We knew this was coming. If the Supreme Court holds in King v. Burwell that the IRS illegally provided subsidies to Obamacare customers in states with federally-established exchanges and it doesn’t stay its decision, then such subsidies will almost immediately halt for millions of Americans. That is going to be quite painful for many Americans’ bottom lines, and that pain is going to be blamed on Republicans.
House Republicans appear to be coalescing behind a plan that would give states the option of keeping ObamaCare subsidies if the Supreme Court rules against the healthcare law.
The plan, presented Wednesday by Rep. Paul Ryan (R-Wis.), would give block grants to states that want them, according to lawmakers who attended a briefing. States would get to choose how to spend the money to cover people in their state. The grants would last for two years, giving the next president a chance to enact an alternative to ObamaCare.
Let’s break this down a little more. First, the good news: as part of the package, the employer and individual mandates would be immediately repealed. States could opt out of the rest of the Obamacare regulatory system starting in 2016. That’s about it for the good news.
Now the part that hardcore conservatives (including my own coblogger, Drew M.) are going to hate: the plan is to “fix” Obamacare so that subsidies can continue to be provided for the rest of 2015, unless the Supreme Court stays its own decision for the same period. States that opt out in 2016 get block grants in the same amount as what their Obamacare customers would have gotten in subsidies, which the opt-out states can use to set up their own health systems as they see fit. Insert some mumbling about federalism and laboratories of democracy and the GOP’s historic strength among state legislatures and in governors’ mansions and you can see why the House GOP likes this idea. However, individuals in states that don’t opt out—that is to say, blue states and states with risk-averse GOP governors—continue to get subsidies just as they do now, but can use that money to purchase health insurance both on or off the federally-established exchanges.
Here’s the kicker: the whole thing, both for states that opt out and those that don’t, comes to a screeching halt in 2017, when the money portions of the deal sunset. This gives our next president an enormous headache right out of the gate and nevermind if he or she had planned to do something else in the first year.
The Hill says both the House Freedom Caucus and the Republican Study Committee are receptive to the plan, but the Senate GOP isn’t making commitments so far. We’ve known that King was coming for over a year, but it just wouldn’t be D.C. without a high-stakes scramble to adjust a multi-hundred-billion dollar program affecting millions of Americans without an insanely tight deadline. The decision in King is expected within 12 days. What could go wrong?