IRS chief: No backup plan if ObamaCare tax subsidies struck down

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The head of the IRS said Wednesday that his agency does “not spend any time thinking” about whether the Supreme Court could strike down ObamaCare tax subsidies for millions of people this summer.

IRS Commissioner John Koskinen told a Senate Homeland Security Committee that he is not preparing for the high stakes case, King v. Burwell. That responsibility, he said, rests with the White House, Congress and the states.

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“We basically play the hand we’re dealt. The court will make a decision, and then we will respond,” Koskinen said at a hearing on the agency’s challenges in implementing the Affordable Care Act.

“At this point, we have enough challenges running the filing season,” he added.

Koskinen said there is “no way” the agency can predict how the court will decide on King v. Burwell in June, and therefore, “we don’t spend any time thinking about it.”

The conservative-backed legal challenge would erase federal subsidies in any state that did not establish its own health insurance exchange.

The IRS commissioner was responding to a question from Sen. Joni Ernst (R-Iowa), who asked whether Iowa, which has a hybrid state-federal system, could lose subsidies.

“I hope that, once the decision is made, we can all jump on that together and figure out how we’re going to handle that situation,” Ernst said.

Republicans in Congress have repeatedly pressed the Obama administration to show its hand about how it is preparing for the case.

But President Obama as well as the head of the Department of Health and Human Services (HHS) said there is no fall-back plan to prevent a massive disruption of the healthcare system if the subsidies are wiped out.

Koskinen also stressed his agency had no role in the development of the Affordable Care Act and, therefore, was not involved in the origins of King v. Burwell, which is based on a reading of the law’s text.

In response to a question from Sen. Ben Sasse (R-Neb.) about the IRS’s role in deciding which states received tax credits, Koskinen underscored that his agency made no decisions involving policy.  

“The policy calls, and the development of the act to begin with, are the responsibility of the Treasury Department, the White House, HHS and, ultimately, Congress,” he said.

“We simply implement what they are.”