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Top Five Misconceptions about King v. Burwell

The King v. Burwell lawsuit has generated a lot of interest, and for good reason. It’s an important case that has broad implications for the future of ObamaCare. But the issue at hand is a complex one, and this has led - both willfully and accidentally - to a lot of bad or misleading reporting. Let’s clear things up, shall we? Here are the top five misconceptions about King v. Burwell.

1. It’s Just a Typo

At issue in the case is whether the plain language of the Affordable Care Act means what it says. What it says is that federal insurance subsidies are available through state-established insurance exchanges. As written, this means that the 34 states that did not establish exchanges are not eligible for the subsidies, which in turn means that they are not bound by the individual and employer mandates.

The administration has argued that this is a drafting error, a typo, and that the original intention of the law should be upheld over what the words actually say. There are two reasons why this is nonsense. First, there’s no way anyone would have written the bill in the way suggested, because that would remove any incentive for states to set up their own exchanges, leaving the task to the federal government. This creates an enormous expense not factored into the original calculations, and renders the entire state exchange portion of the law redundant. No sensible reading of the law could conclude that it was drafted as the administration claims.

The second reason to dismiss the “typo” argument is that administration officials who actually worked on the law flat out admit that the intention was to force states to set up exchanges. It was only after an unexpected rebellion by states that the backtracking occurred.

2. Republicans Want to Take People’s Insurance Away

One of the consistent narratives of King v. Burwell has been that the mean old Republicans want to strip away insurance from poor people just because they hate President Obama. This is untrue. The case is about the rule of law, and preventing the government from acting illegally to serve its own ends. When the IRS allowed subsidies to states that did not establish exchanges, it violated the letter of the law. A ruling for King would not “take away” people’s insurance, because the subsidies were never supposed to be issued in the first place.

Moreover, the case will decide whether it is okay for a regulatory agency - the IRS - to effectively rewrite a law based on its own interpretation of the language. This could set a very dangerous precedent for future cases, if the Court rules in favor of the administration.

3. The Exchanges Are Making Health Care Better

Many of ObamaCare’s defenders have assumed that if the Court rules to maintain the subsidies, everything will just go on as usual and there will be no problem. In fact, ObamaCare exchanges across the country are steadily falling apart. Enrollment numbers are way below projections, premiums are rising, and expenses are vastly outstripping expectations. It’s only a matter of time before states literally can’t afford to continue down the path of ObamaCare. When that happens, it’s going to be much more hurtful than a decision in favor of King now, for which Congress is at least beginning to plan. And speaking of planning...

4. Republicans Have No Plan

Democrats have been gleefully gloating that Republicans have no plan for dealing with a ruling in favor of King. In fact, there are at least three plans offered by Republicans to deal with the potential elimination of the subsidies.

The first, offered by Sen. Ben Sasse of Nebraska, would create a bridge away from ObamaCare, offering COBRA-like insurance policies for an intervening period until a more permanent solution can be found. The second is a more comprehensive replacement plan from Sen. Bill Cassidy, and the third, from Rep. Ron Johnson, would simply extend the subsidies for two years while phasing out other portions of ObamaCare. Stay tuned for an in-depth analysis of these three plans from FreedomWorks Legislative Manager Josh Withrow.

5. The Administration Cares

The conceit underlying the whole ObamaCare debate is that President Obama and his administration are motivated by compassion and just want what’s best for those who can’t afford insurance. While we can never really know what’s in someone’s heart, the administration’s response to the King v. Burwell suit has been anything but compassionate.

Everyone from Health and Human Services Secretary Sylvia Burwell, to IRS Commissioner John Koskinen, to President Obama himself has admitted that they are making no plans to deal with the fallout of the case. Given all the noisemaking about the loss of subsidies, one would think that there would be at least a modicum of concern from the people who crafted and implemented the law in the first place. Sadly, it’s all too clear that politics is trumping good policy here, and Obama cares more about his legacy than the people who elected him.