The dueling realities that have shaped years of Washington battles over the Affordable Care Act were much in evidence Tuesday as the U.S. Supreme Court prepared to determine the future of the controversial law.
In one world was the administration, including the president, saying no need to worry about the Supreme Court deciding the King v. Burwell case in a way that would essentially gut the ACA. In the other world stood Republicans putting forth plans for what could happen if the court does just that.
HHS Secretary Sylvia Mathews Burwell made no mention of the case that could cripple the Affordable Care Act during an address Tuesday morning to hospital executives in Washington. Instead, Burwell focused on the coverage achievements of the federal healthcare law and the need for more states to move forward with Medicaid expansion.
Burwell addressed the Federation of American Hospitals one day before the court will hear oral arguments in King v. Burwell, which challenges the validity of insurance subsidies in 34 states that have not established their own exchanges. If the plaintiffs prevail in the case, it could wreck the insurance markets in those states since nearly 90% of HealthCare.gov customers during the first two years of operations qualified for subsides.
Burwell has repeatedly stated that the Obama administration has no fallback plan if the justices strike down subsidies, an assertion that was repeated by the president in an interview this week with Reuters. “If they rule against us, we'll have to take a look at what our options are,” Obama said. “But I'm not going to anticipate that. I'm not going to anticipate bad law.”
By contrast, Republicans have tried to reassure the public in recent days that they are prepared to take action to minimize the negative ramifications if subsidies for millions of Americans are invalidated. Reps. Paul Ryan (R-Wis.), chair of the Ways and Means Committee, Fred Upton (R-Mich.), chair of the Energy and Commerce Committee, and John Kline (R-Minn.), chair of the Education and the Workforce Committee, published an op-ed piece Tuesday in the Wall Street Journal calling for an “off-ramp out of Obamacare” for those low- and middle-income Americans who would lose access to financial assistance.
Their blueprint includes a tax credit to help individuals who don't get insurance through their employer to help pay for coverage, although it offers few details about how generous those subsidies would be. In addition, the GOP House members call for eliminating the minimum coverage requirements of the ACA, allowing insurance plans to be sold across states lines and restricting medical malpractice lawsuits. Their plan would also embrace popular aspects of the federal healthcare law: allowing young adults to stay on their parents plans until age 26 and prohibiting lifetime caps on benefits.
On Monday, three key Republican senators offered a similar assurance in the Washington Post about the willingness of Congress to take action if subsidies are eliminated in 34 states. They promised that there would be a “transitional period” in which residents of those states would continue to receive financial assistance. But the senators offered few details beyond that pledge.
Analysts at Sterne Agee seized on that as evidence that Republicans might be willing to keep the status quo in place for the foreseeable future. “While this may be the initial Republican position, we believe that such a position could easily morph into a transitional period that goes through the 2016 presidential election,” they wrote in a note to investors on Monday. “Then, politically, Republicans would need to show a plan that scored greater insurance coverage uptake than is currently projected by the Congressional Budget Office for the Affordable Care Act.”
But whether Republicans could achieve consensus around any kind of legislative changes that would keep some form of subsidies in place remains a dubious proposition, given that their world seems to have several competing realities of its own. That's particularly true in the House, where Speaker John Boehner has been repeatedly stymied by intransigence on his right flank, most recently over funding for the Department of Homeland Security.
“They're not ready to commit to anything until they absolutely have to, and clearly today isn't the day,” said Joseph Antos, a healthcare policy expert at the conservative American Enterprise Institute, of congressional Republicans. “It will be quite an argument about whether any proposal sort of restores Obamacare to full strength. I think that's going to be the issue.”
Dean Clancy, a conservative healthcare policy analyst who's worked in both the executive branch and on Capitol Hill, says there's about a 25% chance that Republicans will be able to coalesce around a plan of action if the Supreme Court invalidates subsidies. “They're going to be tempted to panic in the wake of a King victory, needlessly in my opinion,” Clancy said. “It will give them a greater opportunity to do what they promised, which is to repeal and replace Obamacare. More likely they will fail to find agreement among themselves about what to do.”
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