CNSNews.com is reporting that the House Energy and Commerce Committee has sent a letter to the HHS asking the agency to begin “preparing for the possible consequences of the Supreme Court's decision in the case of King v. Burwell" which will decide if the government can grant subsidies to consumers who buy insurance on federal rather than state exchanges.
According to Obamacare, the law clearly allows the granting of subsidies only to those consumers who buy insurance on state-run exchanges. Those who buy their insurance through any of the 36 non-state-run exchanges are not supposed to qualify, but because the insurance was so expensive, the Obama administration decided to extend the subsidies to everyone via a new U.S. Treasury regulation to be administered by the IRS.
This move led to a flurry of lawsuits, including Halbig v. Burwell, Pruitt v. Burwell, and Indiana v. IRS which are all related to the same issue as King v. Burwell – can the government extend these subsidies to everyone even though the law clearly states that only polices sold on state-run exchanges qualify?
The case will be heard next month in the Supreme Court and the Obama Administration is expected to argue that the language in the bill allows for a broader interpretation than what was written.
However, the facts are decidedly against the government in this case. There is plenty of evidence that the subsidy restriction was deliberate because the government was trying to force states to set up exchanges.
In fact, in January, 2012, Jonathan Gruber, a Massachusetts Institute of Technology economist who served as a consultant on the ACA has been videotaped saying: "... if your governor doesn’t set up an exchange, you’re losing hundreds of millions of dollars of tax credits to be delivered to your citizens."
He continued: “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."
Although Gruber later characterized his earlier statements as "a mistake", it’s clear that the intent of the restriction was to force states to set up the exchanges, which most decided not to do.
But where does this leave the millions of Americans who who are getting subsidies to help them pay for health insurance that would be otherwise unaffordable to them? Will they have to pay it back? Will they stop receiving a subsidy which could mean thousands and perhaps even millions would be left uninsured due to the high costs?
"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 a letter sent to the HHS by Committee Chairman Fred Upton. "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 Committee wants specific information on the contingency plan being developed by the HHS should the high Court strike down the subsidies. If they do so, this would essentially gut Obamacare, which means a plan needs to be developed and put in place in time for what is expected to be a June ruling.
In the meantime, Republican lawmakers have met privately to begin their own discussions about a contingency plan should the Supreme Court rule against the government.
The discussion was led by House Ways & Means Chair Paul Ryan (R-WI) and House Energy & Commerce Chair Fred Upton (R-MI), the aide said.
"We're obviously doing contingency planning for King v. Burwell," said House Ways & Means Chair Paul Ryan (R-WI) to reporters after the meeting. "It would be wrong not to. ... That's something that is an ongoing conversation and we're doing all of our diligence on that."
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