Five Republican governors, including 2016 presidential hopeful, Scott Walker of Wisconsin, have vowed not to step in and restore federal health care subsidies to millions of people in their states if the Supreme Court strikes down a key piece of Obamacare, Reuters first reported.
In March, the Court will begin hearing oral arguments in the high-stakes case of King v. Burwell that challenges whether language in the health law provides federal subsidies for people signing up for coverage through the federal exchange.
The plaintiffs charge that the wording of the law only mentions state exchanges, and does not provide for subsidizing anyone on the federal exchange. If the Court agrees, more than 6 million people on the federal exchange would lose their subsidized coverage.
This could have a disastrous impact on the entire health care industry. Last week, the Urban Institute estimated that such a ruling would leave more than 8 million people without health coverage, driving up premiums and hospital costs.
But there are options to soften the blow if the Court rules against the administration—especially at the state level. States using the federal exchange could restore subsidies for their residents if they set up their own exchanges.
Of course, politics makes that option a lot more challenging—especially in heavily Republican states that staunchly oppose the president’s health care law including the five Republican governors who have already taken this option off the table.
According to Reuters, governors of Louisiana, Mississippi, Nebraska, South Carolina and Wisconsin all said they would stick by their original decision not to create their own exchanges—largely because of their overall opposition to the health care law.
Other states including Georgia, Missouri, Montana and Tennessee with Republican-controlled state legislators are also not likely to set up their own exchanges under Obamacare. Reuters noted that all nine states combined have 1.4 million Obamacare enrollees receiving federal subsidies at risk of being lost if the Court strikes them down.
The major implications of the Court’s ruling could prompt these states to change their minds, however, as millions of low to middle income people would be hit with sky-high health care costs.
Other states like Delaware, Maine, Ohio and Pennsylvania, meanwhile are in the process of figuring out a way to deal with an adverse Court ruling—in order to keep subsidies flowing to their residents.
Legal experts say that states don’t necessarily need to create a traditional state exchange with a website. Instead, they could use workarounds that allow them to establish a legal state exchange (basically on paper) while still using the federal website.
States have until June to decide if they want to set up their own exchanges—or six months before the open enrollment period begins in November. This could be a tight deadline, as the Court’s decision will come around the same time.
Another option, though far less likely, is for Congress to amend the law with language about the federal exchange. Of course, anyone vaguely familiar with the goings on over on Capitol Hill knows that any Obamacare fix—especially this one—isn’t likely to happen with a Republican-controlled Congress. House Budget Committee Chairman Paul Ryan said as much during an interview on Bloomberg television. Instead the GOP is likely to use an adverse SCOTUS ruling as an opening to repeal and replace Obamacare.
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