To see how conflicted Republicans are over Obamacare’s insurance subsidies, just look at Louisiana.
The state’s governor, Bobby Jindal, insists retaining any part of the healthcare law is a concession to Democrats. But its freshman senator, Bill Cassidy, has written a plan to keep the subsidies permanently for poor people if the Supreme Court blocks them this summer.
“There will be people — real people — whose lives will be affected,” Cassidy told the Washington Examiner on Tuesday. “Sitting idly by while they lose their health coverage — that is not an option for me.”
Cassidy and Jindal’s differences over how to respond to the King v. Burwell case are reflected on a larger scale in Congress, where the GOP is struggling to agree on a response should the court rule the subsidies illegal in Louisiana and the other 36 states relying on healthcare.gov.
The dispute is over a few lines of text in the Affordable Care Act which refer to subsidies flowing to states running their own insurance marketplaces. The challengers argue that excludes federal-run marketplaces, but the Obama administration disagrees.
Tea Party Republicans are likely to resist efforts to reinstate the subsidies, viewing it as a concession to Obamacare. But party leaders feel they ought to do something in case the subsidies are struck, although President Obama would likely veto a continency plan if it also undermined the law in other ways.
Of the 12 million or so people who bought plans in the new marketplaces, the vast majority used federal subsidies to help purchase them. A court decision striking them down would be a major blow to advocates for the healthcare law, who have lauded them for making insurance affordable to millions of previously uninsured people.
That’s also untenable to Cassidy, who’s a gastroenterologist.
“I’m a doc,” he said. “I know that what you and I are speaking of is not an abstraction.”
Jindal, who’s eyeing a presidential bid, introduced his own healthcare proposal last year. He has said that Congress, rather than passing an interim plan, should repeal the healthcare law and pass an alternative along the lines he outlined. It might mean low earners lose their subsidies this summer, but he insists that any alternative should focus on reducing costs rather than expanding coverage.
But to Cassidy, that could leave the poor in the lurch, especially if they’re facing a serious disease and find their plan cancelled because they couldn’t pay the premium.
“Doesn’t help you if you’re in the middle of therapy,” Cassidy said. “We want to preserve that coverage. The president put them in this fix by implementing the law illegally, but we are not going to sit idly by.”
Rep. Paul Ryan and Sen. Orrin Hatch are working on response legislation to keep the subsidies flowing, at least for a while. But in legislation he plans to introduce soon, Cassidy aims to preserve the subsidies long term while repealing some but not all of the healthcare law.
In the Cassidy plan, the subsidies would be awarded directly to consumers through health savings accounts instead of being paid to insurance plans. States could opt to receive the funds as a block grant or they’d continue in the form of federal tax credits.
Instead of basing the subsidies on income level, as the healthcare law does, they’d be pegged to the consumer’s age. Anyone without employer-sponsored insurance or a government healthcare plan would be eligible.
The plan would also ditch the law’s big insurance regulations including its actuarial and essential benefits requirements and repeal both the individual mandate to buy insurance and the employer mandate to offer it. Instead, states could choose for consumers to be automatically enrolled in catastrophic coverage unless they actively opted out.
The bill hasn’t yet been scored by the Congressional Budget Office to show how much it would cost. Cassidy says it would be paid for using the healthcare law’s subsidy dollars plus funds unclaimed by states for Medicaid expansion.
Cassidy envisions his plan kicking in fully in January 2017, requiring that it be coupled with another transitional plan to keep subsidies flowing in the interim. He acknowledges there’s a chance a potential Republican president could still work with a GOP-led Congress to repeal the entire law by that point — but feels it’s important to work within the law right now.
“If we want to repeal and replace the whole thing, let’s do it,” Cassidy said. “But what are we doing the next 18 months?”
