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Has Congress prepared for a blockbuster Obamacare ruling?

On the surface, Washington looks completely unprepared if the Supreme Court strikes down some Obamacare subsidies. But there are signs that might not be true.

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Sen. Ron Johnson (R) of Wisconsin, seen here on Capitol Hill in Washington Tuesday, is a vocal critic of Obamacare but has proposed a plan for extending subsidies in the event of a Supreme Court ruling striking them down.

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By the end of June, the Supreme Court will deliver its momentous ruling on the Affordable Care Act, perhaps upending President Obama’s signature legislative achievement. Perplexingly, from the public’s point of view, it looks like neither the White House nor Congress is seriously preparing for this eventuality.

The White House has openly admitted it has no Plan B. That’s Congress’s job, or that of the states, the administration says. And why should the president prepare a fall-back if the high court will surely rule in his favor? If it doesn’t, well, a legislative tweak is all it would take to fix things, say Democrats.

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Republicans don't agree. For now, they're beavering away on some fairly extensive fixes – but none that Democrats will support.

Partisan rhetoric on this most divisive of issues has not dulled in the five years since the ACA became law. And so, while more than 6 million Americans may be on the verge of losing federal insurance subsidies, there’s not a bipartisan solution in sight.  

But looks can be deceiving.

For one, the view from the other side of a blockbuster Supreme Court decision would look a lot different than it does now. For now, in the suspense before the decision, it makes sense for members of Congress to hold their cards close to the vest. But if the court strikes down some Obamacare subsidies, there will likely be no small outcry.

While many conservatives don't like Obamacare, polls show that a majority of Americans don’t want the subsidies to disappear. That means Republicans, who face a Democratic-leaning Senate map in the 2016 election and want to win the White House, would feel pressure to find a solution.

Moreover, there's a sense among some on Capitol Hill that the Supreme Court might grant a temporary stay if it strikes down subsidies, giving Congress time to work out a solution.

If the administration loses, "Congress knows that they have to act. Republicans know they have to do something to prevent 6.4 million Americans from losing their benefits," says G. William Hoagland, senior vice president for the Bipartisan Policy Center. "When it’s very clear that a lot of people would be harmed by this and the chaos that it would create, I have to believe Congress would rise above." 

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At issue in King v. Burwell are federal subsidies offered to people in states that have not set up their own insurance exchanges. If the Supreme Court decides for the plaintiff, nearly 6.4 million people in those 34 states could be denied the subsidies – 87 percent of those enrolled under the ACA in those states.

The uncertainty is giving both parties the opportunity to again play up their differences. Indeed, at the moment, there's little to be gained from releasing a detailed alternative. If the court upholds the subsidies, then a Plan B would be irrelevant and could be used as fodder by political opponents.

The possibility that the court could grant a temporary stay is also a factor. That would affect the one major House-Senate Republican effort to find an alternative, which has not been made public yet partly for that reason.

The unknown outcome also helps account for the administration’s rather laissez faire posture on the issue.

“Every Democrat is kind of whistling by the graveyard saying that they expect the Supreme Court to rule for the administration. So I think it would be naïve to expect them to make a commitment early on,” said Sen. Bill Cassidy (R) of Louisiana, at a press conference on Tuesday. He has introduced ACA replacement legislation that Democrats oppose.

One path forward may be to temporarily extend insurance subsidies if they are struck down, says Mr. Hoagland. “I’m not saying that today there is bipartisan support,” admits Mr. Hoagland, a former longtime Republican Senate staffer. But that could change once the court actually rules. He describes the atmosphere today as “the storm before maybe it clears.”

Hoagland notes that Republican Sen. Ron Johnson, a conservative who opposes the ACA and faces a tough reelection in the swing state of Wisconsin, has proposed legislation that would extend federal subsidies until August 2017 – after the presidential election.

It would do a lot of other things that Democrats don’t like – Health and Human Services Secretary Sylvia Burwell characterized it as “repeal” legislation at a hearing Wednesday – but Senator Johnson’s subsidy extension “is an indication of how sensitive this is to constituents,” says Hoagland. There could be room for a compromise after a ruling, he says.

He comments, too, that the administration is perhaps not as inactive on a Plan B as it may appear to be. “You keep getting the impression that they’re supposedly not doing anything, but my sense is that’s probably not entirely true.”

In a highly charged hearing on the Hill this week, Secretary Burwell referred to administration planning efforts with states if the court rules against the administration.

“We are ready to communicate to states and do everything we can,” she said. Some states are considering elegantly simple solutions – hitching on to other states’ insurance networks, for instance, or simply naming the federal network as a state agent.

Of course, the divide over this issue may still be too great. Republicans have had six years to come up with their own plan – they haven’t agreed on one yet, and even if one is put forth, they may be unable to unite behind it. And Democrats may not be able to bring themselves to do any horse trading in exchange for extended subsidies.

Maybe they won’t have to. Maybe the court will rule in their favor.

Or maybe not.


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