States have already responded to Obamacare in vastly different ways, and a Supreme Court ruling blocking the law’s health insurance subsidies would splinter them even further.
Some would rush to fix it. A few have already taken steps in that direction. But many would refuse to remedy the situation.
How states would respond depends on practical realities and, to a large degree, political pressures as Republicans weigh whether propping up a big piece of President Obama’s healthcare law is really worth it. And many would find it’s just not, say experts on both sides of the political aisle.
“The problem is states that will say ‘hell no, we’re not doing it,’ and that’s going to be most of the core, deep South states,” said Thomas Scully, former administrator for the Centers for Medicare and Medicaid Services under President George W. Bush.
States may not have to respond at all. If the court rejects the King v. Burwell challenge, the subsidies would continue to low and mid-income Americans in all 50 states and D.C.
But if the justices rule it’s illegal to supply them in states relying on the federal insurance marketplaces — in a decision expected by the end of the month — an estimated 6.4 million Americans could lose the financial assistance. If that happens, it would throw the healthcare law into choppy 2016 political waters, as both parties blame each other for the resulting mess and try their hardest to turn the situation to their advantage in next year’s elections.
Congressional Republicans say they want to extend the subsidies temporarily, but it will be hard for them to broker an agreement with Obama. That would put the spotlight on the majority of states relying on healthcare.gov, who would face the decision of whether to try to qualify as a state-run exchange and get the subsidies back for their residents.
Just 13 states and D.C. are definitely sheltered from the dilemma, as they already operate their own marketplaces. Another four — Oregon, Nevada, New Mexico and Hawaii — are likely safe, too, because they play a big role in their marketplaces. But that leaves 33 other states. Here’s a breakdown of how they might respond.
States that may be safe already: Iowa, Illinois, West Virginia, New Hampshire, Michigan
These five states have teamed up with the federal government to run their marketplaces, so there’s a good chance they could automatically be considered state-run exchanges if the court rules for King.
Unless, of course, the Supreme Court explicitly spelled out in a decision that those exchanges don’t qualify as state-run. But most experts don’t expect the court to get that specific.
“I would be very doubtful if the Supreme Court rules for King that they’re going to be into the business of deciding exactly what a state-run exchange is,” said Bill Pierce, senior director for Apco Worldwide and a former Department of Health and Human Services spokesman.
“Usually they tend to fluff over those finer details, but you never know,” said John McDonough, a public health professor at Harvard who has written a book about the Affordable Care Act.
States already moving toward state-run marketplace: Arkansas, Delaware, Pennsylvania
These three states have recently received preliminary approval from the Department of Health and Human Services to run their own exchanges.
In a letter last week to governors, the department said Delaware and Pennsylvania can start running their exchanges in January and Arkansas can take over its small group exchange next year and its individual market exchange the following year.
If the Supreme Court blocks the subsidies — but gives a six-month grace period as many expect — these states would be better positioned than most to take over their marketplaces.
States more likely to start state-run marketplaces: Arizona, Maine, Virginia, Missouri, Utah, Idaho, Montana, Tennessee
These states have accepted another major part of the healthcare law — its Medicaid expansion — or have governors who have pushed for expanding the program and legislatures that have been at least somewhat receptive. That could signal a willingness to run their own marketplaces in the interest of preserving subsidies.
Virginia, Missouri and Montana have Democratic governors who have pushed for expanding Medicaid but so far been stopped by their GOP-led legislatures. Republican governors in Utah and Tennessee gained some traction earlier this year on alternative Medicaid expansions, although their efforts have failed so far. Arizona has expanded Medicaid under Gov. Jan Brewer.
It’s still far from certain that these states could muster enough support for a state-run exchange. McDonough thinks fewer than 10 states would do something “substantive” toward establishing their own exchanges. And even if states move that direction, other obstacles stand in the way, like reconvening a legislative session in the fall to vote on it. But if any states could do it, these could be the most likely.
States that might start state-run marketplaces, except their governors are running for president: Ohio and Wisconsin
Neither Ohio Gov. John Kasich nor Wisconsin Gov. Scott Walker have announced 2016 presidential bids yet, but they’re expected to jump into the race. Both governors have shown some openness to the healthcare law’s Medicaid expansion by receiving approval for alternative programs.
But Walker has ruled out his state running its own exchange, saying earlier this month he feels there needs to be a “federal fix” to restore the subsidies if the court blocks them.
And while Kasich hasn’t completely dismissed the idea of some kind of response, his state’s GOP-led legislature was deeply skeptical of expanding Medicaid. If Kasich acts on his White House ambitions, he’s unlikely to push for anything that would create more Obamacare backlash.
States less likely to start state-run marketplaces: Alabama, Florida, Indiana, Kansas, Texas, Mississippi, Georgia, Louisiana, Oklahoma, North Carolina, South Carolina, South Dakota, Nebraska, Wyoming
And then there are the states where Obamacare is such a political liability that Republicans are likely to reject a state-run marketplace outright. The healthcare law is so deeply unpopular in these states that lawmakers are likely to spurn any involvement with it for fear of losing a primary election.
“They knew if they voted for [a state-run exchange], they would be primaried by the Tea Party and taken out,” Scully said. “If it looks, smells or resembles the Affordable Care Act in any form, they’re going to get the crap kicked out of them.”
One example is Florida, where more people stand to lose subsidies than residents of any other state. But given the legislature’s recent turbulence over expanding Medicaid — a move Gov. Rick Scott initially opposed, than supported, than opposed again — it’s unlikely lawmakers would be able to agree on running an Obamacare marketplace.
The same goes for most of the other Southern states, analysts say. “Texas and Florida and Mississippi and Alabama,” Pierce said. “It looks difficult for the political bodies to do anything.”
