Monday, April 27, 2015

Republicans Would Extend Obamacare Subsidies If the Supreme Court Strikes Down State Exchange Payments––But With Lots of Conditions

The Republicans should offer an unconditional subsidy extension if the Supreme Court strikes them down

Wisconsin Senator Ron Johnson (R) has offered a plan to extend the Obamacare state exchange subsidies into 2017 if the Supreme Court strikes them down this summer. The Republican Senate leadership is supporting his bill.

But Johnson has some pretty big conditions:
  • Existing subsidies in the federally run exchanges would continue until September 1, 2017.
  • The individual mandate would be struck down.
  • The employer mandate would also be repealed.
  • Obamacare's benefit mandates––the essential health package requirements––would be struck down enabling insurance companies to market any health insurance plans that complied under state law. 
  • Consumers could keep any pre-Obamacare policies still in effect.
  • The subsidy extension would not apply to new enrollees––just those individuals and families getting subsidies at the time the Senator's bill became law.
On the face of it, Republicans are smart to demand the most unpopular parts of Obamacare should be immediately scrapped.

But, Democrats just aren't going to go for this. They will point out that while the individual mandate was being struck down the guarantee issue provisions of Obamacare would still be intact leading to significant anti-selection and problems for the health insurance markets without at least a viable alternative to the individual mandate.
They will also point out that all subsidized enrollments in the federally-run states would be frozen resulting in people who would otherwise be eligible for coverage being prohibited from signing up for subsidized Obamacare insurance, including during the scheduled open-enrollments starting in late 2015 and late 2016.

In other words, this Republican strategy just takes us into another partisan pissing contest while regular people worry about the status of the insurance subsidies.

What would Democrats agree to? An unconditional extension of the subsidies into 2017.

If Republicans want to be seen as knowing how to govern I'm not sure why Republicans don't just offer that.

I will suggest the worst case political scenario for Republicans come 2017 is that they will still hold the House of Representatives and they will have precluded Democrats from getting a filibuster-proof 60-votes in the U.S. Senate.

By unconditionally extending the subsidies into 2017, any Supreme Court decision that went against the new health law would have to be fixed by the new Congress and President in 2017. The law would have to be redone––no avoiding it. Holding the House and having filibuster leverage in the Senate would be one heck of a lot better position than Republicans were in when Obamacare first passed. Republicans would have enormous leverage to reshape health insurance reform into something that was truly bipartisan.

The best case scenario for Republicans in 2017, especially if they don't throw 8 million people off their subsidies by not fixing this, would have them capturing the White House, holding the Senate and keeping their big majority in the House putting them in the driver's seat to redo health insurance reform in the face of a Court decision going against the law.

If the current Republican majorities in the House and Senate sent President Obama an unconditional extension of the subsidies he would be hard pressed to block it unless he wanted Democrats to be responsible for the potential mess a Supreme Court decision would create. By offering an unconditional subsidy extension into 2017, the Republicans would suddenly hold the high ground over any subsidy loss that could otherwise be a huge negative issue for them.

What puts Republicans in a better position for the 2016 elections?

Bickering with Democrats over the conditions of a subsidy extension while people worry?

Or, taking the anxiety over this issue away and potentially making Obamacare an unavoidable 2016 election issue while guaranteeing an Obamacare do-over in 2017 on far better ground than they stood on in 2010?

Talk about making lemons into lemonade.
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