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If Obamacare loses at the Supreme Court, it’s Republican states that suffer

Alex Wong/Getty Images

1) For Republicans, the challenge to Obamacare's individual mandate made good political sense: if the mandate was repealed, it would cripple the law. Obamacare would be a disaster from coast to coast. The White House would have to agree to repeal, or at least root-and-branch reform.

2) The challenge to Obamacare's subsidies makes less political sense: if the subsidies are ripped out of federal exchanges, it will only cripple the law in red states that loathe the legislation. Obamacare will work fine in states that want it to work; those states either have their own exchanges now or they'll quickly build them. But resistant red states will be left with a policy disaster — and a hefty bill.

3) This is a key point: if the Supreme Court rules for the plaintiffs in King v. Burwell, the subsidies will basically shut off in (mostly) red states. But Republicans in those states will still be paying the taxes and bearing the spending cuts needed to fund Obamacare. They just won't be getting anything back.

4) So the Republican plan is to make Obamacare a huge subsidy flowing from red states to blue states. Or, put more simply, the Republican plan to fight Obamacare is for Republicans to rip themselves off.

5) This isn't the Democrats' preference, by the way. Obamacare was originally a subsidy from richer, more insured blue states to poorer, less insured red states. Republicans, forgoing the Medicaid expansion in many states and now by trying to rip out the subsidies, are reversing that. Both parties have worked against their economic self-interest here.

6) This is why the GOP's political strategy is so bizarre. Let's say the Supreme Court rules against Obamacare — subsidies shut off in federal exchanges. The Republican belief is that this will give them huge leverage to gut the Affordable Care Act. They figure that in order to fix the law, Obama will have to let the Republicans tear into it.

7) But in this case, the GOP is taking its own voters -— along with million of poorer people who live in Republican states — hostage. If they had ripped out the individual mandate Obamacare would have become a problem in blue states as well as red. But ripping out subsidies from states that don't build their own exchanges doesn't hurt the states what want to participate in Obamacare at all — in fact, it helps them by subsidizing the law on their behalf.

8) Democrats might want to deal on Obamacare because they want, as a moral matter, to cover poorer people in red states. But on a practical level, the post-King status quo is a much bigger disaster for Republican states than Democratic ones.