(Bloomberg Politics) — The conservative lawsuit against Obamacare's premium subsidies is important, but also wonky, not the sort of thing that does well on cable news. And yet for a few weeks last fall, the biggest story on Fox News was the unearthing of videos depicting Jonathan Gruber, Obamacare architect, demonstrating the argument conservative legal scholars have been making: Federal exchange states should not have access to health care tax credits.
The Gruber videos were big not just because they showed someone vaguely within President Barack Obama's orbit talking about misleading voters, but because they gave a vivid example of what Congress meant by an exchange "established by the State" — a key question at the heart of the lawsuit, which the Supreme Court is preparing to hear on March 4.
Reporters on the health care beat have been covering the conservative case against the PPACA subsidies for years, but in the last few weeks, there's been an increased effort to dig into what Congress intended and who the four Virginians who apparently want to unburden millions of people of their subsidized health insurance really are.
And while the New Republic, Mother Jones, Salon, and others have all raised important questions about the validity of the case and its defendants, it's not just left-leaning outlets analyzing King v. Burwell. The Wall Street Journal, whose editorial board has been critical of the health care law in the past, reported this week that three of the four plaintiffs in the case might not have valid legal grounds to sue.
As the media continues to dig, the focus has centered on two questions. First, did lawmakers intend for subsidies to entice states to create their own exchanges, or were subsidies always intended to be universal? And second, do the plaintiffs have standing? In other words, do the four people suing over subsidies have a legal basis to claim that they are harmed by subsidized insurance? Here's the major evidence that journalists have turned up in the last few weeks.
What did Congress mean?
The main question in the King case is whether Congress intended for states using the federal exchange to have access to tax credits, or if the credits were meant to be a reward for creating a state-based exchange. Over the last few years, and especially in recent months, we've seen evidence from both sides attempting to prove what lawmakers intended.
Here are the facts: The Affordable Care Act amended the IRS tax code to provide subsidies for plans "which were enrolled in through an Exchange established by the State under 1311." Section 1311 lays out guidelines for states to create their own exchanges, and doesn't mention a federal exchange. The Obama administration argues that this is a drafting issue and that it was never Congress's intent to deprive states of subsidies. A later section gives the Health and Human Services secretary the power to "establish and operate such Exchange within the State." The conservative groups and people suing the administration, led by the Competitive Enterprise Institute, argue that Congress wanted to use the subsidies to reward states that built their own exchanges.
Each piece of evidence speaks to lawmakers' intent, which is why the Gruber video was so powerful — here was the guy who helped create Obamacare saying the subsidies were a reward, or a threat to build an exchange, or else lose out on millions of federal dollars. But while Gruber got the most attention, there are also plenty of other things — emails between reporters and staffers, past statements from lawmakers, and votes in Congress — that give credence to the idea the bill was just sloppily written.
The best pieces of evidence are times when Republicans, whose opposition to Obamacare has been consistent, proved inconsistent in the way they interpreted the law. For example, Sen. John Barrasso of Wyoming told the Washington Examiner last month that "a reading of the law is very clear…if a state chose not to set up a state exchange, people from those states were not supposed to get subsidies." But as Simon Maloy at Salon wrote last month, in 2011 Barrasso said the administration would end up paying $900 billion in subsidies when people left their employer plans for the exchanges. Maloy wrote:
"Significantly, FactCheck.org asked Barrasso's office where that $900 billion number came from, and they pointed to another Op-Ed by Sen. Ron Johnson and Douglas Holtz-Eakin, who arrived at that total by assuming that every single worker in America will drop out of employer-sponsored coverage and purchase insurance through the state exchanges."
By that point it was clear there wouldn't be an exchange in every state. But Barrasso isn't the only one whose memory doesn't stretch back to 2011. Brian Beutler at the New Republic noted last month that all but three Republicans who were in Congress in 2011 voted for a bill premised on the idea that subsidies were universal. Republicans and Democrats banded together to repeal a rule that would have "significantly expanded the number of expenses businesses are required to report to the IRS," Beutler wrote.
To pay for the lost revenues, Congress added rules calling for the government to aggressively collect money from people who received too much subsidy money. This happened after several states said they weren't going to build exchanges, and when the Congressional Budget Office estimated how much money retrieving overpaid subsidies would generate, it assumed that all states would be eligible for subsidies. That was the estimate Congress used when it passed the bill.
