Obama Can’t Save Obamacare from the Supreme Court
Policy + Politics

Obama Can’t Save Obamacare from the Supreme Court

If the Supreme Court rules against a key Obamacare provision, the White House won’t be able to save it.

On Tuesday, Health and Human Services Secretary Sylvia Mathews Burwell told lawmakers on Capitol Hill that the Obama administration has no tricks up its sleeve to manage the potentially looming disaster if the Court strikes down federal subsidies for millions of Americans in the 37 states that rely on the federal exchange.

Related: Here’s What Might Happen if the Supreme Court Rules Against Obamacare

"We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision," Burwell wrote in a letter to GOP lawmakers who asked if HHS had any contingency plans.

The Court will hear oral arguments in the high-stakes case of King v. Burwell next week. The plaintiffs in the case charge that the law’s language only provides subsidized coverage for people enrolled in states that set up their own exchanges, not those on the federal exchange. Right now, all income-eligible people –nearly 90 percent of all Obamacare enrollees—receive federal subsidies, regardless of which exchange they used. 

If the Court rules with the plaintiffs, at least 8 million people will lose their subsidized coverage, and millions more will be booted from their plans. The administration has warned that an adverse ruling will cause a disastrous ripple effect throughout the entire health care system.

“A decision against the Administration in the King case would cause massive damage: first, millions of people would lose their health insurance subsidies and therefore would no longer be able to afford health insurance; second, without tax subsidies healthy individuals would be far less likely to purchase health insurance, leaving a disproportionate number of sick individuals in the insurance market, which would raise the costs for everyone else,” Burwell wrote.

Related: If SCOTUS Rules Against Obamacare, Health Costs Will Soar

So, if the administration can’t do anything, Obamacare’s fate would be left up to the Republican-controlled Congress, which could vote to amend the law’s language to restore the subsidies, or to the states, which could create their own state exchanges if they haven’t already. Some Republican governors have been lobbying Congress to come up with an Obamacare “fix” if the court rules against the health care law. 

Both options are unlikely, since GOP leaders in Congress have already decided they won’t vote to restore subsidies, and instead will likely use such a ruling to get rid of the Obamacare for good. Meanwhile, at least five Republican governors also took the option off the table—saying they oppose Obamacare and the costs it might impose on their states.

The secretary’s letter came on the heels of a new Gallup poll that found the president’s health care law has sliced the country’s uninsured rate to a 7-year-low. But a Supreme Court ruling against the administration could quickly change those results.

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