In the next two months the Supreme Court will decide King v. Burwell, determining whether the Internal Revenue Service rule authorizing health insurance premium tax credits to millions of Americans in the 34 states with federally facilitated marketplaces (FFMs) is legal under the Affordable Care Act.
A decision invalidating the IRS rule would be a national disaster. Most of the 8.6 million Americans who enrolled in insurance through the FFMs would lose affordable coverage. Millions of additional Americans who purchase individual insurance with their own money will also find coverage unaffordable, while hundreds of thousands of children and employees would lose coverage. Hospitals would find themselves again bearing the financial burden of providing free care to millions of uninsured Americans.
A decision against the government will not immediately affect premium tax credits in states that operate their own exchanges, so one option is for FFM states to establish state-operated exchanges. But this would require predominantly Republican states to cooperate with the ACA and to cover the costs of insurance marketplaces, and this won’t happen. Moreover, it would take months for states to make this change while enrollees will begin losing their coverage within weeks of a decision.
If the Court decides for the plaintiffs, it will be up to Congress to fix the problems that result. A fix could be easy—a one page statute clarifying that FFMS can grant premium tax credits. This is what the ACA meant all along and is the kind of technical change that Congresses have routinely enacted to clarify complex laws. But the current Congress will not do anything so simple and obvious.
The initial response of Republican leaders to King v. Burwell last fall was jubilation at the realization that the Supreme Court might finally “take down” the ACA, something their repeated repeal votes had failed to do. Savvy anti-ACA legal observers, however, warned them that, given the enormous losses a victory for the plaintiffs would impose on American businesses, “It will be far easier for the justices to” rule for the plaintiffs “if they know there is a viable alternative that can be enacted by both houses of Congress and signed by the president within a week of their ruling.” Politically savvy Republican observers have also recognized a decision for the plaintiffs would permit Democratic presidential candidates to portray Republicans “as heartless brutes who would let people die for lack of health insurance rather than fix Mr. Obama’s law.”
In response to these legal and political realities, Republican members of Congress have proposed a host of plans—more every day and yet more promised—to “fix” the havoc a Supreme Court “victory” would cause. The obvious purpose of Republican pronouncements is to send messages to conservative Supreme Court justices that the Court can invalidate the IRS rule mindless of the consequences and to American voters that Republicans care about the uninsured.
Republicans will have a very difficult time agreeing on a single fix in the short time they have to find one. There continues to be plenty of sniping at “Obamacare lite” plans as Republican presidential hopefuls jockey to be the greatest enemies of Obamacare. But attempts to find a fix are in the works.
So far most proposals have not gone beyond fact sheets and opinion columns. The only bills reduced to actual legislative language—one sponsored by Sen. Ben Sasse (R-Neb.) and another by Sen. Ron Johnson (R-Wis.), with 31 cosponsors--simply attempt to postpone the collapse of insurance markets until after the 2016 election. Neither would actually guarantee access to affordable health care for those who would lose it through an adverse Supreme Court decision nor bring calm to insurance markets or financial stability to providers.
Sasse’s bill would temporarily extend tax credits but dramatically change the way in which they are calculated and begin to eliminate them altogether after six months. Many current enrollees would find coverage unaffordable immediately and many more would join them once the across the board reductions went into effect. Sasse’s bill would prohibit insurers from raising premiums as their markets collapse, driving them into insolvency.
Johnson’s bill is so poorly drafted that it is not clear it would help anyone. But it is meant to end new premium tax credits not only in FFM states but also in state-operated exchange states. Changes it would make in the ACA would further destabilize insurance markets.
The Republican Budget Resolution lays a foundation for Congress to adopt reconciliation legislation amending the ACA by a simple majority vote. But the reconciliation instructions call for repeal of the ACA, not a King v. Burwell fix. Repeal legislation would deprive an additional nearly 12 million Americans of health care access they have gained through the Medicaid expansions, and would trigger a certain presidential veto.
If the Supreme Court holds to its own long-standing principles that judges should read a statute as a whole, the Court will uphold the IRS rule and no fix will be needed. If the Court rules for the plaintiffs, fixating on four words and ignoring the rest of the statute, it had better not count on Congress to repair the severe damage that will follow
Jost is a professor at Washington and Lee University School of Law.