A.B. Stoddard: Danger in ACA ruling

It’s won elections, become a national joke when a government website couldn’t sell insurance plans, and even snagged President Obama in a lie — but for Republicans, ObamaCare is no longer the gift that keeps on giving.

{mosads}With a Supreme Court decision looming in the King v. Burwell case, the once-desirable prospect of a legal and lethal blow to the healthcare law could suddenly back the GOP into a corner. 

Should the court decide the states that have failed to operate their own exchanges cannot legally provide subsidies for their residents to purchase health insurance, as many as 9 million people could be affected, which would immediately raise prices, reduce enrollment and threaten the viability of the entire system. Of the estimated 34 states affected by the court decision, 26 are led by Republicans, and in 22 of them, GOP senators are running for reelection.

States where subsidies could be voided don’t have plans in place to set up new systems should the subsides lapse. Some proposals include expanding existing state exchanges to include others in regional exchanges, but some state exchanges are struggling due to inadequate enrollment, which affects the funding of exchanges. Hawaii’s exchange, for example, is in the red; it needs 70,000 enrollees but currently has only 40,000.

Republicans, of course, have promised voters for years that they intend to repeal the Affordable Care Act (ACA) as soon as possible. So the idea of “bridge” legislation — a contingency plan anticipating the loss of subsidies that provides at least their temporary continuation, along with a transition to a new Republican plan — is likely to be opposed by many conservatives who don’t want to nurse ObamaCare back to health. 

Passing a contingency plan before the court’s decision could avoid new spending, because the Congressional Budget Office would likely calculate current subsidy levels; likewise, waiting for a ruling would mean new spending to restore subsidies rendered illegal. Even a month ago, that was the consensus plan  to avert the dreaded “death spiral.” Now the party appears divided: Rep. Paul Ryan (R-Wis.), the Ways and Means Committee chairman, said in April that preparing a backup was “the responsible thing to do.” But House Majority Leader Kevin McCarthy (R-Calif.) said this week there would be no proposal or votes before the ruling. “Don’t expect us to pre-determine the Supreme Court,” he said.

Republicans involved in drafting the various plans say there are too many different ways the court could rule for them to pass something now. And currently they can’t even gauge how much support those plans might have, because many lawmakers won’t co-sponsor a plan until they see what’s in the court’s ruling. 

The ruling might not go into effect immediately — the justices could write a decision in which the ACA subsidies expire months from now, allowing time for a legislative fix that is revenue-neutral. If it were to be effective immediately, the challenge would be to find new spending, pay for it and convince enough conservatives to support transition legislation that would essentially rescue ObamaCare. A ruling against the subsidies might prompt such an adverse reaction from voters that conservative holdouts find themselves ready to replace the subsidies after all. “People who make a lot of locker room talk today may, once the court rules, make a different decision when they go out on the field,” a GOP lawmaker said.

No matter the decision, Republicans are hoping the court spares them the procedural and political mess ObamaCare could suddenly make for them. 

If the court rules in favor of the status quo, it will be the Democrats who find themselves backed in a corner, with prices set to rise dramatically next year. New estimates for premium increases next year run between 15 percent and 85 percent, averaging as high as 40 percent, which could be devastating.

ObamaCare promises to remain a political problem — for one party or the other. 

Stoddard is an associate editor of The Hill.