Supreme Court Will Make Shock Waves No Matter How It Rules on Same-Sex Marriage and Obamacare Subsidies

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No matter which way it decides, the U.S. Supreme Court will send cultural and political shockwaves across the country when it issues two rulings to finish its current term by the end of June—with the possibility that one could come as early as today, June 22.

These cases are over same-sex marriage, and many legal observers expect the Court to legalize these marriages citing several constitutional principles of equality under the law. The other case is over government subsidies to some 9.6 million people who are buying their health insurance through federal Obamacare exchanges, not state markets. (A third case, not gathering as much national attention, concerns whether the drugs used by states to execute prisoners violate the ban on cruel and unusual punishment.) 

If the Court legalizes same-sex marriage as many legal observers suspect it will, there will be an immediate backlash from religious conservatives, not just from lawmakers and court administrators in red states such as Kansas and Mississippi, who already have said they intend to ignore that ruling. But the immediate reaction will also echo on the 2016 presidential trail, where Republicans like Sen. Ted Cruz, R-TX who are vowing to ignore it are now calling for a constitutional amendment to outlaw the LGBT unions.

While the latter prospect is pure rhetoric from Cruz, the way the Court articulates equality rights in marriage could either make it easier or harder for LGBT advocates to challenge other areas of law where LGBT discrimination is allowed to persist. That’s because in many states, current law doesn’t recognize anti-LGBT biases as a form of discrimination requiring a legal response. By turning that blind eye, those states can pretend there is no problem and face no legal obligation when discrimination arises. 

The Court could go big, as it were, and make it easier to sweep aside all barriers to same-sex equality. Or it could make it harder to challenge and get rid of other areas of state law that treat LGBT couples unequally, such as in birth certificates, medical decisions, inheritance, etc. When Chief Justice John Roberts wrote the ruling upholding Obamacare, he allowed red states to opt out of its expansion of Medicaid, which covers the poor. Legal scholars have pondered whether there will be a similar bifurcation if the Court upholds same-sex marriage. That is, if it grants that right but leaves a complex legal landscape in place that could take many years of litigation for LGBT activists to overturn.

In other words, no matter what the Court decides on same-sex marriage, there are going to be people on both sides of the issue who will be shocked, alarmed or very frustrated.

Obamacare Subsidies

The consequences for granting victory to the Republican-led effort to block Obamacare subsidies in red states where some 9.6 million residents are now buying health insurance through federal online marketplaces could be also be extremely disruptive, from both political and economic standpoints. Numerous policy organizations—such as the Rand Corp., Urban Institute, Robert Wood Johnson Foundation,  and the Kaiser Family Foundation—have all studied what is likely to transpire if the Court blocks federal subsidies to the residents of 34 states that refused to set up state-based insurance exchanges.

The Republican lawsuits challanging Obamacare literally turn on what essentially is a drafting error in the 1,000-plus-page bill. The insurance subsidies are to be “established by the state,” the Affordable Care Act reads, which has prompted Obamacare enemies in the GOP to argue that the Court should simply instruct Congress to restate what it wants. That prospect, of course, ignores the overwhelming intent of the law and pretends the GOP-controlled House and Senate would do just that—not gut the law.

If the GOP prevails, health analysts say a double-penalty would ensue. Premium prices would surge for 9.6 million people because the subsidies would vanish. They now average about $268 per month per person, covering 72 percent of premium costs, Kaiser said. That would likely cause millions of people to drop their coverage, and the insurance industry would then have to raise premiums for everyone else because healthcare costs would be spread across a shrinking market. Various independent estimates all say that 8 million people would become newly uninsured.

“We will see a huge spike in premiums because younger and healthier people are the ones most likely not to” continue coverage, Families USA’s Ron Pollack told the Christian Science Monitor. “The insurance pools will be disproportionately filled by sicker and older people. We will see what many refer to as a death spiral.”      

Premiums for people with health insurance could jump anywhere from 35 percent to 47 percent, according to various estimates from the Urban Institute, Robert Wood Johnson Foundation and Rand. The hardest hit would be households down the economic ladder, where lower incomes mean that their premiums could multiply many times over.

Needless to say, the vast majority of the states where residents have bought insurance via federal exchange are red, with Republican governors and legislatures. Texas, Florida, Georgia, Michigan and North Carolina are prime examples.

While it remains to be seen how the Supreme Court will rule and what that ruling will say, other variables include how long the subsidies will remain—would they immediately be voided or over a period of time? And how will the GOP-controlled Congress respond, as there’s been talk of extending the subsidies until after the 2016 presidential election.

If the Court sustains the federal subsidies, that becomes less of an economic crisis and more of a political one for Republicans, whose national leaders and leading presidential candidates have all pledged to repeal Obamacare. Where that debate goes is anybody’s guess, but at least it doesn’t add millions of people to the ranks of the uninsured.        

Steven Rosenfeld covers national political issues for AlterNet, including America’s retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of “Count My Vote: A Citizen’s Guide to Voting” (AlterNet Books, 2008).

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