Republicans Ask HHS, What If SCOTUS Guts Obamacare?

By Susan Jones | January 29, 2015 | 8:57am EST

A draft of the Patient Protection and Affordable Care Act. (AP Photo)

( - What will the Department of Health and Human Services do if the Supreme Court rules against subsidies for people who purchase their health insurance on the federal exchanges?

The House Energy and Commerce Committee, in a Jan. 28 letter to HHS, says the agency must start "preparing for the possible consequences of the Supreme Court's decision in the case of King v. Burwell." Democrats, meanwhile, filed a friend of the court brief Wednesday, arguing that critics of the law are wrong.

The Supreme Court will hear oral arguments in March on a simple question: Whether the Internal Revenue Service, by regulation, may extend tax-credit subsidies to people who buy their health insurance on exchanges established by the federal government, when the Affordable Care Act specifically authorizes subsidies for health coverage that is purchased through an "Exchange established by the State."

"As about 5 million individuals are estimated to have received subsidies through a federally established exchange, it appears that at least this many people could be impacted in some way by the Court's decision," says the letter signed by Committee Chairman Fred Upton (R-Mich.) and four other Republicans.

"Given HHS's responsibilities, we believe it is prudent that the department plan for the full range of potential outcomes and consequences of the Court's decision."

The Republicans specifically want to know what "contingency plans" HHS is developing in case the court strikes down the subsidies for insurance purchased on the federal exchanges -- a ruling that would gut the law.

In their friend-of-the-court brief, Democrats said Congress clearly intended for tax credit subsidies to be available to all qualified consumers purchasing insurance through exchanges set up by the states -- and by the federal government.

"Our amicus brief makes clear that the claims of the right-wing individuals bringing the King v. Burwell lawsuit are not based on the facts," House Speaker Nancy Pelosi said in a news release on Wednesday.

"As the brief explains, the text of the Affordable Care Act is clear: premium tax credits are available to all eligible Americans, regardless where they live. Also, the whole structure of the ACA is put together in a way to ensure access to quality, affordable health care for all Americans."

Pelosi said a ruling for the plaintiffs "would strip millions of Americans of health coverage, throw insurance markets into turmoil, and have widespread ripple effects." And that's exactly what the critics want, she said.

"I am confident that the Supreme Court will issue the only ruling consistent with the text and structure of the ACA: ruling that premium tax credits are available to every eligible taxpayer in the nation," Pelosi said.

As has reported, one of Obamacare's strongest advocates, economist Jonathan Gruber, may have undermined the law he helped to write with comments he made two years ago:

Gruber indicated that the law's several references to "State health subsidy programs" were a "political" calculation "to sort of squeeze the states" to set up their own exchanges.

"I think what’s important to remember politically about this is, if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits (subsidies)," Gruber said at a lecture in 2012. "But your citizens still pay the taxes that support this bill.

"So you’re essentially saying to your citizens, you’re going to pay all the taxes to help all the other states in the country. I hope that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges, and that they’ll do it."

As it turns out, 36 states did not set up their own health insurance exchanges. The federal government did it for them. And now the Supreme Court will decide if the IRS can fix the plain language of the law through a regulation making subsidies available to all qualified consumers, regardless of which exchange they use to buy their insurance.

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