GOP Senator Unveils Contingency Plan for ACA Federal Subsidies

Sen. Ron Johnson (R-Wis.) has introduced legislation (S 1016) that would allow U.S. residents to temporarily keep subsidies to help them purchase coverage through the federal exchange even if the Supreme Court strikes them down in King v. Burwell, The Hill reports (Sullivan, The Hill, 4/21).

Background

At issue in the case is that while the Affordable Care Act says subsidies are available to help certain U.S. residents purchase coverage offered "through an exchange established by the State," a May 2012 IRS rule allows the subsidies to be used in an exchange administered either by a state or the federal government. 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, 2/24).

Other GOP lawmakers have unveiled similar contingency plans in case the court strikes down the subsidies (The Hill, 4/21). A plan by Sens. Lamar Alexander (R-Tenn.), John Barrasso (R-Wyo.) and Orrin Hatch (R-Utah) would provide temporary assistance (Ferris, The Hill, 3/1). A separate proposal from Sen. Ben Sasse (R-Neb.) would allow residents to continue to receive subsidies for 18 months, with the tax credit amount decreasing over time (The Hill, 4/21). In addition, a group of House Republicans has outlined a backup plan that would allow affected individuals to continue receiving subsidies in the form of tax credits, among other provisions (Radnofsky, "Washington Wire," Wall Street Journal, 3/3).

Details of Johnson's Plan

Under Johnson's measure, residents would be able to keep their ACA plans and subsidies until August 2017. The legislation also would repeal the individual and employer mandates.

According to the Hill, the plan could help alleviate political pressure on Republicans to restore coverage to millions of U.S. residents who could lose coverage because of a ruling in King v. Burwell. If enacted, the measure could give a newly elected Republican president time to repeal the ACA and replace it with a GOP alternative, The Hill reports.

According to The Hill, Johnson's measure has 29 Republican co-sponsors, including Senate Majority Leader Mitch McConnell (R-Ky.). However, McConnell spokesperson Don Stewart said McConnell's sponsorship does not make the bill the GOP's only ACA backup plan. According to Stewart, McConnell also supports Sasse's measure and is "reviewing other proposals" (The Hill, 4/21).