(Bloomberg View) — Sometime in the next few weeks, the U.S. Supreme Court will rule on whether the federal government can subsidize people's health insurance in the 37 states that haven't set up Patient Protection and Affordable Care Act (PPACA) exchanges. Behind that fight is another one, just as interesting and almost as important: Who gets the blame if the government loses?
The case, King vs. Burwell (Case Number 14-114), revolves around a phrase in the law that says insurance subsidies are available on exchanges "established by the state." The plaintiffs and their supporters say this shows Congress meant to use the subsidies as a cudgel to compel states to create their own exchanges. Now that the strategy has failed, they argue, with some states refusing to build exchanges and instead defaulting to the one run by the federal government, the government should accept the consequences and withdraw those subsidies.
Obamacare proponents say that's not what Congress intended. They insist the phrase in question was never intended to restrict subsidies, and instead amounts to a typo — one that conservatives have exploited at the expense of the newly insured.
Why does this debate matter to anyone but the pundits? After all, it's not clear how much the question will influence the court's ruling. "The statutory text — not only the 'established by the state' language, but the entire statute — is what matters most," Nicholas Bagley, a University of Michigan law professor who has written extensively on Obamacare, told me. My Bloomberg View colleague Megan McArdle notes that the government hasn't even made the "drafting error" argument part of its case.
The more significant impact of the debate over intent, if the court rules for King, comes in two parts. The first involves the Republican Party's image: If a consensus forms that conservatives stripped 8 million people of health insurance because they insisted on litigating a typo, that plays into the Democratic narrative of a party that's poorly attuned to the financial concerns of middle-class voters.
On the other hand, if Obamacare's opponents can convince the public that Democrats brought this on themselves (by trying to coerce state governments and then changing their story when that approach didn't work), those opponents can try to avoid taking the blame for people losing their insurance. The inability of Republicans to agree on a legislative alternative in the event of a ruling for King only underlines how messy those consequences could be.
