal Revenue Service erred in issuing a rule making tax credits available in every state, regardless of the type of insurance exchange its residents use. The Democrats who wrote PPACA say they always intended the credits to be available nationwide.
In a separate but related case, the court on Monday rejected a bid by Maine to escape one requirement of Obamacare. The justices left intact a federal appeals court decision that said Maine must continue offering Medicaid coverage to young adults until 2019.
The health law temporarily prohibited states from cutting eligibility under Medicaid, a state-run program for low-income people that was supposed to be expanded to cover more of the working poor. A 2012 Supreme Court decision made the expansion optional for states.
Risk losing discounts
In the case against insurance subsidies, more than 6 million consumers who purchased insurance through the federal healthcare.gov system risk losing discounts on their monthly premiums if the court rules against the Obama administration.
The U.S. Department of Health and Human Services (HHS) has said there would be no administrative fix to restore the subsidies. The average insurance premium for PPACA coverage would almost quadruple in states affected by the ruling.
Obama said there’s no back-up plan because he’s confident the court will rule in the administration’s favor.
“It’s a bad idea,” he said of outlawing subsidies in most states. “It’s not something that should be done based on a twisted interpretation of four words in, as we were reminded repeatedly, a couple-thousand-page piece of legislation.”
Proponents of the law worry that skyrocketing premiums would cause many people to drop their coverage, propelling insurance exchanges into what economists call a “death spiral.” Only the sickest and most desperate Americans would buy insurance, driving premiums ever higher.
Obama said he has confidence the court, which has upheld other portions of the law, will again rule in favor of keeping the program intact. If not, he said he hopes Congress will enact legislation to retain the subsidies.
“I’m optimistic that the Supreme Court will play it straight when it comes to the interpretation,” he said. “If it didn’t, Congress could fix this whole thing with a one-sentence provision.”
That won’t happen, said John Barrasso of Wyoming, the fourth-ranking Republican in the Senate.
“Instead of bullying the Supreme Court, the president should spend his time preparing for the reality that the court may soon rule against his decision to illegally issue tax penalties and subsidies on Americans in two-thirds of the country,” he said in a statement. “Congress will not pass a so-called ‘one-sentence’ fake fix.”
—With assistance from Greg Stohr in Washington.