The sky may not be falling. A Kennedy line of argument today:
If tax credits are cut off in states with federally run exchanges, premiums will spike, and healthy people will likely drop insurance that they can no longer afford. Once that happens, however, the insurance companies will no longer have enough revenue to pay for sick peoples’ costs, so they will have to raise premiums even further. That, in turn, will cause more healthy people to drop care. The result is a “death spiral” where higher premiums beget fewer customers, which beget higher premiums, which beget fewer customers.
This threat of a death spiral raises constitutional concerns, because the Supreme Court’s first Obamacare decision forbids Congress from coercing states into taking certain actions. If states are forced to choose between setting up their own exchange or watching their individual insurance markets collapse, that could amount to unconstitutional coercion.
Justice Kennedy appeared to believe that it did.
That caused this:
Tenet Healthcare Corp. and HCA Holdings Inc. led a rally among hospital companies as a Supreme Court challenge to Obamacare’s insurance subsidies drew questions from a pivotal justice.
Anthony Kennedy, who is often a swing vote in important cases, said Wednesday there is a “powerful” point to the Obama administration’s argument that the health-care law would fall apart if the subsidies were ruled unlawful.
Hospitals rose more than all other stocks on the Standard & Poor’s 500 Index on Wednesday, as of 11:28 a.m. in New York.
“Hospitals will incur significant financial harm if subsidies suddenly disappear,” according to a court brief on the case from hospital groups. A decline in insured patients “could imperil some hospitals, and will make it more difficult for others to carry out their missions.”
So the smart money is on dismissal so far. I think we have our 5th justice. My wife is a beneficiary of Obamacare. It is the best coverage she has had since I left service, so I definitely have a dog in this fight, as do 11 million Americans. Here’s hoping…