More than 30 of states face the loss of federal health care subsidies should the Supreme Court rule against the Obama administration this month, but only two — Pennsylvania and Delaware — have signaled that they are considering further embracing Obamacare in a bid to head off the effects of the ruling.
The Obama administration set a June 1 deadline for states looking to express interest if they wanted to set up their own exchanges for 2016, and Pennsylvania Gov. Tom Wolf took advantage, sending a 140-page blueprint to the Health and Human Services Department he said he hoped would “protect 382,000 Pennsylvanians from potentially losing subsidies that help them afford health care coverage.”
In Delaware, health officials said they submitted a “non-binding blueprint” to HHS outlining their interest in a similar arrangement to protect 21,000 residents.
Though many states would be affected by an adverse court ruling, most governors stood pat ahead of the deadline.
One state, Hawaii, is even moving in the other direction, planning to scrap its state-run health care exchange in favor of a quasi-federal setup known in government-speak as a “supported state-based exchange.”
That could leave Hawaii in a legal gray zone should the justices rule that the Affordable Care Act’s text restricts subsidies only to exchanges set up by states. The text of the law seems to suggest that only state-run exchanges should be getting payments, but lawmakers who wrote the legislation said that was never their intent.
Mr. Obama said the justices should listen to the lawmakers.
“There is no reason why the existing exchanges should be overturned through a court case,” he said Monday at a press conference in Germany to conclude a Group of Seven summit of leading industrial nations. “It has been well-documented that those who passed this legislation never intended for folks who were going through the federal exchange not to have their citizens get subsidies.”
Some states blew past the June 1 deadline for deciding on changes, saying they will wait to see what the court does.
West Virginia is one of those.
“State officials have begun preliminary discussions in preparation for the Supreme Court’s ruling. However, options or possibilities will depend on the language in the court’s final decision,” said Chris Stadelman, a spokesman for Gov. Earl Ray Tomblin, a Democrat.
A handful of states that have hybrid exchanges are awaiting the ruling to see whether the “supported state-based exchange” arrangement still would allow subsidies to flow.
Pennsylvania and Delaware would rely on this model, which leverages the federal HealthCare.gov website for consumer enrollment while the state handles plan management, consumer outreach and other functions. Three states — Oregon, Nevada and New Mexico — already operate under this arrangement.
“We could end up with about six states in that model next year,” said Caroline Pearson, senior vice president at Avalere Health, a Washington-based consultancy. “Of course, the legal treatment of a supported-state exchange is a bit ambiguous under the [Supreme Court] ruling, but most people think these exchanges would count as state-based for the purpose of subsidies.”
The administration says 6.4 million customers who bought plans for the 2015 year on HealthCare.gov are relying on a government subsidy that averages $263 per month. Without the subsidies, healthier enrollees would likely drop coverage first, sending insurance markets into a tailspin.
“This would be hard to fix,” Mr. Obama told reporters in Germany. “Fortunately, there’s no reason to have to do it. It doesn’t need fixing.”
Republicans, meanwhile, are working on plans to minimize political blowback from a decision while moving away from Obamacare.
“Let’s be clear: If the Supreme Court rules against the administration, Congress will not pass a so-called one-sentence fake fix,” said Sen. John Barrasso, Wyoming Republican. “Republicans didn’t create the ongoing mess, but we are prepared to help the American people who have been hurt by President Obama’s unlawful actions and his failed law.”