Everybody laughed off the constitutional amendments that a handful of states added over the past few years — prohibiting the implementation of the Affordable Care Act, specifically the individual and employer mandates — as meaningless messaging measures.
But if the Supreme Court rules in King v. Burwell to invalidate tax credits on the 30-plus states that used the federal HealthCare.gov website, it might not be so funny.
If the Court disallows tax credits on the federal exchange, most states could prevent their residents from losing financial help by creating their own exchange. They might not, but they could. Problem solved.
But for this handful of states, that might not be as easy as it sounds. Those constitutional amendments that were seemingly useless at the time could gum up the works. Some of the law’s opponents already have argued that the amendments would prohibit those states from setting up an exchange — in effect, forbidding them from fixing the law within their borders.
Alabama, Arizona, Ohio, Oklahoma, and Wyoming have passed anti-Obamacare amendments, according to the National Conference of State Legislatures. And more than 1 million people in those five states would lose tax credits if the high court rules against the Obama administration later this year, according to estimates from the Kaiser Family Foundation.
The state amendments, which the conservative advocacy group American Legislative Exchange Council helped to advance, don’t say anything specific about establishing an exchange. But read between the lines, and the states could run into yet another round of Obamacare lawsuits if they try to sidestep the court’s decision.
And if nothing else, the law’s opponents have proven litigious.
Take Ohio’s amendment, with the necessary caveat that each state’s measure is distinct and exists in its own legal setting. It prohibits any state or federal law from compelling — with, for example, the mandate penalties — anybody from participating in a health care system. At the moment, that doesn’t matter — the U.S. Constitution’s Supremacy Clause means that the Affordable Care Act trumps any state-level measures to stop it.
If the court rules against the Obama administration and nixes the tax credits, though, the mandates are effectively neutered. The employer mandate in particular is triggered by the credits. No tax credits, no penalties — and no problem with the freshly amended state constitution, though there will be the tens of thousands who lose financial help to pay for insurance.
But if the state moved to set up an exchange, thereby subjecting its residents to the mandate penalties again, opponents could argue that it was violating the constitutional amendment, which passed in 2011 with a nearly two-thirds vote.
“That is the potential problem,” said Jonathan Adler, a law professor at Case Western Reserve University who helped craft the current challenge to the HealthCare.gov subsidies. “Tax credits trigger the employer mandate penalties and alter the incidence of the individual mandate penalty.”
Ohio Gov. John Kasich hasn’t ruled out trying to set up an exchange. “There are a lot of options you have to think about,” he told Bloomberg Politics’ David Weigel. But if he did, he could be asking for trouble. The conservative 1851 Center for Constitutional Law in Columbus already argued in 2012 that the state’s constitutional amendment prevented the establishment of a state-based exchange.
“Ohioans created a likely-insurmountable legal hurdle to state officials implementing Obamacare in Ohio through an Obamacare-compliant state health care exchange,” the group wrote.
A few of the law’s supporters consulted by National Journal believed that state officials should have the legal leeway to create an exchange despite the amendment. “The Ohio statute is worded in a way that would seem to give the governor a lot of flexibility,” said Nicholas Bagley, a law professor at the University of Michigan.
Overall, 8 million people could lose their health insurance if the Supreme Court rules against the Obama administration. That’s probably why some governors like Kasich haven’t completely ruled out setting up a state exchange as a post-decision workaround.
But if Kasich wanted to amend the state constitution again to avoid any legal challenges, he’d need 60 percent of the Republican-dominated legislature to sign off on it, and then a majority of the electorate, which overwhelmingly voted four years ago to approve the current amendment. It’s a similar arrangement in the other states: A multi-step process, involving either lawmakers or petitioners proposing the new amendment allowing for a state exchange, and then a majority of voters approving it.
No matter how things might change in a post-King universe, that’s a tall order.