Friday, December 12, 2025
Thursday, December 11, 2025
Obamacare Should No Longer be SCOTUScare
Now that Republicans are considering broader reforms to the ACA tax subsidies, they should use the opportunity to bring Obamacare into compliance with the rule of law and retire “SCOTUScare” for good.
Congressional Republicans are to reform Obamacare by steering tax credits to high-deductible plans with health savings accounts purchased on federal and state exchanges. While they’re at it, they should make the use of tax credits on the federal health-insurance exchange legal in the first place. of consumers who have insurance today through an Obamacare marketplace used tax credits to purchase insurance on the federal exchange, HealthCare.gov, even as the text of the law limits these subsidies to policies purchased “through an Exchange.”
The Supreme Court addressed this issue in King v. Burwell (2015). By a 6-3 vote, the justices stretched the Affordable Care Act (ACA)’s language reserving the use of tax credits to exchanges established “by the State” to permit subsidies on exchanges set up by the states or the federal government. Americans’ health insurance shouldn’t rest on a dubious ruling.
To quote Justice Scalia’s opinion: “Words no longer have meaning if an Exchange that is not established by a State is ‘established by the State.’” Defenders of the ACA claimed that the restriction on tax credits was merely a “.” If that were the case, Congress would have been remarkably targeted in its typos. The ACA refers to exchanges “established by the State” in seven separate places. Rewriting this term to encompass federal exchanges across the ACA, as the dissent pointed out, “makes nonsense” of these other provisions. The majority opinion as much when it clarified that its interpretation of “State” to mean “ State and Federal” applied only to the ACA’s tax credit provision and not to the other parts of the law. Considering this and other “somersaults of statutory interpretation,” Justice Scalia jested that the law should be renamed “SCOTUScare.”
Predictably, mainstream media regaled Chief Justice Roberts, the author of the majority opinion in King, with full Profiles in Courage treatment. “The Supreme Court Saves Obamacare, Again,” the New York Times. “Federal subsidies survive. A crisis of government has been averted,” New York Magazine. “John Roberts,” Harvard Law professor Laurence Tribe, “handed the people . . . a resounding victory.”
Nonsense. The ACA encouraged the formation of state exchanges by providing enrollees on these marketplaces with tax subsidies. People in states without exchanges would have to shop for insurance without subsidies on the federal exchange. The justices in King didn’t save Obamacare. They saved red states from having to choose between establishing state exchanges or turning blue.
Take Florida and Texas, both of which have declined to establish state exchanges. At the time of the King decision, around people in Florida had signed up for subsidized policies through the federal marketplace, almost twice as many as the number of votes who provided then-Senator Marco Rubio’s victory margin in his 2016 re-election and 40 times as many as the roughly 32,000 voters who made up Ron DeSantis’s razor thin gubernatorial victory in 2018.
In the Lone Star State, Beto O’Rourke came within roughly 200,000 votes of unseating Ted Cruz in an unexpectedly tight 2018 Senate race. At the time, over were insured through the federal exchange, with 86 percent of these enrollees receiving federal subsidies. Does anyone think that voters wouldn’t have punished Republican candidates in states that continued to hold out?
Even with the Supreme Court’s embrace of textualism with the addition of three Trump appointees, it’s unlikely that the justices will revisit King. The Supreme Court applies a when overturning past decisions interpreting Acts of Congress, such as the ACA, than when construing constitutional text. Whereas correcting wrongly decided constitutional cases requires a herculean effort in the form of a constitutional amendment, critics of the justices’ statutory interpretations, as Justice Kagan remarked in Kimbel v. Marvel Entertainment (2015), “can take their objections across the street, and Congress can correct any mistake it sees.”
Whatever one makes of the Supreme Court’s “why bother” attitude to its prior statutory rulings, Republican leaders in Congress should accept the invitation to provide a legal fix here. Democratic lawmakers could have authorized subsidies for use on HealthCare.gov when they expanded the Premium Tax Credits to cover upper-income earners in 2021 and extended these extra subsidies in 2022, but they failed to address the statutory gap both times. Now that Republicans are considering broader reforms to the ACA tax subsidies, they should use the opportunity to bring Obamacare into compliance with the rule of law and retire “SCOTUScare” for good.
Michael Toth is the Director of Research at the Civitas Institute at the University of Texas at Austin.
https://www.civitasinstitute.org/research/obamacare-should-no-longer-be-scotuscare
Improve the Crapo-Cassidy Health Savings Account Proposal
Congressional Republicans have struggled for weeks to counter the Democratic push for an extension beyond 2025 of enhanced Affordable Care Act (ACA) premium subsidies. They should consider the plan developed by Senators Mike Crapo and Bill Cassidy as a potential starting point for an alternative they would be comfortable presenting to voters.
Republicans have known for months that the coming December 31 expiration of the enhanced premium credits was a flashpoint that required a response, and yet the party’s internal divisions led to procrastination. Now party leaders are scrambling to come up with an answer.
Predictably, Democrats have been less reticent and mostly see what is unfolding as a potential opening they can exploit. In the Senate, they have lined up behind a plan calling for a straight three-year extension and a rollback some of the tightened credit eligibility rules approved in the GOP’s recent reconciliation measure. The Committee for Responsible Federal Budget (CRFB) estimates the plan would add almost $300 billion to projected federal budget deficits in the coming years. Senate Republicans will use its costs as one reason to oppose it.
The GOP struggles on health care in part because it has not found a way to encourage insurance enrollment without expanding federal entitlements. For decades, Democrats have pursued a strategy of incremental liberalization, which voters have mostly applauded.
The Crapo-Cassidy plan offers a workaround of sorts for the GOP by endorsing subsidies for Health Savings Accounts (HSAs) owned by individuals in lieu of premium credits sent to insurers. The catch is that potential recipients of the HSA support must be enrolled in either bronze or catastrophic level insurance plans offered on the ACA exchanges, both of which come with high deductibles. In other words, the Crapo-Cassidy plan would incentivize take-up of ACA coverage by offering cash HSA support to enrollees in plans the GOP finds preferable to the other tiers offered on the exchanges (including gold and silver). Eligible individuals who decline to enroll in high-deductible coverage would be walking away from substantial direct cash support from the government.
The Democrats are sure to oppose this approach on the grounds that the value of the HSA credits will fall well short of the annual deductibles. In the Crapo-Cassidy outline, eligible individuals age 18 to 49 with incomes below 700 percent of the federal poverty line would get $1,000 annually in 2026 and 2027, while those age 60 to 64 would get $1,500. Those amounts are far less than the $7,500 average deductible for bronze coverage in 2026 or the $10,600 required by the ACA’s catastrophic insurance plans. This credit-deductible gap is certain to doom the idea with most Democrats and may scare off some Republicans, too.
But that does not mean the concept is meritless. The Crapo-Cassidy plan is worth exploring and developing further because it would provide a pathway to incentivizing insurance enrollment without fully embracing the ACA model. The GOP should consider how to combine the Crapo-Cassidy idea with somewhat lower deductible plans.
The scheme would be strengthened further if the GOP combined it with stronger incentives for lower pricing of common services, which HSAs to date have not induced on their own. Republicans should help HSA owners find lower-priced care options by pushing for three additional and interrelated legislative provisions.
First, Congress should direct the Centers for Medicare and Medicaid Services (CMS) to refine its list of “shoppable services,” which was developed as part of the agency’s price transparency rules, with standard clinical definitions. For instance, for common surgeries, CMS should specify what services should be included in “all in” prices for these episodes of care. Similar standardization should cover primary care services offered through monthly fee arrangements (called “direct primary care”).
Second, Congress should require hospitals, doctors, and other providers of these “shoppable services” to post cash prices for any of the specified services they plan to offer patients. All Americans would have the right to pay these cash prices when accessing care.
Third, Congress should require insurance plans to make available to their enrollees the cash value of what would be paid for the shoppable services if offered by an in-network provider. The plan enrollees could then use the insurance payments to offset what is being charged by the providers they select. This requirement should apply even after enrollees have fully satisfied their deductibles.
With these changes, HSA enrollees could easily compare prices charged by competing providers and cut their costs by finding those offering the highest value for what is being charged.
None of these changes will be easy to get through Congress, but Republicans are finding passivity has political costs too. The Crapo-Cassidy plan is intriguing because it expands the playing field in a way that is more favorable to Republican objectives.
James C. Capretta is Senior Fellow and Milton Friedman Chair at American Enterprise Institute