The central premise of King v. Burwell, a lawsuit asking the justices to gut much of the Affordable Care Act and take health insurance away from at least 8 million people, is that a seemingly innocuous choice made by many states actually has devastating consequences for the people in those states. In 2011, however, a leading conservative lobbying group rejected this central premise in a proposed legislative resolution offered to state lawmakers.
The American Legislative Exchange Council (ALEC) is among the most influential conservative advocacy groups in the country. ALEC crafts model legislation that can be introduced by conservative state lawmakers, much of which has gone on to become the law in several states. The “Stand Your Ground” legislation which permits people in many states to shoot others and get away with it, for example, was pushed by ALEC. So are state laws making it harder to vote, keeping workers’ wages low, and blocking paid sick leave for workers.
In October of 2011, ALEC’s board of directors approved a model resolution that state lawmakers could pass, which asserted that “it is not in the best interest of the state for any state official to participate in planning or establishing health insurance exchanges as provided for in the federal Patient Protection and Affordable Care Act.” Significantly, however, the resolution also disagreed with the central premise of King v. Burwell, the lawsuit attacking the Affordable Care Act.
Though the law gives states “flexibility” to decide whether to set up a health exchange where their residents can buy subsidized health plans or to have the federal government set up this exchange for them, the King plaintiffs claim that billions of dollars worth of tax credits intended to help people pay for their insurance are unavailable in states that opted for a federally-run exchange. The ALEC resolution contradicts this claim by the King plaintiffs, as it states that “[t]here is no penalty for a state in allowing the federal government to implement an exchange.”
Notably, the same year that ALEC released this model resolution urging states not to set up their own health exchange and explaining that there is “no penalty” if the federal government sets up such an exchange, they also released a much longer report offering Affordable Care Act-related recommendations to state lawmakers. Among other things, this report highlighted Texas, which at the time was considering “transitioning Medicaid beneficiaries into the exchanges” — essentially, cutting off Medicaid benefits for some individuals and leaving them to find insurance on the exchange in Texas. As Texas is one of many states that opted for a federally-run exchange, however, Texas’s plan to shift Medicaid patients onto the exchanges would have been unworkable unless tax credits were actually available in Texas’s federally-run exchange. Without these tax credits, few former Medicaid beneficiaries would be able to afford insurance.
ALEC is one of a long list of Republican elected officials and conservative advocacy groups that indicated that tax credits are available in all 50 states — or, at least, that indicated that tax credits were universally available before the King litigation gave conservatives an incentive to claim otherwise. Beyond ALEC, this list includes multiple Republican governors, several Republican committee chairs in Congress, and the conservative Heritage Foundation.