When the Supreme Court ruled on Obamacare, it said two things: First, that the individual mandate is constitutional under the federal government’s taxing power. Second, that the government couldn’t withhold all Medicaid funding from states that refused to participate in the law’s proposed expansion of the program.
The first thing the Court said has gotten most of the attention, perhaps because it has the media’s favorite thing: Potentially exciting political implications! After the Court called the mandate a tax, Republicans everywhere began calling the law “the biggest tax increase in history,” which, while not true, is the sort of thing that gets covered in an election year.
But whether we call the mandate a “tax” or a “penalty” has no implications for the law, and it’s hard to believe it will make a difference in the election, either. The individual mandate has always been unpopular, Republicans have been (correctly) saying the Affordable Care Act raises taxes since the day it passed, and at this point, people pretty much feel however they’re going to feel about the law. One more shouting match over semantics isn’t going to make the difference.
Rather, it’s the second thing the Court said that actually matters for the law, and for real people, going forward. If states choose to sit the Medicaid expansion out, millions of people who would have been covered under the Medicaid expansion will remain uninsured. The law does not have provisions for extending subsidies to Americans making less than the poverty line, so someone making $9,000 a year in a state that refuses to participate in the Medicaid expansion might not get any help at all.
To get a sense of the numbers involved here, in Florida, Gov. Rick Scott has said he won’t participate in the Medicaid expansion. If he follows through on that threat, 950,000 Floridians who would have been covered by the law won’t be.
For reasons I go into in my column today, I’m quite certain that most or all states will end up participating in the Medicaid expansion. It’s just too good of a deal for them to refuse. But it’s not impossible to imagine a couple states run by ambitious Republican governors taking a few years to enter the system. And that, much more than whether we call the mandate a “penalty” or a “tax,” could matter.