Tea Party Senator Ron Johnson has unveiled a new plan to provide temporary help to the millions of people who might lose health coverage if the Supreme Court sides with the King challengers and guts subsidies in three dozen federal-exchange states. Senator Johnson’s fix reportedly has 29 GOP co-sponsors, including Senate leader Mitch McConnell, and it is fair to assume the eventual GOP post-King contingency plan, if there is any GOP consensus plan, may look something like it.
The Johnson plan is a useful marker in this debate. It helpfully reveals the absurdity of the GOP post-King “contingency plan” promise, and it neatly captures the absurdity of the broader GOP repeal-and-replace stance, too.
The Johnson plan would keep subsidies going — for everybody across the country who would be adversely impacted by a Court ruling — until September of 2017. This is similar to the mechanism suggested in other contingency plans floated by Republicans, which also provide a temporary subsidy. The idea is to buy time to develop a more comprehensive GOP replacement for Obamacare. As Johnson himself recently put it, this would allow the future of health reform to be litigated in the 2016 presidential race.
The charitable interpretation of this is that Republicans genuinely want to spare people from the damage of a pro-King ruling while they develop a real Obamacare alternative to present in 2016. The less charitable interpretation is that Republicans want to postpone the political fallout from millions losing insurance so it doesn’t damage GOP electoral chances next year. (As it happens, this problem could be particularly acute in Johnson’s home state of Wisconsin, also home to leading GOP presidential candidate Scott Walker.)
The rub of the Johnson plan is that it would also repeal the individual mandate — as would other suggested GOP contingency fixes. At the same time, though, the Johnson bill would appear to keep in place the ban on discrimination against preexisting conditions — something other proposed contingency fixes would do, too. After all, the mandate is the part of Obamacare that Republicans loathe as tyranny; the consumer protections are popular.
The problem, though, is that this risks driving up premiums, because healthy people might drop insurance without the mandate, leaving a sicker risk pool that is more expensive to cover, according to Larry Levitt of the Kaiser Family Foundation. Someone would have to pay for that difference. Levitt tells me:
“If there is no mandate, but still protections for people with pre-existing conditions, premiums would inevitably rise. If subsidies remained the same, people would end up paying more for their insurance out of their own pockets. If you wanted to make sure that people didn’t have to pay more, then the government would have to make up the difference with bigger subsidies and higher spending.”
It’s hard to predict how all that would shake out. But the key is that this remains one of the fundamental policy conundrums that Republicans still have not cracked — one which continues to prevent them from offering a consensus alternative reform plan, more than 50 months after they vowed such an alternative. The new Johnson contingency plan, by failing to tackle that conundrum, would simply dump it into the lap of the eventual 2016 GOP nominee, with unpredictable consequences along the way.
There’s one other interesting point embedded in the Johnson alternative. Take a look at the language of the bill that would temporarily extend subsidies for those who would lose them from a pro-King ruling. In effect, for all of those who are on the federal exchange, and would no longer be eligible for the tax credits, the bill would substitute (for a period of time ending in September of 2017) this clause…
‘enrolled in through an Exchange established under the Patient Protection and Affordable Care Act’
….for this one:
‘enrolled in through an Exchange established by the state under 1311 of the Patient Protection and Affordable Care Act.’
Presto, problem (temporarily) solved! Thus, this bill shows how easily one little change — minus the end date — would permanently fix the problem.
So we know that the problem of millions suddenly losing subsidies could be fixed very easily if Republicans wanted to. We also can gather Republicans themselves don’t want this problem to exist in the run-up to the 2016 election. Yet they won’t agree to this simple permanent fix, because they still want to find a way to use the looming mess as leverage to push their own Obamacare substitute that would do away with the individual mandate. Yet they can’t unite behind any consensus alternative that would actually accomplish that while keeping the stuff in the law they know voters like.
But no worries. They can always figure this out later, right?