Two imminent Supreme Court decisions will be rendered in June, one that will affect some Californians significantly and another that is expected to affect at least 34 states, but not California. The Court’s decision in Obergefell vs. Hodges, which will decide if same-sex marriage must be legalized in all fifty states, will affect gay couples in California, including Placentia residents Matthew Mansell and John “Johno” Espejo, who live with their two adopted children and joined the case as two of the 30 plaintiffs.
Obergefell v. Hodges will answer two questions: whether the Constitution can prohibit states from distinguishing between gay and straight couples for purposes of marriage, and if the Constitution does not force states to give marriage licenses to same-sex couples, does it force every state to honor same-sex marriages recognized in other states?
Mansell and Espejo married in California in 2008 after the California Supreme Court legalized gay marriage, then moved in May 2012 to Franklin, Tennessee. In their petition to the Court, Mansell and Espejo claim they were denied “the protections, obligations, benefits, and security” that Tennessee guarantees to other married couples, according to the Los Angeles Times. Abby Rubenfeld, one of the gay couple’s attorneys, stated, “They could have been great citizens here forever. And instead, at least in part — in big part, because of this whole marriage thing — they ended up leaving and moving back.”
Roughly 18,000 gay couples wed in 2008 in California before Proposition 8, which banned same-sex marriage, was passed by the voters in November 2008. After the end-run around the law by same-sex proponents that elicited the overturn of voters’ wishes by the U.S. Supreme Court in 2013, California once again legalized same-sex marriage.
The other major Court decision, King v. Burwell, will affect other states much more decidedly than California, according to KQED. The case will decide whether consumers who buy health insurance through a federally run exchange are eligible for a subsidy. Because California runs its own independent state exchange, Californians will not lose their subsidies, as opposed to roughly 6 million consumers in the 34 states that use Healthcare.gov, according to the Kaiser Family Foundation.
Larry Levitt of the Kaiser Family Foundation told KQED, “Chaos could erupt in insurance markets in other states, but California would be an island. The direct effects for California are zero.”
If the Court rules that consumers using Healthcare.gov cannot receive subsidies, insurers would lose millions of consumers, which would leave them short of funds to pay for the costs of those whom they still insure, forcing the insurance companies to raise premiums or even leave the states altogether, an eventuality nicknamed the “death spiral.”
Joel Ario, a former insurance commissioner in Pennsylvania and Oregon, was less sanguine than Levitt about the prospects for California should the Court invalidate the subsidies. He told KQED that although every state has its own risk pool, and California would seemingly avoid the “death spiral” of other states’ risk pools, “Anytime you have a major catastrophe, like a hurricane in Florida or the Burwell case, it does affect the strength of the insurance market overall. The weaker an insurer is, the less likely they will be competitive.”
Ario added that large national insurers who left the 34 states affected by the Court’s decision might leave the individual market in the other states with their own exchanges or possibly eschew joining the competitive market in other states. Levitt disagreed, saying, “California is such a big state. Not one insurer will walk away from this market based on what’s going on in different parts of the country. They’re not going anywhere.”
Yet if the GOP, which controls Congress, fights successfully to bar the individual mandate that requires all people to have insurance, Ario pointed out, “That would have an effect on the insurance market, including California. But I don’t think any of those [bills] will pass.”