Republican Plan to Continue Health Subsidies Would Gut Obamacare

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HIGHWAY TRUST FUND

Representative Paul Ryan, a Republican from Wisconsin and chairman of the House Ways and Means Committee, questions witnesses during a House Ways and Means Committee hearing on long-term financing of the Highway Trust Fund in Washington, D.C., U.S., on Wednesday, July 17, 2015.

Photographer: Andrew Harrer/Bloomberg

House Republicans say they are prepared to act swiftly on legislation to ensure Americans don’t lose health-insurance subsidies if the Supreme Court rules that the funds are no longer available in more than half the U.S.

A framework of a replacement plan was presented to House Republicans during a closed-door meeting Wednesday by Ways and Means Chairman Paul Ryan and other House leaders. Senate Republicans met earlier and said they would support legislation to continue subsidies, though they hadn’t reached a consensus on a legislative response to a ruling.

The draft House plan would repeal the Patient Protection and Affordable Care Act’s requirements that most Americans carry insurance and most employers provide it. The legislation would continue tax credits that discount insurance premiums for more than 6 million people who would be affected by the ruling.

The White House has signaled that President Barack Obama would veto legislation that responds to a ruling by attempting to repeal key provisions of the health law.

“That is a bill that from our perspective is repeal, and we’ve spoken to the issue of something that repeals the Affordable Care Act is something that the president will not sign,” Sylvia Mathews Burwell, the U.S. health secretary, said on June 10 about similar legislation written by Senator Ron Johnson, a Wisconsin Republican.

Transition Plan

The Supreme Court will rule this month on a case brought by opponents of the Affordable Care Act who have challenged billions of dollars in tax credits that discount the price of health insurance under the law. They maintain that the law limits subsidies only to states that have established health insurance marketplaces, called exchanges.

Thirty-four states rely on the federal healthcare.gov system instead.

A key question is exactly what Republicans, now in control of both chambers of Congress, would offer as an alternative to coverage under the Affordable Care Act, and how Americans would transition to that system.

House lawmakers said their legislation isn’t intended to be a substantive or permanent replacement for the Affordable Care Act, only a transition plan that would end in two years.

“The press release, legislation” will be ready within moments of a court ruling, Representative Dennis Ross of Florida told reporters after leaving the meeting on the bill. “The day the decision comes back.”

‘Strong Consensus’

Ross added, “There’s a strong consensus in that room” that the subsidies must be continued in some form “until Republicans can substantively change the law.”

Participants at Wednesday’s closed-door meeting said key aspects of a transition plan were presented to lawmakers by Ryan, Energy and Commerce Committee Chairman Fred Upton, Budget Committee Chairman Tom Price of Georgia and Education and Workforce Committee Chairman John Kline of Minnesota.

Along with immediate repeal of the law’s individual and employer mandates, the plan would give states the option to build their own insurance exchanges and offer subsidies, using federal money.

Alternatively, people in states affected by the ruling would receive a subsidy to purchase an insurance plan either from healthcare.gov or on the open market.

The plan was “very well thought out” and satisfied conservatives, said Representative Bill Flores, a Texas Republican who is chairman of the Republican Study Committee, a caucus of about 170 conservatives.

‘Get On Board’

In the meeting, House Speaker John Boehner and Majority Leader Kevin McCarthy “encouraged us to get on board. They also took the opportunity to impress upon us the significance of what we’re doing,” Ross said.

In the Senate, second-ranking Republican John Cornyn of Texas said he would support continuing the subsidies.

“That’s, as far as I am concerned, the No. 1 consideration: Is to make sure that people aren’t hurt any more by Obamacare,” Cornyn said following the Senate Republican meeting. “We don’t know what the Supreme Court’s going to do, but we want to be ready.”

Wisconsin’s Johnson has introduced a bill, S. 1016, that would extend subsidies into mid-2017, although it would repeal the Affordable Care Act’s requirement that most Americans carry insurance. The White House has said that bill and similar measures would undermine the health care law.

South Carolina Senator Lindsey Graham, a 2016 presidential contender, said most Republicans -- himself included -- support some sort of subsidy extension, most likely through the end of 2017.

That time frame would “give people a chance to transition to another system,” Graham said.

Cruz’s Opposition

Another White House aspirant -- Texas Senator Ted Cruz -- is opposed.

“I do not believe we should extend subsidies,” Cruz told reporters after the Senate meeting. He led a protest against spending to enact Obamacare that led to a 16-day partial government shutdown in 2013.

“I think the proper answer is to allow states to opt out,” he said.

Republican congressional leaders including Ryan have declined to offer details of their response to a possible Supreme Court ruling against the subsidies.

“It appears that they’re waiting until we get the Supreme Court decision, King v. Burwell, before they roll out something tangible,” Flores said.

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