Sen. Ben Sasse, the former university president and health policy adviser in the Bush administration, thinks he has solved a dilemma that could arise if the U.S. Supreme Court declares Obamacare’s health insurance subsidies illegal in up to 37 states.
In such circumstances, President Obama and his fellow Democrats would push Republicans to pass a “simple fix” that would change the language of Obamacare in a way that would allow the subsidies to continue to flow.
But doing so would be a nonstarter for Republicans, because it would further enshrine the healthcare law and restore hundreds of billions of dollars in spending that would otherwise be wiped out by the Supreme Court decision.
“I think what a lot of conservatives have not understood is the Machiavellian fine print” of Obamacare’s regulations, the Nebraska Republican told the Washington Examiner in a Thursday interview at the Conservative Political Action Conference.
What he meant is that if Obamacare subsidies are struck down, under the current regulations, insurers would be free to cancel millions of insurance policies before the end of the year – and will likely do so within 30 to 60 days of any Supreme Court decision (which is likely to come by late June). And Democrats would exploit these cancellations to maximum political advantage to pressure Republicans.
“It is going to make the Paul Ryan throws grandma off the cliff ads look like child’s play compared to what’s going to be happening when they’re going to have known identifiable victims,” Sasse predicted. “The president has already said, ‘We know the names of all of these people,’ meaning ‘we can trot them out as our hostages.’ When they try to do that, there’s going to be unbelievable pressure on Republican governors … to opt into Obamacare and therefore undo what the Supreme Court would have just done to uphold the rule of law. We need to make sure that while we don’t expand, extend, or fix Obamacare, we need to be able to offer targeted, temporary, transitional assistance to those sick people who are going to be subject to yet another Obamacare bait and switch, ‘if you like your plan you can keep your plan.'”
Sasse’s solution is to adapt “Cobra,” the law that allows workers who have lost or changed jobs to maintain their health coverage for 18 months, to enable Obamacare subsidy recipients to maintain their coverage for a temporary amount of time. Unlike Cobra, however, under which individuals have to pay the full cost of their health insurance premiums, the Sasse plan would provide financial assistance.
“We need a long-term conversation about the alternative to Obamacare, but you can’t do that in the 30 days after the court ruling,” he said.
Any plan to extend subsidies for 18 months would likely cost tens of billions of dollars.
Sasse said that there will have to be a debate if any offsets are needed, though he predicted that his plan would be a cost saver.
His argument was that in the event of a Supreme Court decision stripping federal exchange subsidies, states would respond by establishing their own exchanges to claim the subsidies, which would enshrine Obamacare in those states, imposing more costs over time. If states established their own exchanges, it would allow them to add more beneficiaries to Obamacare, whereas his plan would only help those with coverage at the time of a decision maintain it.
If offsets are needed, however, Sasse suggested one way would be to undo the funding for “demonstration projects,” or experiments, that were allowed as part of Obamacare’s Medicaid expansion, which he argued were improper, citing a report by the Government Accountability Office.
Any decision by the Supreme Court striking down the federal subsidies would also effectively eliminate the employer mandate and weaken the individual mandate in up to 37 states. The reason is that the fines imposed on employers who don’t offer health coverage are only triggered if a worker receives federal insurance subsides — without the subsidies, there are no penalties. As far as the individual mandate, there’s an exemption for individuals who cannot find affordable health insurance and removing the subsidies would allow more people to claim such an exemption.
In addition to the cost of signing onto a “simple fix” in the wake of a Supreme Court decision, another problem would be that it would also effectively re-impose the mandates on individuals and businesses.
But Sasse argued his plan would avoid this possibility, because his Cobra-style subsidies wouldn’t be designed to trigger the employer mandate, and they wouldn’t affect the individual mandate, because no new enrollees would be able to claim the Cobra subsidies — only those who choose to keep their Obamacare insurance.
