Does Obama Have a Plan B If SCOTUS Strikes Down Subsidies?

That's what House Republicans, who allege that a secret plan exists to maintain health insurance subsidies, repeatedly asked the president's top health official.
by | February 26, 2015

House Republicans asked President Barack Obama’s top health official repeatedly Thursday if she’s aware of a secret document outlining contingency plans if the Supreme Court strikes down federal subsidies that help make health coverage affordable for about 10 million people.

Rep. Joe Pitts, a Republican from Pennsylvania who leads a health subcommittee, suggested during a hearing ostensibly called to discuss the 2016 budget that administration officials have developed a roughly 100-page document spelling out backup plans to maintain crucial financial support.

But Sylvia Mathews Burwell, secretary of the Department of Health and Human Services, said she’s not aware of such a document then returned to an explanation of what would happen if the court ruled against the administration in King v. Burwell. She then stuck to roughly what she wrote in a previous letter to Congress asking about contingency plans:  “We believe we do not have any administrative actions,” she said.

The Supreme Court will hear oral arguments in the case Wednesday and deliver a decision likely in late June. The case comes down to whether the Affordable Care Act, as written, actually restricts subsidies and tax credits that lower premiums and out-of-pocket costs to people living in states that created their own online exchanges.

Residents in 34 states that use the federal Healthcare.Gov could lose access to federal assistance that helps make their health care affordable, which could lead them to lose their coverage or free them from the requirements that they purchase insurance, lead to massive price spikes for those that remain insured and potentially cause insurers to pull out of the market. About 90 percent of the 11.4 million people who enrolled in the federal exchange through the Feb. 15 deadline received financial assistance, averaging more than $250 per month per policy, according to HHS.

The administration, some major insurers and 22 states argue the prospect of losing federal subsidies for not creating a state-based exchange was never considered a possibility or part of the law. No states have moved to create a state-based exchange as a safe measure and governors have offered no contingency plans. Some have said it's up to Congress to fix the issue, not the states.

Republicans have long been suspicious of the Obama's administration claims that it has no backup plan to, for instance, grant state-based status to exchanges that exercise a degree of independence already. Oregon, Nevada and New Mexico are all considered state-based exchanges by the department of Health and Human Services even though residents of those states use the federal website to enroll in health plans.

Republicans in the committee room continued to press Burwell. Rep. Joe Barton, a Republican from Texas, told her, “I take you at your word that you haven’t seen the plan, [but] don’t you think it’s prudent that there should be one?” he said. “I hope I don’t have a primary opponent, I hope I don’t have a general election opponent, but I have a plan in case I do,” he added.

But Burwell again said the administration doesn't really have any options in the case of an adverse ruling. “If court decides on behalf of the plaintiffs that subsidies are not available to the people of Texas, we don’t have an administrative action we could take,” she said. “So the question of having a plan, we don’t have an administrative action that we believe could undo the damage.”

The Department of Health and Human Services as a whole is unaware of any such document, a spokeswoman said by email "on background." Under the department's rules, that means statements can only be attributed to a spokesperson and not an individual. "We know of no such document. As the Secretary said, we know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision."