Can Obamacare survive success?
More lemons out of lemonade courtesy of Chuck Blahous. Juicy part:
The side effects of the court ruling don’t end there. The health law also contains a “fail safe” provision requiring that total costs of the health exchange credits be limited to 0.504% of GDP per year after 2018. In previous estimates, CBO projected that subsidy percentages would “eventually” be cut by this provision to keep their total costs beneath this cap. But if health exchange participation is to be significantly higher than previously projected, then costs will be also much higher. This would force significant cuts in subsidies to low-income individuals starting in 2019; the text of the law is explicit that the cap will be enforced by reducing these subsidies. Lawmakers would thus have to choose between allowing these cuts to low-income individuals to go into effect, and waiving the existing fiscal constraints of the health care law.
Much attention has been given to the argument that without the individual purchase mandate, other parts of the health care law would become unworkable. Much less attention has been given to the fact that without the states forced to be on board with the Medicaid expansion, the law’s health exchange subsidies might be fiscally unworkable. The Supreme Court may have just set in motion of chain of events that could lead to the law’s being found as busting the budget, even under the highly favorable scoring methods used last time around.
Lots of good analysis over there. Wooden Nickel to Hot Air.