If the Supreme Court guts subsidies for millions, Republicans will probably try to pass some form of “contingency fix” plan that would keep those subsidies going — at least, until after the 2016 elections. But that would likely be packaged with repeal of the individual mandate, which suggests the real GOP game plan may be to draw a presidential veto — allowing Republicans to claim they tried to save all those people’s health insurance, but mandate-crazed Barack Obama wouldn’t let them.
Here’s something that could complicate the GOP blame-game spin: A new issue brief from the American Academy of Actuaries finds that the GOP contingency fix plans could actually result in more disruptions to the insurance markets.
The group looks at both the idea of a temporary continuation of subsidies, and of the repeal of the individual mandate — both of which have been discussed as part of various GOP contingency fix plans, such as the one offered by Tea Party Senator Ron Johnson, which is backed by dozens of GOP Senators, including the leadership.
Doing away with the mandate, the group concludes, would “threaten the viability of the health insurance market.” If the GOP alternative also keeps protections against people with preexisting conditions — which Republicans generally favor, perhaps because they’re popular — those with “lower cost health care needs” will drop coverage, meaning the average costs of those left behind will be higher. This “could result in adverse selection that would raise premiums.”
The group also concludes that “a temporary extension of premium subsidies” might succeed in delaying the disruption of markets. But it notes that if the temporary subsidies are made available only to those who are currently getting them, and not to new enrollees — an idea that has been circulating — that, too, could create problems. It would result in “lower overall enrollment in the individual market, as some individuals would transition out of coverage, but few would transition in,” causing the “risk profile of the market to deteriorate somewhat.”
And at any rate, a temporary extension would only avoid disruption in the short term: “If the subsidies are ultimately eliminated, potentially millions of individuals will drop coverage and premiums will increase substantially, unless other equally strong mechanisms are implemented.”
Democrats are seizing on this to point out that Republican contingency fix plans are — shockingly — not about improving the law. “I hope that Republicans will stop putting politics first and instead work with us to continue moving our health care system in the right direction for families, with more affordability, more coverage, and higher quality care,” Senator Patty Murray said in a statement.
Beyond the spin wars, some health wonks agree that the GOP contingency fix plans will likely make things worse. Larry Levitt of the Kaiser Family Foundation emails:
“Actuaries’ heads tend to explode over the prospect of an insurance market where people with pre-existing conditions are guaranteed coverage but there are no subsidies or an individual mandate. Without an individual mandate or some other similar mechanism, insurers would have to raise premiums. All people buying insurance in the individual market, not just those receiving subsidies under the Affordable Care Act, would pay more.”
Indeed, this underscores once again that the likely GOP contingency fix — if Republicans can even pass one — basically would kick the policy conundrum Republicans have yet to solve down the road. Even if there is a temporary extension of the subsidies, their expiration would again loom, and with it (so the report argues) the prospect of market disruptions and higher premiums later. And that’s not even getting into the damage that would likely be done in the interim by repeal of the mandate, which might be necessary to get enough Republicans to pass the contingency fix in the first place.
The inability of Republicans to coalesce behind a solution to this conundrum — how to protect people with preexisting conditions while doing away with the individual mandate — may be one of the leading reasons we still have no GOP alternative to Obamacare. Even if Republicans could pass a clean temporary extension of the subsidies without repeal of the mandate, that would still end up punting that conundrum into the lap of the eventual 2016 GOP nominee, since what to do next would be heavily litigated in the 2016 election.
To be fair, some Republicans, such as Rep. Tom Price, want to forget about a temporary fix and pass a GOP health reform alternative instead. But that seems unlikely — conservatives might oppose plans like his, because they’re not really the sort of free-market reform they want — and at any rate there’s that Obama veto.
So for Congressional Republicans, the short-term post-King options are: Participate in passing a real fix, put the political problem of vanished subsidies behind them, and present an Obamacare alternative in the 2016 election. (It is not impossible that both sides could enter into real negotiations over such a fix that result in both sides making realistic concessions.) Or pass a subsidy fix that also repeals the mandate — which the president would veto — and blame Obama for nixing their effort to restore subsidies and preserve health coverage for millions. Or pass nothing, and blame Obama for creating a law that resulted in the Court gutting coverage for millions (in an outcome widely cheered on by Republicans), after lulling them into a false sense of security that was then snatched away by his incompetence.