With the fate of President Barack Obama’s top legislative accomplishment hanging in the balance, state officials are increasingly concerned by the administration’s refusal to discuss contingency plans for insurance markets, should the Supreme Court later this month strike down 2010 health care law subsidies for 6.4 million low- and middle-income people.
Officials in a variety of states, including many led by Republicans, say they are panicked by the uncertainty a ruling against the government in King v. Burwell could unleash. Justices are weighing whether the health care overhaul allows federal subsidies for coverage to be offered in all states, or just in those that, as the law states, are “established by the state.” Sixteen states and the District of Columbia have created their own state-run health insurance exchanges; the others that rely on the federal Healthcare.gov website to enroll people could see aid disappear.
State officials expected the administration to be publicly tight-lipped about the prospect of a ruling against the law. But some say they are surprised that, so far, the administration does not appear to be holding private discussions about how to address potential fallout. Affected states would have to address unique technical and legal quirks associated with covering their residents, as well as political obstacles.
“Whatever the administration might be doing in terms of backup planning, they are not talking to the states about it, and groups like us are not privy to it,” said Ron Pollack, executive director of the advocacy group Families USA, which supports the law. “The administration — and I really want to emphasize this — is confident that it will prevail in court and it doesn’t want to do anything to undermine that possibility.”
Governors would face enormous pressure to promptly respond should justices rule against the existing system for distributing subsidies. Although Supreme Court Justice Samuel A. Alito Jr. has suggested the court might carve out a grace period, health coverage for 2016 plan years must kick in on Jan. 1. State officials and health plans would have to scramble to come up with alternative coverage frameworks or risk letting people who lose subsidies become uninsured.
“For the governors, it’s a tough situation for all of them,” said Seema Verma, a consultant who advises seven states. “No one wants to see people lose coverage. ... What’s ironic is that there’s no discussion from the federal government to say, ‘Here’s our plan.’ Especially in the short-term situation, people are going to look to them to outline their plan and they have yet to do that.”
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