Flipping the NFIB results — some speculation

The Atlantic reports on a book review that involved the internal politics of the Supreme Court decision on the ACA in 2012:

She writes that he initially voted with the four other conservatives to strike down the ACA, on the grounds that it went beyond Congress’s power to regulate interstate commerce. Likewise, he initially voted to uphold the ACA’s expansion of Medicaid. But Roberts, who kept the opinion for himself to write, soon developed second thoughts.

Biskupic, who interviewed many of the justices for this book, including her subject, writes that Roberts said he felt “torn between his heart and his head.” He harbored strong views on the limitations of congressional power, but hesitated to interject the Court into the ongoing health-insurance crisis. After trying unsuccessfully to find a middle way with Kennedy, who was “unusually firm” and even “put off” by the courtship, Roberts turned to the Court’s two moderate liberals, Stephen Breyer and Elena Kagan. The threesome negotiated a compromise decision that upheld the ACA’s individual mandate under Congress’s taxing power, while striking down the Medicaid expansion.

Over at Lawyers, Guns and Money, two commentators ask a pair of great questions:

1) What would the exchanges look like without a mandate in 2014?
2) How the hell does Balloon-Juice work?

I’ll try to answer only the easy question — in a counterfactual universe that the major holdings of NFIB were reversed, how would things look?

As a reminder, NFIB held that the individual mandate was constitutional as a taxing power and mandatory Medicaid expansion was unconstitutional because it was too coercive of states and therefore it had to be a voluntary expansion.

What would the ACA look like if the mandate was found to be unconstitutional but fully severed from the rest of the ACA? This is what Congress decided to do in the tax reconciliation bill in 2017 by the way.

The obvious and important point is that the working poor in Texas, Mississippi, Alabama, North Carolina, Georgia, Florida and a few other states would have Medicaid coverage on January 1, 2014. That is probably another two million people who have coverage because of Medicaid expansion and ten to twenty million person years of additional coverage as late expansion states would have gone live on 1/1/14 as well.

Now lets move onto the individual market. NFIB was decided in the summer of 2012 while the rate review process for the 2014 plan year would only have the first submission in the spring of 2013.

I am a firm believer that insurers can and will price for things that they know about if they have enough time to figure out the rules. Insurers would have had at least nine months from the time of the counter-factual NFIB decision to figure out their underlying actuarial assumptions. I think insurers would have had these thoughts:

  • Subsidies (both APTC and CSR) are creating a class of price insensitive buyers
  • The market is going to be smaller than we expected pre-SCOTUS
  • The market is going to be sicker than we expected

I think those are three solid assumptions that any slightly caffeinated actuary would and should make.  And those assumptions can be priced on.  Average morbidity (disease burden) would be estimated upwards while the risk pools would shrink.  This combination could scare off a few smaller and less well capitalized insurers but the big Blues and the major regional players like my former employer (UPMC Health Plan) would still want to get involved in a multi-billion dollar market.

I think that the announced rates in the summer of 2013 would be higher in this counterfactual than they were in reality.  Universal Medicaid expansion would pull out a portion of the sickest cohort from the individual market pool.  At the same time, the lack of a mandate would have been perceived as a repulser of the expected to be low cost healthy folks (overwhelmingly young but not necessarily young) .  These two directional impulses would be in opposition to each other.  I think the lack of a mandate would have dominated the risk pool improvement by universal Medicaid expansion.  This would be most evident in states like California that in this universe expanded Medicaid on Day 1.  It would be attenuated in states like Texas which never had the Medicaid expansion risk pool improvement bonus.

Since counter-factual NFIB would have been decided early enough for insurers to adapt to the new rule set, I think the markets would have formed at a point of lower enrollment and higher premiums in 2014.

42 replies
  1. 1
    Kristine says:

    Come for the pets, stay for the yelling-at-clouds and the wonk stuff. Change the order according to one’s priorities and/or mood.

    It is a very bendy place.

  2. 2
    RoonieRoo says:

    I’m glad you wrote up this thought experiment as it’s been something I have wondered about for some time.

  3. 3
    Ohio Mom says:

    @Kristine: Eh, I suspect Cole isn’t at all surprised, he just makes keeping a blog look easy.

  4. 4
    guachi says:

    Some “both sides” FB friend posted that Obama and Trump were equally arrogant and that both the wall and Obamacare would “be shut down” and “declared failures”.

    When I asked what he based this on, I received no response.

    When pressed on what I based my confidence that Obamacare would “be shut down” and “declared a failure” I pointed to the tandem of Dick Mayhew and David Anderson and all that I’ve learned, like the effects of the removal of the mandate and CSR on Silver Plans on the Exchanges. That drew blank stares.

    What makes BJ work? The pet posts are what I share with my wife, the wonk posts are what I use to bludgeon idiotic conservatives with.

    Heck, basically any post here will inform you faster on wingnut talking points than conservatives themselves are informed. So you can already have your counterargument, should such a thing arise.

  5. 5
    Barbara says:

    Someone who sees expanding access to health care for millions of their fellow citizens as the equivalent of building a wall that won’t even accomplish its stated purpose of border security is an idiot. This is why I don’t do FB. I might actually have said that in reply and end up with fewer friends than I started out with, which isn’t many.

  6. 6

    Hmm, the decision he was leaning towards originally has more internal logic than the one we ended up with tbh. (IANAL of course, but it’s been apparent for a while that SCOTUS decisions like this aren’t based on lawyerly concerns.)

    As for how we end up with talent like you, I’ve no idea, but I’m very grateful.

  7. 7
    kindness says:

    They’re just jealous of John. I do read LG&M, but there isn’t a ton of actual discussion on topics there. You kinda have to mostly agree and then quibble about minor points. So I lurk there rather than say anything.

  8. 8
    Blue Galangal says:

    Hey! There are more animals than “sometimes”!

  9. 9
    rikyrah says:

    Thanks for posting this.

    BJ attracts top tier talent because:
    1. We appreciate it
    2. We are willing to learn and ask questions

    You have been such a blessing here, Mayhew. Thanks so much for all you do.

  10. 10
    tobie says:

    I think one of the things that allows for real conversations to emerge around the front-page posts and in the comment threads on BJ is that all comments appear in the order submitted instead of being attached to a single submission as a response. All comments end up being part of the blog conversation instead of a tete-a-tete between two or three readers.

    David, thanks for the tip about the Atlantic article on the Supreme Court’s ACA reading. I still get The Atlantic in the mail and hope this article will be in the print edition!

  11. 11

    What I get from this story is that Roberts really, really wants someone else to take the blame for decisions and hates being the swing vote.

  12. 12
    tobie says:

    @tobie: Oops—ruling not reading. I obviously need more coffee in the system.

  13. 13

    @Frankensteinbeck: This is perhaps what people mean when they say he is “concerned with his legacy.”

  14. 14
    The Midnight Lurker says:

    Stands and yells: I’m John Cole!

  15. 15
    Central Planning says:

    @The Midnight Lurker: I’m John Cole!

    But really, how does Balloon Juice work? Nobody fucking knows.

  16. 16
    The Moar You Know says:

    How the hell does Balloon-Juice work?

    No comment ratings, no threaded comments. That is seriously what makes it work.

  17. 17
    Mary G says:

    I think that Roberts negotiating is a terrible thing to find out. That’s not how courts are supposed to work and a repudiation of his “there are no Republican judges or Democratic judges,” and completely degenerates the public trust in the court.

    And John gets and retains talented writers because of the brilliant readers and commenters, of course. Plus animals, music, and gardening.

  18. 18
    thylacine says:

    Hang on a minute. I’m not sure about your assumption on the remedy, that it would have simply severed the mandate.

  19. 19
    khead says:

    Murc should post here. And check out my cats. Also, it’s funny as hell seeing folks at LGM talking about the comments at other blogs being toxic.

  20. 20
    Amir Khalid says:

    @Mary G:

    his “there are no Republican judges or Democratic judges,”

    How seriously did you take this at the time? Roberts was a partisan appointee from the get-go.

  21. 21
    rikyrah says:

    @Amir Khalid:

    How seriously did you take this at the time? Roberts was a partisan appointee from the get-go.

    Just like ‘ there is no more racism’. so I can go ahead and gut the Voting Rights Act that I spent nearly all my professional life trying to destroy.

  22. 22
    John Cole says:

    I resemble that remark.

  23. 23
    burnspbesq says:

    Murc’s a fine one to talk.

  24. 24
    Salty Sam says:

    @Central Planning:

    how does Balloon Juice work?

    Ya call THIS work?

  25. 25
    ruemara says:

    I’ve always felt the case was part of the attempt to undermine the commerce clause, because they could never explain how it was an overreach to regulate the market. And I despise Roberts.

  26. 26

    @thylacine: Yeah, I have to make that assumption as otherwise there is no individual market changes if the rest of Title 1 goes

  27. 27
    msdc says:

    Great post. This makes a lot of sense. Thanks, David!

  28. 28
    AlienRadio says:

    Also this blog has a long and storied history of front pagers trolling the commentariate, either unintentionally/cluelessly (John’s efforts to find a reasonable centrist/conservative front pager that wasn’t a disingenuous lightweight or angling for a gig at Slate), Or with malice aforethought – DougJ (one of the most Masterful trolls I’ve ever seen). The commentariat has to an extent been forged in a Troll rich environment, which will have honed their ability to spot bullshit arguments. I come for the Wonks, but I miss DougJ pantsing the media on a regular basis.

  29. 29
    ruemara says:

    @AlienRadio: To be fair, the media have dispensed with pants & are now in full on ass showing mode.

  30. 30
    comrade scotts agenda of rage says:


    Me and DougJ did that with the moranic WaPo reporters “back in the day”. I spent most of my effort trying to spot one of his questions.

    The worst was Lois Romano, who I see still lives and breathes. She needed to be tossed into a tumbrel. But man was she easy to bait in her old chats.

    Of course she was a Villager tool, one of the worst examples, and followed another tumbrel candidate, Jim Phucking Vandehei, to Politico.

    Ack, I just looked her up on Wikipedia. There is no justice in this world. She’s now a “strategic advisor to the Institute of Politics at Harvard University”. Failing upward. Sigh.

  31. 31
    Yutsano says:


    are now in full on ass showing mode

    Is that what that smell is?

    And completely agreed that you’re a treasure David. And so is this top 10,000 tier blog!

  32. 32
    Villago Delenda Est says:

    @ruemara: The constant competition between Chuckles the Toddler and Chris Cillizza to be the most obnoxious David Broder wannabe is at least somewhat amusing.

  33. 33
    AlienRadio says:

    @comrade scotts agenda of rage: If it weren’t for the timezone difference, and the not being american (knowing the culture intimately is vital in trolling, I don’t think I would have “passed”) I would have enjoyed playing in those wapo chats.

    eta. now that I think about it I might have had a shot on one occasion, but wasn’t able to forge an appropriate hook.

  34. 34
    patrick II says:

    I find it most interesting that the market doesn’t create the pricing, but the perception of what the market will be ahead of time creates the pricing which in turn creates the market which makes the projections true.

    A different twist on cause and effect than most of us expect.

  35. 35

    Our sole revenue stream just suddenly dried up and we’re looking at having to flee our apartment with nowhere else to go and living out of our van. The details are here, unvarnished and without exaggeration. And we desperately need help more than you know.

  36. 36
    Brachiator says:

    @Amir Khalid:

    his “there are no Republican judges or Democratic judges,”

    How seriously did you take this at the time? Roberts was a partisan appointee from the get-go.

    Aren’t all Supreme Court appointments partisan to some degree? The great surprise comes when a justice declares independence from a narrow partisan perspective and rules, not “objectively,” but with an understanding of larger issues than adherence to ideology. My personal hero Justice David Souter is a fine example of this.

  37. 37
    Ian G. says:

    I might be Charlie Brown about to kick the football for saying this, but I get the feeling that Roberts is going to be a critical swing vote against Shitgibbon in some upcoming cases on just how much unilateral power the presidency has. I think Roberts despises Shitgibbon, and of this article is correct, it sounds like he’s open to arguments from the liberal wing.

  38. 38
    patrick II says:

    The Roberts deal is not a surprise to many (if not most) people. I have heard it discussed, or rather read about it in comment sections, before. It made little sense for Breyer and Kagan, given their history, to vote to limit Medicaid except as part of a broader deal to save as much as ACA as they could. It is sad that it was necessary to vote outside of the rules of how jurisprudence is supposed to work, but given what they are up against, four people who abuse their jurisprudential auspices to support anti-democratic principles, I think Breyer and Kagan made an awful, legally corrupting, but necessary deal.

  39. 39
    Alternative Fax, a hip hop artist from Idaho says:

    @David Anderson
    You are a treasure, but you’ll always be Mayhew to me.

  40. 40
    henqiguai says:

    @Mary G (#17):

    Plus animals, music, and gardening.

    Yeah, well, there used to be alcohol, too! What happened to that?!? And music, but overall y’all got crappy taste in music.

    And thank goodness ‘Name’ and ’email’ are still not sticky.

  41. 41
    artem1s says:

    it sounds like he’s open to arguments from the liberal wing.

    I think it sounds like he is recognizing that he’s going to end up being more reviled than Roger Taney if he doesn’t start doing some spin quickly. Until he stops cherry-picking which amendments he’s going to apply Originalism to, he can shove his magnanimous attitude and STHU about negotiating my civil rights away.

  42. 42
    Seanly says:

    Wait, is that implying that, other than John, the talent at Balloon Juice is top-tier? Or was that a compliment at the fine, fine people commenting here? I thought most of the talent here was about the same as John – regular folks with something good to say. Not to say that they aren’t top-tier – maybe they’re so good I don’t realize how good we have it?

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