A group of Republican Senators is getting ready for a game of chicken with the administration if the Supreme Court strikes down Obamacare health care subsidies.
Sen. Ron Johnson (R-WI) and a handful of senators are rallying around a contingency plan if the court rules against the administration in King v. Burwell and eliminates health subsidies for millions of people currently enrolled in the federal exchange, HealthCare.gov, Politico first reported.
The GOP plan would create a patch for the subsidies until 2017, sparing millions from losing health coverage. In exchange, the proposal eliminates two major provisions of Obamacare—the employer mandate and the individual mandate, which, policy experts warn, would cause a crippling ripple effect through the insurance market.
If the Senate plan gains traction, it could force the Obama administration to decide whether to sign a piece of legislation that guts major Obamacare provisions in order to keep millions of people from being denied their subsidized coverage, or reject the proposal and see millions lose coverage.
But the plan is facing some backlash over in the House, where lawmakers see Johnson’s measure as a continuation of Obamacare. Instead, some House GOP members see an adverse court ruling as the most likely way to get rid of Obamacare once and for all.
Republican Study Committee Chairman Bill Flores (R-TX) is expected to introduce his own Obamacare alternative next week. Meanwhile, others like Rep. Tom Price have been working for a replacement to the Affordable Care Act that would issue tax credits instead of the current subsidies in order to assist people buying health coverage.
Meanwhile, House Ways and Means Committee Chairman Paul Ryan (R-WI), along with Rep. Fred Upton (R-MI) and Rep. John Kline (R-MN) have been working since January on an ACA alternative and response in the event of an adverse ruling.
Their working proposal, detailed in The Wall Street Journal in March would provide tax subsidies for people to buy health insurance and would allow states to choose whether or not to participate in the ACA’s requirements and standards. A formal proposal is still in the works.
The court ruling, expected in June, hinges on the law’s language discussing who is eligible to received federally subsidized health coverage. The law provides that people can receive subsidized coverage through an exchange “established by the state.”
The plaintiffs in the case maintain that the wording means that only citizens in states that set up their own exchanges should be eligible for subsidies under the law. There are currently 34 states that did not set up their own exchanges and instead rely on the federal portal, HealthCare.gov.
If the court sides with the plaintiff, Obamacare enrollees in those states using the federal exchange would not be eligible for subsidies—causing the price of their monthly premiums to soar—in many cases to unaffordable levels.
In February, Avalere Health released a study estimating that premiums could jump by 255 percent for federal exchange enrollees getting subsidies if the court rules against the administration.
Both sides agree that such a ruling would upend the insurance market and be devastating for millions of people already receiving federal subsidies. Now the race is on to come up with a contingency plan…just in case.
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