King v. Burwell Update

The range of possible political reactions to the forthcoming King v. Burwell decision, in which the Supreme Court will decide whether tax credits paid to insurers in 34 to 37 states, remains uncertain.

Sarah Ferris of The Hill reports that states are prepared to “zero in” on an “Obamacare rescue plan” if the Supreme Court turns off the spigot:

Two states — Pennsylvania and Delaware — said this week they would launch their own exchanges, if needed, to keep millions of healthcare dollars flowing after the decision. Both want to use existing pieces of the federal health insurance exchange, like its website and call center — a path that would be far less costly than the way most other states have created their exchanges.

Just two states? Reading between the lines, it is pretty clear that friends of the Administration are lobbying hard for this business opportunity. Lawyers who know more than me tell me that this approach of merely papering over the incumbent federal exchange is a risky approach, and certain to bait another, similar lawsuit.

Meghan McCarthy at Morning Consult suggests Congressional Republicans are consolidating around an approach to replace the subsidy with block grants to the affected states. I’ve had positive words for Senator Cassidy’s proposal to restore flat (non-income tested) tax credits to individuals. However, a block grant appears unlikely to earn President Obama’s signature. After all, the money would go to Republican governors. Why would the President take money that the Supreme Court prevents him from doling out to individuals and give it to Republican governors instead?

Senate Majority Leader Mitch McConnell, on the other hand, appears resigned that the President will not sign any Congressional amendment to Obamacare.

Print