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WSJ Overhypes Story of ‘Scrambling’ over Health Exchange Uncertainty

At first glance, I thought my informal bet [1]—that a red-state governor will soon claim he stood up to the Obama administration over the formation of health exchanges, despite knowing full well that his or her constituents wouldn’t be eligible for tax subsidies—had died a quick death.

According to a report [2] in the Wall Street Journal:

A number of states are scrambling to show that they—not the federal government—are or will soon be operating their insurance exchanges under the 2010 health law, in light of two court decisions this week.

The efforts are aimed at ensuring that millions of consumers who get insurance through the exchanges would be able to retain their federal tax credits if courts ultimately rule against the Obama administration.

The rest of the story, however, doesn’t bear out this picture of “scrambling.” It’s true that a few of the states mentioned—Idaho, Nevada, New Mexico—have Republican governors. And while Arkansas is bona fide red state, it has a Democratic governor. So we’re not talking here about the likes of Rick Perry or Sam Brownback “scrambling” to secure tax credit eligibility on behalf of their states. That’s to be expected. If such governors were willing to forgo expanded Medicaid money, I don’t see why they’d be in a rush to protect health exchange subsidies, either.

There’s a golden political opportunity in the offing, it seems to me. The aforementioned Perry; or Louisiana’s Bobby Jindal; or New Jersey’s Chris Christie; or Ohio’s John Kasich—one or all of these potential presidential contenders could appeal to their party’s base by making a fresh case that they refused federal blackmail. At the very least, they could ensure the Gruber-gate story has legs for weeks to come.

Mind you, I’m not saying I’m prepared to believe them. (One would think the argument would already have been made at some point over the last two years.) But this whole rotten enterprise is an exercise in post hoc opportunism. This is the next logical step.

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#1 Comment By JonF On July 28, 2014 @ 3:47 pm

Re: If such governors were willing to forgo expanded Medicaid money, I don’t see why they’d be in a rush to protect health exchange subsidies, either.

Medicaid is for po’ folks, many of whom do not vote (and skew Democratic when they do). The subsidies go to middle class folks, who likely vote and quite possibly vote for the GOP.

#2 Comment By Clint On July 28, 2014 @ 4:56 pm

Jonathan Gruber,January 2012 Video,
“What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.”


#3 Comment By Victory over Eurasia On July 29, 2014 @ 8:12 am

@Clint (and others seeing Halbig as a gotcha moment) pls read Ezra Klein


#4 Comment By Victory over Eurasia On July 29, 2014 @ 8:24 am

Scott – as a fan of ACA, I really appreciate your recent spate of articles. I know that in your first article you said you were hardly a fan of Obamacare, but I do wonder at what point the fact that the news and results out of the program have been pretty much unremittingly positive will finally penetrate the psyche of the so-called conservatives. Coverage is dramatically up amongst the previously uninsured, and lesser known initiatives in the program seem to be significantly ameliorating cost increases (see today’s article in Vox showing that medicare costs are lower per patient in 2013 vs 2012). If the extremists were held to account for their viciousness in refusing Medicaid expansion, that would again reduce suffering and uncertainty amongst a large part of our poorest.

At what point will these successes finally resonate? Do we have to wait until there is a repub in the WH? Until Obama leaves office?

#5 Comment By Matt On July 29, 2014 @ 12:29 pm

This is an incredibly stupid “scandal” with an easy solution–just amend the bill to fix the offending passage.

#6 Comment By Clint On July 29, 2014 @ 3:19 pm

Actually,there are also other upcoming appeals that could be heard in the Oklahoma 10th and Indiana 7th conservative circuit courts, and the issue may reach the Supreme Court.