As they grapple with the potential fallout of a Supreme Court ruling that could strike down health insurance subsidies for millions of Americans, Republicans may expend a limited legislative tool to pass a bill to keep subsidies flowing without having to find new offsetting spending cuts.
In the case King vs. Burwell, challengers argue that the text of President Obama’s healthcare law restricted subsidies to those who purchase health insurance policies on exchanges set up by their states, rather than by the federal government. If the justices side with challengers in the case, Republicans will face a dilemma.
On one hand, they will be under tremendous political pressure to find a way to make sure that people who have been receiving subsidies don’t lose them. On the other hand, they’ll be under pressure from fiscal conservatives to avoid spending billions of dollars to help “fix” a problem that they argue would have been created by the text of Obamacare.
Enter the parliamentary maneuver known as reconciliation, which gives Senate Republicans an opportunity to use the annual budget-writing process to pass tax and spending-related legislation with a simple majority, as opposed to the 60-vote margin that’s typically required to overcome a filibuster.
Lawmakers face many competing priorities for which they would like to use the tool.
But a contingency plan for a victory for the plaintiffs in King v. Burwell is at the top of the list because of the budgeting implications.
If a contingency plan is passed now, the Congressional Budget Office will score it relative to the current state of affairs in which the healthcare subsidies in question in the case are still in place.
If lawmakers wait until after the decision is handed down, however, the CBO will no longer assume that the subsidies are valid, meaning that Congress would have to pay for their legislative response for the people losing subsidies by cutting spending elsewhere or increasing the debt.
The King v. Burwell decision is expected by the end of June, meaning that time is a factor for Republicans, who lack a filibuster-proof majority in the Senate.
Republicans have been publicly divided over the use of the reconciliation procedure, which is limited in its scope by law and parliamentary procedure.
Many GOP lawmakers have pushed for the tool to be used to put legislation repealing Obamacare on the president’s desk — among other priorities to fulfill campaign promises to repeal and replace the health care law.
But Bill Flores, a Texas congressman who heads a caucus of House conservatives who have sought to pressure budget negotiators to focus on repealing Obamacare, said that he would go along with using reconciliation to pass a King v. Burwell contingency plan.
“If we make the decision as a conference that we need to build the bridge, then we ought to use reconciliation to do that,” Flores said. Republicans have been using the term “bridge” to describe various proposals that would maintain subsidies for a limited period of time, with the hope that by 2017, a Republican president would be in office who could sign a more comprehensive replacement to Obamacare.
Flores said that he favored using reconciliation to pass a repeal of Obamacare, something that he and Sen. Mike Lee of Utah pushed for Friday.
He would “hate to do a bait and switch on the American voter,” he said, mentioning Republicans’ campaign promises on repealing Obamacare.
Nevertheless, he acknowledged the logic of using reconciliation to pass a King v. Burwell contingency plan, noting a conversation he’d had with Rep. Paul Ryan of Wisconsin regarding the Budget Office’s baseline. Ryan is the former chairman of the Budget Committee, which is responsible for the reconciliation process, and the current chairman of the Ways and Means Committee, which has jurisdiction over health care.
A spokesman for Ryan said that using reconciliation for King v. Burwell is “one option on the table,” but declined to say whether it would be prioritized specifically to take advantage of higher baseline spending on health care subsidies.
Ryan has pushed Republicans to have legislation in place by the time the decision is handed down providing for an “off-ramp” from Obamacare. He’s said that having a response ready is the “responsible thing to do.”
Representatives for the Senate and House Budget Committees were not able to respond to requests for comment Monday.
If the plaintiffs in King v. Burwell prevail, federal subsidies for health insurance through federal exchanges would be eliminated in up to 37 states.
An Urban Institute analysis found that 9.3 million people would be affected, losing federal benefits amounting to $28.8 billion in 2016. Depending on their contingency plan, Republicans would have to make up for that amount elsewhere in the budget in order to pass legislation responding to King v. Burwell to avoid adding to the deficit.
Republicans have not filled out the details of a contingency plan, but key legislators stated their support for a bridge that would keep those individuals from having their insurance cut off while providing for eventual passage of a Republican alternative to Obamacare.
