POLITICS

GOP Readies New Obamacare Hostage Plan As Supreme Court Drama Builds

06/11/2015 07:29 am ET | Updated Jun 11, 2015

It looks like some Republicans are getting ready to take another hostage in their efforts to destroy President Barack Obama’s health care law. They’re just waiting to see if the Supreme Court will hand them the gun.

For weeks now, the debate about how to respond to a court ruling in King v. Burwell, the case challenging a key component of the Affordable Care Act, has taken place indirectly -- through speeches, newspaper columns, and media interviews. But with the court likely to issue a decision by the end of June, tension has been building. On Wednesday, it led to a confrontation when Rep. Paul Ryan of Wisconsin, Republican chairman of the House Ways and Means Committee, grilled Sylvia Burwell, the secretary for Health and Human Services, over what the administration would do if a majority of justices were to rule in favor of the plaintiffs.

Such a ruling would prohibit the federal government from distributing health insurance tax credits in Florida, Texas, and 32 other states where officials opted not to create “exchanges” for purchasing coverage, leaving that work instead to the federal government. That would cover about 6.4 million people, including some families for whom the tax credits discount the price of insurance by thousands of dollars a year. Most would have to drop coverage altogether, throwing those state insurance markets into disarray.

The crux of the lawsuit is a dispute over how to interpret four words that appear in a key passage of the law. That’s why administration officials have said that the easiest, and most viable, remedy would be for Congress to pass a one-sentence amendment to clarify that tax credits should be available in all states. Republican leaders like Ryan have made clear they won’t do that, instead dangling the possibility of some kind of “off-ramp” or “transitional” assistance that would allow people in those states to keep their tax credits -- but only for a little while and only if the Obama administration makes concessions.

During Wednesday’s hearing, Ryan wanted to know whether Obama would accept such a “compromise,” asking, “Will [he] stand up with one piece of paper and say, ‘My way or the highway,’ or will he work with Congress?” Burwell said it was impossible to answer because, at this point, Republicans hadn't given the administration a bill to consider. And she was right about that.

Neither Ryan nor other House Republican leaders have seen fit to produce a detailed proposal or even to hold hearings on what such a proposal should look like. While they say they will soon unveil a full package, based on private negotiations they have been conducting, they've been promising the same thing for five years, with nothing to show for it except skeletal proposals and op-eds -- like the one Ryan, along with two other House leaders, published earlier this year in The Wall Street Journal. Keep in mind that plenty of Republicans have said they want no deal at all.

At this point, the most reliable guide to what Republicans have in mind may be one of the few real pieces of legislation the GOP has produced: “The Preserving Freedom and Choice in Health Care Act.” While the proposal comes from Wisconsin Sen. Ron Johnson, who is not a major player on health care issues, it has 31 co-sponsors. One happens to be Mitch McConnell, the majority leader -- making it as serious as anything circulating on Capitol Hill.

Read more on the latest Obamacare Supreme Court case below:

Johnson’s bill, introduced in April, is audacious, as brief analyses from researchers at the Center on Budget and Policy Priorities and Henry J. Kaiser Family Foundation have revealed. It would allow the federal government to keep dispersing tax credits in the states where officials don’t run their own exchanges, but only until 2017 and only for people who receive the subsidies already. At the same time, it would eliminate the individual mandate (the requirement that all people get comprehensive insurance or pay a fine) and the requirement that all insurance policies include “essential health benefits” (a category that includes prescription drugs, treatment for mental illness, and maternity care). Johnson’s bill may even weaken regulations that prohibit insurers from denying coverage or charging more to people with pre-existing conditions, although that part of the proposal is open to different interpretations.

By removing interlocking pieces that allow the Affordable Care Act to work, Johnson's bill would effectively roll back many if not all the law’s major reforms -- which would undoubtedly suit some people just fine. To take one obvious example, people who wanted to buy less-comprehensive, less-costly policies would have access to them; people who wanted no coverage at all wouldn’t face financial penalties. Fines for employers that don’t offer insurance would also vanish.

But these changes would have consequences. People who need comprehensive coverage, because of existing medical conditions, would have a harder time finding it. Some people who bought skimpier policies would suffer injuries or develop serious medical conditions and discover, suddenly, they have no way to pay for the care they need -- if they could find care at all. Without the individual mandate, insurers would have a harder time attracting healthier customers, forcing them to raise premiums for everybody. Without the employer requirement, the deficit would rise.

The loss of tax credits would be particularly tough, since it would mean all those people who couldn’t afford insurance without them would remain uninsured. The number of people without coverage, now in the midst of a historic decline, would shoot back up. (Johnson has said the goal would be for Congress to craft a different coverage scheme by 2017, but there's no reason to think Republicans would actually enact such a plan, let alone a plan that would come close to providing the same level of protection.)

But it’s not the nature of these changes that make the Johnson bill such a revealing window into the mindset that many Republicans have right now. It’s where those changes would apply. Johnson’s bill would roll back regulations and stop new subsidies even in states like California, Kentucky, Maryland and New York, where officials have set up their own exchanges. A ruling for the plaintiffs in King v. Burwell wouldn’t affect these states, yet destroying the Affordable Care Act in these states is the price -- or, you might say, the ransom -- that this bill’s supporters would demand in order to spare people in the affected states from losing their coverage right away.

Johnson’s proposal is just one that Republicans have floated, and it differs in important ways from the others. (National Journal and Vox have published good summaries of the others.) But one way or another, all seek to roll back the Affordable Care Act in fundamental ways that would make the law’s protections available to fewer people. The common theme, as Jonathan Chait of New York magazine observed recently, is that the “Republican proposals would all simply extend temporary help to immediate victims of the lawsuit in return for creating many more victims over a much longer period of time.”

It’s difficult to imagine Obama signing such a bill and, presumably, many Republicans understand that -- which is why the talk of compromise and “transitions” and “off-ramps” sounds so suspiciously like a talking point, designed to insulate Republicans from a voter backlash once millions lose their insurance. Then again, Republicans have sought such confrontations before. Maybe they think, this time, they will prevail.

CORRECTION: This article originally misstated the number of co-sponsors on Johnson's bill. It's 31, not 37.

The graphic accompanying this story has been removed and replaced with a new one.

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