Lobbyists in Washington are scrambling to prepare their clients for the chaos that would likely result from a Supreme Court striking down federal insurance subsidies under ObamaCare.
With a ruling expected as early as Thursday in the case of King v. Burwell, anxiety is running high in parts of the business community about the potential impact of a ruling against the administration, which could invalidate subsidies for an estimated 6.4 million people who bought insurance through HealthCare.gov.
The threat from the case is particularly acute for insurance companies, which could see massive losses in revenue if people are forced to drop coverage. But the ruling could also affect hospitals, doctors and others in the healthcare system.
The case’s significance has sent industry executives into the arms of K Street, where lobbyists specializing in the field of healthcare have been working around the clock to prepare for whatever comes next.
“It’s a huge issue [for lobbyists],” said Yvette Fontenot, a partner at the boutique Democratic healthcare lobbying firm Avenue Solutions.
“Anytime there’s this level of uncertainty with these kinds of stakes — what we’re talking about is the collapse of the individual market — it’s everyone’s job to make sure that we’re prepared for every iteration.”
The healthcare sector is spending millions of dollars to keep abreast of developments in Washington, and shelled out $130.7 million on lobbying services in the first three months of the year, according to data compiled by the Center for Responsive Politics — surpassing even the financial services sector.
Law and lobby firms have bolstered their healthcare practices to meet the growing demand, and have been sending out a flurry of briefing materials to help clients prepare for the court’s big decision.
Robert Bradner, a partner in Holland & Knight’s Washington office, and other lobbyists told The Hill that a ruling against the subsidies would start a mad dash for a legislative fix.
“You have to be in the right mindset, in terms of understanding what’s going on and what the implications are,” Bradner said about preparation for the ruling. “Whatever elected officials are saying today will change very quickly if the decision is in favor of the plaintiffs.”
Holland & Knight has many healthcare clients but also works for a number of municipalities, some of which are in states that utilize the federal marketplace.
Congressional Republicans have put forward several proposals for a ruling against the administration, including temporary extensions of subsidies for people affected.
But they have also said a loss for ObamaCare would present a chance to change the Affordable Care Act (ACA), by repealing its mandates for individuals and employers — a non-starter for the White House.
“Secretly, some Republicans are hoping the government wins the case because throwing rocks at the ACA is a lot more fun than is sweeping up the shattered glass if they prevail,” said John Jonas, a partner at Akin Gump Strauss Hauer & Feld who specializes in health work. “However, others may be opening champagne if the administration fails.”
A ruling against the government would almost certainly unleash a tidal wave of lobbying, Jonas said, as interest groups seek to shape the federal response to the case.
“If the subsidies are struck down, everybody who is subject to ACA taxes ... will jump in the ring to roll them back or get rid of them,” he added. “It’ll just open the flood gates to not just how the ACA money is spent but where the ACA money comes from — the tax on plans, the tax on pharma, the Cadillac tax, the medical device tax.”
Both Democrats and Republicans argue the language at issue in the Supreme Court case is the result of a “drafting error” when House and Senate versions of the legislation were combined.
They say the phrase “established by the state” was not written into the law to bar the use of subsidies on the federal exchange — one of the central arguments of the plaintiffs in the case.
“All of us who have worked on it are surprised it has gone this far, and we would be surprised if the court rules against the administration — given all the evidence of the intent,” said Fontenot, the lobbyist who previously served as the deputy director of the Office of Health Reform at the Department of Health and Human Services.
Leavitt Partners, a consulting firm led by former George W. Bush Health Department secretary and former Utah Gov. Michael Leavitt, released a paper earlier this month with a group of former Bush administration health officials urging states to become involved in the bargaining that will likely occur between Congress and the administration if federal subsides are ruled invalid.
“Doing nothing has both political and humanitarian consequences that should be unacceptable to public officials,” they wrote.
“While Congress is interested in a policy solution that resonates with state leadership, it is not their top-of-mind priority,” the paper reads. “These changes will only occur if states forcefully make the case by developing and coalescing around a unified message seeking the flexibility that would be required to build state-specific solutions that maintain control of insurance markets.”
Some states could face an uphill climb in keeping federal subsidies alive; of the roughly 34 states using HealthCare.gov, 11 have also enacted barriers to creating their own state exchanges.
Lobbyists expect the fight over ObamaCare’s future would be drawn out and bloody.
“We’re all prepared to spend a lot of the time tracking legislation that will be vetoed by the president because he’s not going to sign a bill that will send millions back into ranks of the uninsured,” Fontenot said.
“I don’t think we’ve heard much that’s descriptive of a compromise.”