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HHS head: No ObamaCare backup plan

HHS head: No ObamaCare backup plan
© Greg Nash

The Obama administration has no contingency plan if the Supreme Court strikes down subsidies at the heart of ObamaCare, Secretary of Health and Human Services Sylvia Mathews Burwell said in a letter to Congress on Tuesday.

"We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our healthcare system that would be caused by an adverse decision," Burwell wrote. 

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Burwell had previously declined to say whether the administration has a backup plan if the Court strikes down subsidies for millions of people under the law in the case of King v. Burwell, set for arguments March 4. 

“Right now, my focus is on completing and implementing the law, which we believe is the law,” Burwell emphasized at a Senate Finance Committee hearing earlier this month, where GOP senators pressed her for a plan. “Right now, what we’re focused on is the open enrollment.”

Open enrollment ended Feb. 15. The administration is looking to show the court the damage that would be done if it struck down the subsidies. 

Congressional Republicans, including Sen. Orrin Hatch (R-Utah) and Rep. Paul Ryan (R-Wis.), are also working on contingency plans. Hatch said Monday he would unveil a plan "in the coming days."

The case could leave millions without subsidies to help them afford insurance in the roughly three-dozen states that rely on the federal government to run their marketplaces under ObamaCare.

The challengers in the case argue that the phrase in the law referring to marketplaces "established by the state" prevents funds from being disbursed to federally-run marketplaces. 

The government says that is a nonsensical reading of one phrase that is contradicted by the rest of the law.

Burwell's letter maintains that the Obama administration will prevail in court. 

"We are confident that we will prevail because the text and structure of the Affordable Care Act demonstrates that citizens in every state would be entitled to tax credits, regardless of whether they purchased their insurance on a federal or state marketplace," Burwell wrote.

The administration has been touting the better-than-expected 11.4 million sign-ups under ObamaCare, announced earlier this month, to show that the law is ingrained in everyday life already.

"The evidence shows that the Affordable Care Act is working and that families, businesses and taxpayers are better off as a result," Burwell wrote.

Republican senators said the letter is evidence that the administration cannot fill the gap on its own, and pointed to GOP solutions that they are working on. 

“This letter is clear and it is consequential," Sen. John Barrasso (R-Wyo.) said in a statement. "If the Supreme Court rules against the Administration, President Obama does not have the authority to use Administrative actions to undo the decision. Republicans are preparing for the ruling and are committed to helping the millions of Americans who have been hurt by the White House’s decision to illegally implement Obamacare.”

Hatch said the admission shows that the law is unworkable, and again pointed to working on a Republican alternative.

“By admitting they have no contingency plan to assist the millions that may lose subsidies, the Administration confirms how the misguided law is unworkable for the American people," Hatch said. "I’m committed to working with my Republican colleagues on how Congress can respond to help those hurt by Obamacare’s broken promises, including those in a post-King v. Burwell world."

Many experts expect that the administration actually does have a contingency plan, but it has no reason to share it, because it could lessen pressure on the Court. 

Tom Scully, an HHS official under former President George W. Bush, told The Hill this month that "they certainly should not discuss it."

“Of course, they have one," he said. "They should all resign if they don’t."

— This story was updated at 4:25 p.m.