Republicans have a plan if the Supreme Court guts Obamacare this summer by stripping the government of the ability to provide to the states that declined to set up insurance exchanges with federal subsidies… and it looks quite a bit like Obamacare.
If the Court does interpret the Affordable Care Act literally, then it will compel the federal government to withdraw subsidies from millions of Obamacare beneficiaries. That will make the health coverage those individuals obtained through the ACA in recent years prohibitively expensive, and many will find themselves once again uninsured.
This is a double-edged sword for Republicans. In this scenario, the ACA would be functionally repelled, and it would fall on Republicans in control of both chambers of Congress to pick up the pieces. There would also be immense political pressure on those GOP-led states that declined to set up their own exchanges to do so immediately in order to receive federal insurance subsidies. Congressional Republicans would find themselves equally compelled to restore those subsidies immediately amid a deluge of press reports that focus on the lamentable plight of those who lost their health coverage with the stroke of a pen.
The Congressional GOP seems aware of this condition, and they are preemptively addressing it by creating a backstop in the event that the Court strips the ACA of some federal subsidies. Conservatives will be disappointed, however, by the fact that this backstop looks quite a bit like the current incarnation of the ACA.
“Republicans deny that their ideas are tantamount to ‘Obamacare Lite’ but acknowledge they will need bipartisan support for their plans to stand any chance of avoiding an Obama veto,” Reuters journalist Susan Cornwall reported on Monday.
Some experts see bipartisan potential in key elements of what Republicans like Hatch, of Utah, and House Ways and Means Committee Chairman Paul Ryan, of Wisconsin, have discussed to date.
The refundable tax credits in both their plans would be available to those who pay little or no tax, similar to the Obamacare subsidies for low-income Americans.
One difference is that Republicans would allow the tax credits to be used to buy insurance in the private market, an approach they say will help drive down insurance costs and give consumers more options. Under Obamacare, the credits can be obtained only through the state or federal online exchanges.
“It’s not going to be like Obamacare, in my opinion,” Sen. Orrin Hatch told Cornwall. “It’s not a literal subsidy, it’s a recognition that they should have this credit.”
This proposal appears to have the support of many key congressional Republicans, including House Ways and Means Committee Chairman Rep. Paul Ryan (R-WI). Some conservative lawmakers hope that this temporary plan to mitigate the most painful effects of a Court ruling against the government in King v. Burwell will hold only until the first year of the new presidential administration in 2017. Then, they hope to strip the ACA of the individual and employer mandates and to reconstruct health care reform from near bedrock.
This plan will frustrate those on the right who, like Louisiana Gov. Bobby Jindal, have lamented that Republicans will legitimize the ACA by failing to repeal it in full. The problem for Republicans is that restoring those subsidies stripped from Obamacare is wildly popular, and not just among Democrats.
A Kaiser Family Foundation poll conducted in January found 64 percent of respondents want to see subsidies restored for those states where they would cease to exist in a post-King environment. 82 percent of Democrats and 63 percent of independents share that conviction. 40 percent of Republican respondents also want to see subsidies restored while 49 percent disagree. Two-thirds of those polled by Kaiser Family Foundation pollsters back the creation of state-run marketplaces – that includes 51 percent of the Republicans surveyed.
This isn’t the only poll that indicates the restoration of subsidies is a public priority. A Reuters/Ipsos poll conducted from March 6 to April 13 revealed that 79 percent of adults want to see subsidies restored if they are struck down by the Court. That does not mean that the ACA is popular. Quite the opposite; 53 percent of those polled in this survey said they continued to oppose the health care overhaul.
Republicans will call the restoration of subsidies via tax credits a market-based solution to health care reform, and there is no doubt that it is certainly preferable to the redistributive system currently in place. But the GOP must make clear that this is a temporary solution while the ACA is gradually repealed and replaced. If they don’t, they’ll risk irreversibly dispiriting their base conservative voters ahead of 2016.