Arizona just passed a bizarre new anti-Obamacare law that, in effect, promises to let the Supreme Court wreck the state's health-care system. It's a microcosm of the strange strategy Republicans have adopted against the law: a strategy that's leaving red states poorer and sicker.
The backstory in Arizona is the King v. Burwell case, which holds that federal subsidies are illegal in states that didn't set up their own insurance marketplaces — states like Arizona. If the Supreme Court rules for the plaintiffs, those states, including Arizona, will lose their subsidies.
That would be a disaster for those states. As Sarah Kliff writes, "Approximately 205,000 Arizonans are receiving coverage through the marketplace. Of those, 76 percent are receiving subsidies to help cover the cost of their premiums. An adverse ruling would likely lead the state's exchange to collapse, as healthy, young Arizonans who could only afford insurance because of the subsidies pull out and the exchange itself enters into a death spiral."
What Arizona has promised to do is let that happen. This is a promise it had no need to make: it could wait for the Court's ruling and then decide its response. But Arizona was so desperate to show its loathing of Obamacare that it wanted to go on the record early. And the way it did that is by closing off the easiest avenue available for fixing its insurance market.
This was a decision made, of course, by legislators and a governor who have insurance now, and will have it in the event of an adverse Supreme Court ruling. What will happen to the hundreds of thousands of Arizonans relying on Obamacare for their insurance is less clear.
The GOP high-risk legal strategy against Obamacare
As bizarre as Arizona's law is, it is, on some level, the logical endpoint of the GOP's lawsuit against Obamacare — a lawsuit that will really only hurt residents of Republican-controlled states.
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 wrecked insurance market — and a hefty tax bill.
This is a key point that's often forgotten in the King v. Burwell discussion: the lawsuit shuts off subsidies, but it doesn't touch the taxes and spending cuts that pay for those subsidies. 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.
In effect, the Republican plan to destroy Obamacare has become a plan in which red states subsidize Obamacare in blue states.
The Medicaid disaster
The effects of the Supreme Court ruling against Obamacare are, of course, speculative: the ruling hasn't happened yet, and probably will never happen. But the effects of the last SCOTUS ruling against Obamacare are very real: more than 20 Republican-led states have rejected the Medicaid expansion.
The result is about 5 million more Americans without insurance than there would be if those states had participated in the Medicaid expansion. And beyond that human toll lies a fiscal one: those states are forgoing about $37 billion in federal funds in 2016 alone, according to estimates from the Kaiser Family Foundation.
Some Republican governors are breaking with this strategy, realizing that it makes little sense to turn down the federal government's offer of free money. But conservative activists are trying to make them pay. Ohio Gov. John Kasich, for instance, accepted the Medicaid expansion, and is currently considering a run for president. Philip Klein, a writer at the conservative Washington Examiner, greeted news of Kasich's new PAC with this tweet:
I’m guessing Kasich’s PAC won’t be called, "The Committee to Expand Obamacare" even though that will be his legacy http://t.co/KO0gdarhq4— Philip Klein (@philipaklein) April 16, 2015
The fight against Obamacare isn't just political. Rather, it's become a cornerstone of conservative governance — and it's left red states poorer and residents of red states sicker, and might get a lot worse if the Supreme Court rules against Obamacare this year.
The irony of all this is that Republicans warned that Obamacare would wreck health insurance markets, do little to help the uninsured, and leave everyone else paying hefty taxes to fund a rolling disaster. In fact, Obamacare has covered millions of people at a much lower cost than expected. But as a byproduct of their tactics against Obamacare, Republicans are making their predictions come true, at least for their own residents.