If the Supreme Court Limits Insurance Subsidies, the GOP Faces Political Troubles

Theda Skocpol, Harvard University, Lawrence R. Jacobs, University of Minnesota

The Supreme Court will hear a challenge to subsidies that help millions buy health plans. If it wins, pundits predict doom for ObamaCare, but two SSNers conclude that Republicans have the most to lose.

Looking in detail at what a Supreme Court decision to limit subsidies for health insurance purchases would mean for the Affordable Care Act and for politics at state and national levels, political scientists Theda Skocpol and Lawrence Jacobs develop an analysis very much at odds with conventional wisdom on the left and right.

In their new SSN brief, Skocpol and Jacobs point to the major provisions of the Affordable Care Act that are NOT at risk in the Supreme Court case. They project that health reform would continue to function smoothly for 50% to 60% of Americans living in up to half the states, including all Democratic-led states. Because a Supreme Court decision to restrict subsidies would target middle-class people living in conservative states, Republican governors and legislators would come under intense pressure to fix the problem. In any negotiations, President Obama and Democrats would hold a trump card – because they could simply refuse to repeal very popular health reform regulations that require insurance companies to accept all customers, regardless of pre-existing health problems. If Democrats hold firm on these regulations, Republicans will face angry insurance companies as well as voters who do not want to lose health benefits.

The Skocpol-Jacobs analysis was featured in a recent article by Sahil Kapur at Talking Points Memo, that focused on the implications for swing states in the 2016 presidential election. Skocpol has since published an OpEd in The Atlantic detailing possible ramifications for GOP presidential hopefuls following the Court's decision.

Not everyone agrees. Unlike many other observers, Skocpol and Jacobs suggest that an adverse Supreme Court decision will spur adaptations from quite a few state governments, which could move to authorize their own exchanges for the sale of subsidized health plans even if they continue to contract with others to perform website functions. In a recent blog post, Charles Gaba at ACA Signups surveys the range of views on this point. Contrary to Skocpol and Jacobs, SSN member David Jones has co-authored an opinion piece at the New England Journal of Medicine that says most states would not be able or willing to adapt to a Supreme Court ruling to limit Affordable Care subsidies.

February 2015