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March 3, 2015

Supreme Court Challenge Could Incite Obama-Abbott Stand Off Over State Exchange

King Win Would Free Millions of Texans, Businesses From ObamaCare Penalties

DALLAS -- The U.S. Supreme Court will hear the second biggest legal challenge to Obamacare on Wednesday, and a victory for freedom will likely lead to significant political pressure on 37 states to cave to Obamacare pressure.  Texas Governor Greg Abbott will be one of the targeted 37 governors.

“If the Supreme Court decides in favor of King, the pressure will mount on the states that didn't create an exchange to do so, such as Texas,” said Merrill Matthews, Ph.D., resident scholar with the Irving-based Institute for Policy Innovation (IPI). “Gov. Abbott and the Republican legislature will fight that because if the subsidies go away, so does the employer mandate to provide coverage, and that will save Texas employers millions of dollars.”

“A King victory would allow most of the 1.4 million Texans who lose their Obamacare subsidies to be exempted from the penalties imposed on those who don’t have qualified coverage.  They would then be free to acquire much less expensive health insurance that avoids many of Obamacare’s costly mandates,” said Matthews.  Under the law, if a person cannot find qualified coverage for less than 8 percent of their income, including taxpayer-provided subsidies, they are exempted from the coverage mandate. 

“The media are complaining that millions will lose their coverage because they will lose their subsidies.  But millions more Americans are uninsured because they can’t afford Obamacare even with the subsidies.  The vast majority of them would no longer have to pay the uninsured penalty,” said Matthews.

A win for the plaintiffs in King vs. Burwell won’t kill the law, but it would make it largely unworkable in 37 states, including Texas, said Matthews. “The question in King vs. Burwell is whether the government must abide by the plain language of a law it passed concerning federal subsidies for health insurance in states that did not set up a health insurance exchange. Obamacare specifically states that subsidies that help cover the cost of insurance premiums are only available to individuals who enrolled through a state-created exchange.”

“Only 13 states set up their own exchanges,” said Matthews. “The other 37 either didn’t try or failed and so relied on the federal government to do it. The administration has decided to hand out the subsidies to Obamacare enrollees in every state anyway, in complete disregard for the law—hence the legal challenge.” 

"Ironically, Democrats and the White House may claim that Governor Abbott and Republicans are costing millions of people their coverage.  But the implementation of Obamacare also cost millions their coverage, and Democrats didn’t seem to mind that,” said Matthews.


Institute for Policy Innovation (IPI) resident scholar Merrill Matthews, Ph.D. is available for interview by contacting Erin Humiston at (972) 874-5139, or


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