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Republicans

The GOP's New Strategy: Killing Obamacare with Kindness

Later this year, the Supreme Court could deliver a fatal blow to Obamacare—so why are Paul Ryan and company making plans to save it?

It’s been a busy week for a surprising Republican cause: Finding a “Plan B” in case the Supreme Court lobs dynamite at the Affordable Care Act.

By July of this year, the court is expected to decide the King v. Burwell case, which could strike down subsidies for people using the federal exchange at HealthCare.gov. This past Tuesday, Tennessee Sen. Lamar Alexander emerged as the ringleader of a group that would draft “a response that makes practical sense.” On Friday, Politico revealed that Wisconsin Rep. Paul Ryan and other House committee chairs would run a task force to develop a new Obamacare replacement.

Have Republicans suddenly warmed to the law? Not at all–completely the opposite. The plaintiffs in King charge that the Affordable Care Act was written to deny subsidies to customers in states that did not set up insurance exchanges. Their theory, which progressives find ludicrous, is that the law’s references to insurance purchased through “an exchange established by the state” were meant to spook states into building exchanges.

One of King’s advocates, Cato Institute scholar Michael Cannon, burned copious jet fuel as he convinced (mostly) Republican state legislators not to build exchanges. If the plaintiffs win, the 37 states that went along with this will have no access to subsidies. Cue the “death spiral” that sends the Affordable Care Act collapsing.

Cannon has encouraged Republicans to pray for the worst, and then take all the credit when the worst comes. “If the Supreme Court vacates the IRS rule,” he wrote last year, “it would be recognition that the ACA itself denies subsidies to those four million federal-exchange enrollees.” But unlike Cannon, the Republicans who rule Congress and most of the states have to win elections. If King’s plaintiffs win, who’d be blamed for the sudden, terrible spike in insurance payments?

Republicans know the answer to that. At this month’s joint congressional retreat in Hershey, Pennsylvania, Ryan got a question about whether Republicans risk looking too “gleeful” if the subsidies are struck down. “We're obviously doing contingency planning for King v. Burwell,” Ryan answered. “It would be wrong not to.”

By that time, reporters were mostly aware that Ryan had led a closed-door panel discussion about health care, where the possible King fallout had come up. Republicans were addressed by Avik Roy, a fellow at the Manhattan Institue, who’d just published a column arguing that the best response to a King plaintiff victory would be Congress “setting up liberalized insurance marketplaces” in the affected states.

A Republican aide, asked today to describe the thinking on “Plan B,” described a philosophy that veered closer to Roy than to Cannon. If the court were to strike down subsidies, residents of the 37 exchange-deprived states would get an alternative–not the shaft. The plan is likely to be released in advance of the court’s decision. Then Republicans—instead of being easy targets for the Democrats who count up the number of GOP Obamacare repeal-attempts and cite them in fundraising letters—might actually look responsible.

Democrats see this as a massive scam, a scam on top of a scam. They’d been compiling evidence from the yearlong ACA debate, and gotten plenty of current and former members of Congress to deny that the subsidies were ever optional. Reporters like The Washington Post’s Greg Sargent had been logging interviews with state officials who had never heard this “subsidies only for state exchanges” jive until some libertarian lawyers started talking. The New Republic’s Brian Beutler had found Republicans admitting that the subsidies were universal, then changing their stories when the lawsuit was filed.

Just this Wednesday, the pro-ACA group Families USA gathered some of the law’s beneficiaries at a meeting room on the Hill, to help file an amicus brief on behalf of HHS. One by one, the patients told their stories and daubed their tears. Michigan Rep. Sandy Levin, who’d chaired the House Ways and Means Committee when the ACA was passed, expressed pure bafflement at the idea that the law contained a subsidy time bomb.

 “We don’t think there’s anything to be fixed,” he said. “That issue was never part of the discussion! It was never discussed even by the opponents.”

This week, with key Republicans finally discussing a “fix,” Democrats and progressives think they know what’s going on. “There's no doubt that the GOP chatter about a potential fix is intended to ease any fears the conservative justices may have that, if the Court blows up our health care system, no one will pick up they mess that they've made,” argued Ian Millhiser, a scholar at the Center for American Progress who’s profiled the sorts of people who’d be ruined by a libertarian victory in King. “Before King, the GOP had little desire to really come up with a serious plan and a great deal of incentive not to spent their political capital on something that is likely to be more unpopular than Obamacare.”

Indeed, this week’s bold new “Plan B” push was neither bold, nor new. Months ago, libertarian attorney Randy Barnett, a key figure in the near-miss lawsuit against the ACA’s mandate, argued that Republicans needed to be ready to “restore the private insurance market” if King went their way. His plan was the McCain 2008 health care plan, minus the voter-tested (and rejected) “McCain” bit.

The only King response ruled out by Republicans was the simple one. It would be relatively easy for Congress to pass a law clarifying the language of the ACA; it would be almost as easy for red states (and some blue states under red governance, like Wisconsin) to quickly announce state-federal partnerships. That won’t happen. It would mean, effectively, saving the ACA.

“Most Iowans would like to see Obamacare go away and would like to see it replaced with something more like what we have in Iowa,” explained Iowa Gov. Terry Branstad in an interview. “We don’t want to make the mistake that Maryland and some other states have made, spend millions of dollars and have the exchange not work.”

In a widely-cited interview with the Wall Street Journal, Indiana Sen. Dan Coats answered a question about a legislative “fix” with a “no, no, no, no.” In a hallway interview, Kansas Sen. Jerry Moran waved off the idea of his state creating an exchange.

“I doubt that that’d be the reaction of Kansas,” he said. “We’re working [in the Senate] to have an answer to the American people on what it is that we’d like to see replace Obamacare.”

In another interview, Alabama Sen. Jeff Sessions praised his state’s decision to forgo an exchange, and said Republicans would offer a fix to “minimize government domination” of health care. “If the Supreme Court rules correctly,” said Sessions, “at least the way I think is plain, then we need to challenge our Democratic colleagues and propose a fix that’s consistent with what the American people want. They’ve opposed this bill since the beginning, in great numbers.”

All of that sat perfectly well with Michael Cannon. Reached by email, he said he did not mind that Republicans were favoring a “fix” to the ACA over the concept of just letting the law burn.

“If the Supreme Court says millions of people are in the lurch because Obama abused his power, would that make Republicans want to give him more power?” asked Cannon. “Probably not.”