Congress Planning Legislation After King v. Burwell Supreme Court Decision

Grace-Marie Turner President, Galen Institute
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Congress is busily making plans for legislative action should the latest challenge to Obamacare prevail in the Supreme Court.

On Wednesday, the justices will hear arguments in King v. Burwell to decide whether the IRS had the authority to write a rule authorizing subsidies to go to millions of people in the 37 states with federal exchanges.

The plaintiffs say the language of the law is clear: Subsidies are allowed in “an Exchange established by the State under [section] 1311of the Patient Protection and Affordable Care Act.” It doesn’t just say this once, but nine times in various linguistic forms.

That is the point that MIT economist Jonathan Gruber made when he famously said: “If you’re a state, and you don’t set up an exchange, that means your citizens don’t get their tax credits.”

The government argues that it’s just a typo in the law: Congress clearly wanted subsidies to be available to citizens of all of the states, and the IRS therefore had the authority to write its rule.

House Speaker John Boehner and Senate Majority Leader Mitch McConnell each have appointed high-level task forces to come up with legislative solutions should the plaintiffs win.

Sens. Orrin Hatch (UT), Lamar Alexander (TN), and John Barrasso (WY) penned an op-ed for the Washington Post on Monday in which they described their “plan to protect Americans harmed by the administration’s actions” and about giving “states the freedom and flexibility to create better, more competitive health insurance markets offering more options and different choices.”

The chairmen of the three committees with jurisdiction over the issue in the House – Reps. Paul Ryan (WI), Fred Upton (MI), and John Kline (MN) – similarly write today about their reform plans in the Wall Street Journal. “What we will propose is an off-ramp out of Obamacare toward patient-centered health care,” they write. “It has two parts: First, make insurance more affordable by ending Washington mandates and giving choice back to states, individuals and families. And second, support Americans in purchasing the coverage of their choosing.”

Congress’s first job will be to provide continuity of coverage for an estimated six million people currently receiving subsidies for health insurance in the federal exchange states. “It would be unfair to allow families to lose their coverage,” the senators write. “We would provide financial assistance to help Americans keep the coverage they picked for a transitional period.”

The House chairmen offer more detail about their plans for longer-term reform involving advanceable, refundable tax credits, and say they are open to further consideration of alternative approaches.

A new survey commissioned by the Independent Women’s Forum found that a solid majority of people trust the states to regulate health insurance markets and an overwhelming majority want Congress to restore subsidies so people don’t lose their coverage. Republican leaders in both houses of Congress would give states the freedom to give their citizens more options of more affordable health insurance policies in more competitive markets.

The changes Congress makes post-King also would create an opportunity to show the free-market, consumer-friendly health reform plans that Republicans would offer should they win the White House in 2016.

There surely will be differences between the approaches the Senate and House take to post-King reform, but the common denominator is a commitment to action.

The administration has belligerently insisted it has no plans should the government lose before the Supreme Court.  HHS Secretary Sylvia Burwell said during a House Energy and Commerce subcommittee hearing last week, “We don’t have an administrative action that we could take so the question of having a plan, we don’t have any administrative action that we believe could undo the damage.”

Committee member Rep. Leonard Lance also pressed Sec. Burwell on whether she knew of a document outlining the administration’s plans. She insisted she had no “knowledge of a 100-page document.”

“The administration is just going to hold up your hands and say we surrender?” asked Rep. Joe Barton during the hearing.

“We believe the law as it stands is how it should be implemented,” she replied.

But that may not be what the Supreme Court finds. If administrative agencies can rewrite a law without involving Congress, then representative democracy will soon collapse. The Supreme Court decision will likely be known in June, and it has implications far beyond health care. But Congress is clearly focused on solutions that will give the Court the space to make the right decision.

Grace-Marie Turner is president of the Galen Institute, a research organization in Alexandria, VA, focusing on free-market ideas for health reform.