Some GOP Governors Press Congress for ACA Subsidies Backup Plan

A number of Republican governors have begun pressuring Congress to develop a backup plan should the Supreme Court strike down subsidies to help U.S. residents purchase coverage through the federal exchange, The Hill reports (Ferris [1], The Hill, 6/3).

Background

The subsidies are being challenged in King v. Burwell. The high court heard oral arguments in the case in March and will release a decision by the end of June. If the court strikes down the federal exchange subsidies, the ruling would eliminate about $28.8 billion in subsidies to 9.3 million individuals in 34 states in 2016, according to an Urban Institute analysis (California Healthline, 5/19). Meanwhile, CMS data released on Tuesday show that about 6.4 million U.S. residents could lose the subsidies if the high court rules against them (California Healthline, 6/3).

Govs Press Congress for Backup Plan

Florida Gov. Rick Scott (R) on Wednesday said, "I think it has to be a federal fix."

Wisconsin Gov. Scott Walker (R) said the "problem [was] created by this president and the previous Congress," adding that it "requires a solution at the federal level."

In addition to Florida and Wisconsin, officials in other states have also said they would not act to address the issue if the subsidies are ruled illegal, including:

• Louisiana;
• Mississippi;
• Nebraska; and
• South Carolina.

However, White House officials have said there is "no easy fix" for the potential issue, which could cause coverage gaps. Further, White House press secretary Josh Earnest on Wednesday said, "We have not seen much of an appetite from Republicans in Congress to wor[k] constructively to address this question." According to The Hill, GOP lawmakers this week said they would not present a full contingency plan for the subsidies until after the Supreme Court rules in the case (Ferris [1], The Hill, 6/3).

Some Observers Surprised at White House Inaction

Some observers are surprised the Obama administration is not working to create a backup plan, according to CQ News. Ron Pollack, executive director of Families USA, said, "Whatever the administration might be doing in terms of backup planning, they are not talking to the states about it, and groups like us are not privy to it." He added, "The administration ... is confident that it will prevail in court, and it doesn't want to do anything to undermine that possibility."

The lack of a contingency plan places governors in "a tough situation," according to Seema Verma, a consultant who currently advises seven states. She noted, "No one wants to see people lose coverage ... What's ironic is that there's no discussion from the federal government to say, 'Here's our plan.' Especially in the short-term situation, people are going to look to them to outline their plan and they have yet to do that."

Some States Considering Options

According to CQ News, officials in some states have begun looking at ways they could address the potential subsidy losses. For example, some are examining ways they could leverage HealthCare.gov's technology or that used in other state exchanges, like Connecticut's, to establish their own exchanges. In addition, some governors are considering whether they can issue executive orders to declare their states' use of HealthCare.gov or another state's exchange technology as a state-run exchange. Further, some states are looking into establishing a regional exchange that would serve several states (Adams, CQ News, 6/4).

State officials last month secretly met in Chicago to discuss potential actions if the Supreme Court deems that subsidies illegal. Representatives from as many as 17 states were present. Participants discussed ways to respond to a Supreme Court decision against the subsidies. However, many concluded that the majority of their options are unfeasible (Radnofsky/Armour, Wall Street Journal, 6/1).

Pa., Del. Unveil Subsidy Backup Plans

Meanwhile, Pennsylvania Gov. Tom Wolf (D) on Tuesday submitted a plan to HHS to create a state-based exchange to ensure 350,000 state residents can maintain their subsidies, The Hill reports. The state is the first to develop such a contingency plan.

Wolf in a statement said he drafted the plan because he is "committed to protecting hardworking Pennsylvanians from losing the assistance they rely on to purchase health care coverage."

However, Wolf's administration made it clear that the plan does not mean the state will create its own exchange if the high court upholds the subsidies. His office wrote in the release that the plan "is simply another step in an effort to leave the door open so the state has this option in the event of an adverse Supreme Court ruling" (Ferris [2], The Hill, 6/3).

Soon after, Delaware Health Secretary Rita Landgraf said her state also has sent a blueprint to HHS to potentially operate its own exchange. The proposed state-run exchange would rely on federal exchange technology for enrollment. She said, "Although the Obama administration says it doesn't have contingency plans in case the Supreme Court invalidates subsidies in federal-run exchanges, observers say this exchange model could be the most promising way to ensure subsidies continue in those states" that do not currently have their own exchanges (Mershon et al., Politico Pro, 6/4).

Effects of SCOTUS Ruling Upholding the Subsidies

In related news, little attention has been given to the possibility of the Supreme Court ruling to uphold the ACA's subsidies, likely because the ruling would not largely affect federal policy, National Journal reports.

However, a ruling upholding the subsidies would "mean volumes" for the administration because it would "validate" the ACA, according to National Journal. In addition, a ruling in favor of the subsidies would allow Democrats to tout the law's success and vitality against legal challenges.

In addition, a ruling upholding the subsidies could temporarily protect the ACA from Republican pushes to change the law. Sen. John Barrasso (R-Wyo.) said if the subsidies are upheld, Republican lawmakers will "continue to work to try to repeal [the ACA] and replace it with patient-focused care, but at that point ... it would be part of the debate going into the 2016 election because we really don't have a willing partner in the White House with President Obama."

Doug Holtz-Eakin, president of the American Action Forum, added that in the instance of such a ruling, "Republicans will tell the American people that if you want to get rid of [the ACA], you have to elect a Republican" president in 2016.

Meanwhile, some ACA supporters said a ruling in favor of the subsidies could be the "tipping point" needed for Republicans to stop attacking the law. Sen. Richard Blumenthal (D-Conn.) said, "I think they'll see that the American public is firmly and unequivocally benefitting from this law and they'll make their peace with it" (Owens, National Journal, 6/3).