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The ACA Did Not Seek To Build One-Legged Stools

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The audio from oral arguments in King v. Burwell that should have been streamed in real time are now up. As Irin Carmon said on Twitter, among other things it’s worth hearing to hear Carvin repeatedly address Justice Sotoma – YEER.

Ezra Klein’s piece on why Carvin’s Moops-invaded-Spain theory is such lunacy is very good. At one point, I think he actually understates the case:

The plaintiffs’ lawyer, Michael Carvin, tries to deny this fact. “There’s not a scintilla of legislative history suggesting that without subsidies, there will be a death spiral,” he told the Court.

But Michael Cannon, one of the architects of the King v. Burwell case, knows better. The reason he was so interested in the lawsuit, he told Vox, was that removing the subsidies would kick out “one of the three legs of Obamacare’s three-legged stool.”

The “three-legged stool” refers to the idea that for an exchange to work, it needs three things: regulations that force insurers to sell to everyone, a mandate that forces even young and healthy people to buy insurance, and subsidies to make that insurance affordable. No subsidies, no affordability. No affordability, no critical mass of young and healthy people. No critical mass of young and healthy people, no way to avoid a death spiral.

That’s what happens when you remove a leg of a three-legged stool: the stool falls over.

And it’s even worse than that — if you eliminate the subsidies, you essentially eliminate the mandate. (There might be a few uninsured people who can get health insurance plans that cost less than 8% of household outcome, but a “mandate” that applies only to a vanishingly small number of people is no better than having no mandate at all. A mandate that covers a tiny number of people, to put it mildly, does not solve the free rider problem.) And even Carvin concedes that without the mandates you’d get a death spiral.

And yet the case is essentially a coin flip at the Supreme Court, which should tell you all you need to know about the nation’s highest tribunal.

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