This coercion is an unconstitutional violation of state sovereignty, so the Court struck down part of Obamacare’s massive Medicaid expansion. The four justices against the individual mandate would have invalidated this entire expansion. While Chief Justice Roberts wouldn’t go that far, he was willing to strike down the provision authorizing stripping all Medicaid funds. So now states can refuse to expand Medicaid by foregoing the additional funding.
So first, states must reject the Medicaid expansion. This will leave millions of people subject to the individual mandate unable to get coverage from this government entitlement. Many of those people are exempt from the penalty (tax?) anyway, but others are not. Those people vote heavily Democratic, and they’ll surely demand the mandate be amended to exempt them.
Second, states must refuse to create state-based exchanges, which provide heavily-subsidized insurance policies to middle-income Americans not provided healthcare by employers. Because it would violate the Tenth Amendment’s anti-commandeering principle to require states to create or run the exchanges, if a state doesn’t do it, HHS will directly create and run it.
But there are no tax subsidies if HHS runs an exchange, so there is no incentive for people to flock to the exchanges; they’d pay full price. While many high-risk individuals would do so, it would still be vastly more expensive. Many will instead choose to pay the penalty (tax?) for violating the individual mandate.