By Steve
Davis - March 17, 2015
For the record, I don’t think the
Supreme Court will decide only state-based exchanges can distribute federal
premium subsidies. The court had its chance to strike down the individual
mandate in 2012 but didn’t.
But if I’m wrong, will a decision
against HHS mean the end of public insurance exchanges and an unraveling of the
Affordable Care Act (ACA)? Probably not. But it certainly would force Congress,
state lawmakers, HHS and insurance carriers to do some serious scrambling this
summer. In the absence of a stay, subsidies, which are distributed monthly to
carriers, would dry up almost immediately if the court determines federally run
exchanges can’t legally distribute them. If the verdict comes out in late June,
as expected, it’s unlikely Congress would be able to agree on a solution before
heading out of Washington for summer recess.
Here are a few scenarios that could
play out:
· Congress votes to amend the language of the
ACA allowing subsidy distribution to remain as is.
· Congress creates a bill allowing federal
subsidies to continue IF the individual and/or employer mandates are
eliminated.
· Congress blames the problem on the
administration and the former Democratic majority…and goes on vacation.
· HHS allows carriers to submit alternate 2016
rates to account for the healthy population that drops coverage. Most carriers
drop out for the 2016 plan year.
· HHS releases a rule allowing early use of the
ACA’s 1332 waivers, which give states some flexibility to come up with their
own strategies to reform insurance markets.
· State legislatures hold emergency sessions
and vote to allow a transition to a federally supported state marketplace
model.
What do you think? Will the Supreme
Court rule against HHS in King v. Burwell? If that happens…what happens next?
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