If the Supreme Court rules against the Obama administration in the latest legal challenge to Obamacare, a group of Republicans say they have a plan to prevent millions from losing their subsidized health care coverage.
The stakes are high in the high-profile case of King v. Burwell, which centers on whether people living in the 34 states that didn’t set up their own Obamacare exchanges should legally be able to receive government subsidies for their insurance plans.
The plaintiffs in the case claim that the law’s language only allows for subsidies to people who enroll through state exchanges, not the federal HealthCare.gov site. The administration, however, says everyone who fits the income eligibility requirements should be eligible for subsidies, regardless of which exchange they used.
If the court sides with the plaintiffs, more than 8 million people could lose their subsidies, potentially sending premium payments rocketing higher and unraveling the entire health care law.
The Obama administration said last week that it does not have a back up plan if this happens, leaving a solution up to Congress, which could amend the law, or states, which could still set up their own exchanges.
Republican lawmakers have acknowledged that they will likely have to do something or risk getting blamed if the insurance marketplace devolves into a chaotic mess. A handful of Republicans have vowed to come up with a contingency plan, with many eying a ruling against the administration as an opportunity to get rid of the president’s health care law once and for all. Republicans have floated a number of ways to replace the health care law, though there is still no consensus on how to move forward.
The latest suggestion comes from an op-ed published in The Washington Post on Sunday night. Republican Sens. Orin Hatch of Utah, Lamar Alexander of Tennessee and John Barrasso of Wyoming described a plan they called “a bridge away from Obamacare.” Their proposal would provide temporary financial assistance to enrollees in the states on the federal exchange, buying time for Republicans in Congress to come up with a more fleshed out alternative to the president’s health care law.
The details of the senators’ proposal remain vague, but they wrote that it would give states more “freedom and flexibility” to create health insurance markets that offer more options that are tailored to their states’ needs.
“Republicans understand that what works in Utah is different from what works in Tennessee or Wyoming. We want to give states the time and flexibility to design health-care systems that work for them, not for the bureaucrats in Washington,” the senators wrote.
The plan they described sounded very similar to Obamacare’s state exchanges. For those marketplaces, the federal government gave states a certain amount of funding and then let them create exchanges that were more tailored to their specific demands. However, at least 34 states, mostly those controlled by Republican governors, opted not to set up their own exchanges, relying instead on the federal site.
Whether this new plan would actually get anywhere in Congress is unclear. A majority of Americans say they would rather have lawmakers fix Obamacare than repeal it, and most Republican voters support restoring subsidies if the court strikes them down. Even so, the first two months of the 114th Congress have some, even on the Right, questioning whether the Republican majority can hold together to pass needed legislation.
As Avik Roy noted in Forbes, “In light of Republicans’ recent problems passing basic legislation, such as funding the Department of Homeland Security, agreeing on a detailed contingency plan is tough sledding.”
Roy says that the GOP is now divided into two camps. One group would never approve continuing Obamacare’s subsidies, as it would be seeing as helping the law. The other group, which includes the senators that proposed the plan, views a GOP bill to restore the subsidies as a path to finally replacing Obama’s law.
The Supreme Court’s decision isn’t expected until June. Until then, no one knows if a contingency plan will even be needed.
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