States Should Start It / If Weed is Worth it……..
Short of repealing Obamacare the next best thing would be finding a method to marginalize it in its presence. Oddly King v Burwell, along with 23 states plus DC that approved medical use of marijuana and three plus DC that approved recreational posession and use of the plant, may provide a path to doing just that if King prevails.
King v Burwell is the case challenging whether government subsidies can apply to qualified health insurance sold on exchanges run by the federal government. Proponents of King, led by Michael Cannon of Cato Institute, and Jonathan Adler of Case Western Reserve University School of Law, contend the law is clear that subsidies can only be applied in exchanges established by the states. As the issue was raised, the IRS simply declared that federal exchanges too are eligible for subsidies.
Four separate but related court cases challenged this IRS decision, and in November the Supreme Court agreed to hear King. The case is scheduled to be heard March 4th, with a decision sometime in June. In the event King prevails, most agree there will ensue chaos of a sudden affordability vacuum if the approximately 5 million people who own qualified health insurance bought in states with federal exchanges lose their subsidies. This will likely bring intense political pressure to find a fix, even as businesses, relieved of penalties triggered by employees obtaining subsidies will argue for other remedies.
In addition, many individuals will find the cost of unsubsidized ACA triggering plans now exceed 8% of their income, relieving them of the individual mandate and its tax for not buying insurance, except they will then either have to scrape to find the unsubsidized premium or be left uninsured with no other choices.
Several Republican governors of federal exchange states, including rising star Scott Walker are feeling nervous about a King win, and don’t seem to know what they may be able to do. At a National Governors Association event, they took to saying that it’s Congress’s job to deal with any fallout. None expressed any ideas of what states may be able to do short of somehow restoring the subsidies.
So what if federal exchange states, rather than looking to Congress, switching to a state exchange or piggybacking on another state’s successful state exchange, as has been suggested, would simply make alternate, non ACA qualified, more affordable choices available off the exchange?
Since I had never seen evidence to the contrary and had been told by both Andrew Schlafly, attorney with the Association of American Physicians and Surgeons, and Oklahoma Attorney General Scott Pruitt, whose name is on one of the other three cases, that they knew of nothing in the ACA to prohibit states from making available non ACA qualified choices off the exchange, I heretofore thought this was possible and within the law.
My take had been that the ACA only defined what must be in health insurance plans to be on the exchange, qualify for subidy, and avoid paying the mandate tax, making possible, with or without King, state provision of a parallel free system along side the government control system, allowing states, with their retained authority to regulate insurance through their insurance departments, the potential to allow or even require the availability of alternate choices off the exchange, understanding non qualified plans would not avoid the mandate tax.
I thought this may be especially attractive to those individuals discovering low cost direct primary care arrangements, where an increasing number of primary care physicians are offering unlimited care for a monthly fee. Here is a rapidly growing need for pure catastrophic insurance as a compliment, that ACA qualified plans have shut down.
I believed all this. Then, February 9, in a twitter exchange with Phil Kerpen, President of American Commitment, he sent me a link indicating otherwise. There is indeed federal code that prohibits what I thought was possible. The office of my Congressman, also previously unaware, identified it as a law from the 1940s that had been amended by Obamacare. Talk of leaving no stone of iron fisted control unturned!
So what to do now? State offer of non ACA compliant health insurance off the exchange, no matter how welcome, or as immunization against the affordability aspects of a King win in 37 federal exchange states, would run afoul of Federal law. It would be an act of defiance, but isn’t this what 23 states plus the District of Columbia did when they approved the medical use of marijuana? Taking it further, isn’t this what Colorado, Washington, and now Alaska and DC did by approving the recreational use of marijuana? So far, for those state actions, the feds have chosen to stand down. If legal weed is important enough to risk federal admonishment, how is offering citizens, still willing to pay the mandate tax, the choice of affordable non ACA qualified options off the exchange not? It would seem.
More likely, on an Obamacare challenge, the feds would push back hard, but states would have arguments in defense, as well as significant public support that may even exceed weed, especially if King prevails, subsidies are lost, and a sudden affordability vacuum ensues. While the stand down on marijuana would mean nothing in a legal sense, it may help state defiance on Obamacare play well in the court of public opinion, giving state officials more backbone to act.
States can point to their continued regulation of health insurance where the feds have found it convenient to not supplant them. State coverage mandates in excess of ACA essential minimum coverage rules still apply, as do their definitions of regional pricing zone boundaries. They can question also why their regulation of all other types of insurance remains intact, without federal meddling.
There’s the argument McCarran-Ferguson 1945 still gives states the authority to offer alternatives, so long as they don’t attempt to eliminate the federally designed plans. They could claim restriction only to such limited choices represents overbearing federal imposition and violates the Constitutionally protected freedom of their citizens to contract. They could point to a long standing tradition of state regulation of insurance in return for insurance being exempt from federal antitrust law.
Perhaps as important, since the ACA unquestionably allows doing absolutely nothing upon payment of the mandate tax, any opposition would be forced into the absurd argument that doing something substantially more than nothing in protecting others from one’s potential inability to pay their medical bills should be prevented, so long as the tax is paid. In fact, Congress, seeing this argument play out, may be motivated to specifically allow non ACA qualified offerings and reduce or eliminate the mandate tax for buyers, in recognition of their obvious reduction in potential liability to others by their actions.
If only one state or a few, federal exchange or otherwise, would boldly take this course of action, we would present, at least the opportunity to embark on a path to marginalize Obamacare in its presence. A parallel free system, alongside the government control system could be created, and repeal would no longer be necessary as people could freely choose which system they prefer.
The sudden chaos of a King win would be the perfect time to have alternate choices available, as the potential to quickly attract sufficient numbers to spread the risk enough to insure viability would be most opportune. If weed is worth it………