NEWS

Ruling could remove subsidies for 200,000 Ohioans

Deirdre Shesgreen

WASHINGTON – Sen. Rob Portman and other Republicans have urged the Supreme Court to rule that federal health insurance subsidies, now flowing to patients in Ohio and more than 30 other states under the Affordable Care Act, are illegal.

The justices are scheduled to hear arguments in the case March 4, and GOP lawmakers see the legal challenge as a way to finally unravel Obamacare. But a ruling in their favor also could create a major political dilemma for the Republican-controlled Congress.

Such a decision would strip federal assistance from millions of Americans — including about 200,000 Ohio residents — leaving them scrambling to pay for insurance purchased through the federal health care exchange.

"Congress will have pressure to do something about that," said Ed Haislmaier, a senior research fellow in health policy at the Heritage Foundation, a conservative think tank in Washington. "The question will be, what?"

The legal dispute, King v. Burwell, centers on a few words in the 900-plus-page Affordable Care Act; the law says federal subsidies can be offered through a health care exchange "established by the state."

Portman and others argue that means only consumers who purchase insurance through a state exchange — not the federal exchange — can receive the subsidies, which come in the form of tax credits.

"Congress plainly indicated that the availability of premium subsidies would stop at state exchanges and not extend to federal exchanges," Portman and other Republicans wrote in legal briefs filed with the Supreme Court. "The executive branch, and the courts, are required to honor that choice."

When Democrats wrote the bill, they were encouraging states to set up an exchange through subsidies, said Rep Jim Jordan, R-Ohio.

"This is a bad law. It needs to be repealed," Jordan said. "This (Supreme Court ruling) could be the final thing that persuades Democrats to help us get rid of this thing."

Supporters of the law say the Affordable Care Act's authors never intended to prevent federal subsidies from flowing through the federal exchange.

The fight has significant implications, particularly in Ohio and 35 other states that declined to set up an exchange. Almost 235,000 Ohioans have used the federal exchange to buy coverage, with 84 percent receiving federal subsidies to help cover the cost.

"I expect to hear a large outcry from people, their families, and their health providers if this case goes the wrong way," said Cathy Levine, co-chairwoman of Ohio Consumers for Health Coverage. "It will create states of haves and states of have-nots, and Ohio will find itself in the have-nots."

States could try to quickly set up their own exchanges, but it's unclear whether that would fly in GOP-controlled legislatures that have resisted the law. In Ohio, GOP Gov. John Kasich has said his administration was looking at possible options if the court rules that subsidies are illegal for those buying insurance on a federal exchange.

"We haven't made any determination on that," Kasich told reporters in South Carolina last week. "But I've been able to have some really great people working on that. If the court makes a decision that these exchanges get shut down, then we're going to have to figure something out in Ohio."

Reps. Michael Stinziano, D-Columbus, and Nickie Antonio, D-Cleveland, want to create the Ohio Health Care Exchange with legislation they plan to introduce soon. Previously efforts to create a state-run exchange in Ohio were unsuccessful.

"We should not ignore the potentially devastating financial consequences for many Ohioans if the Supreme Court rules that they are no longer eligible for federal assistance in paying their health insurance premiums," Stinziano said in a statement.

But Rep. Bob Hackett, R-London, said Ohio researched the cost of running its own exchange and the price tag was substantial.

"The cost of maintaining that was not a minimal cost. It was many millions of dollars every year," said Hackett, who serves as chairman of the House Insurance Committee.

Other governors have made it clear they have no intention of drafting a backup plan. And with millions of Americans' health insurance in limbo, there will be a push for a solution from Congress. That would be Hackett's preference.

"There would be other states with the same problem. Maybe the solution would come from Washington," he said.

Then the question for Republicans in Washington, D.C., will be: Do they come to the rescue of a law they despise, or do they let the insurance marketplace go into a "death spiral," as some have warned would happen?

"We don't want to see people lose their health care, but we've said over and over Obamacare is unworkable and unsustainable," Rep. Pat Tiberi said in a statement. "Republicans are currently working on a patient-centered alternative to help people whose coverage may be jeopardized if the Supreme Court strikes down the subsidies, which they should based on a clear reading of the law. No one should lose their health care because of this poorly-written, poorly-executed law."

Both sides agree that if the Supreme Court rules the subsidies are illegal, it would blow a huge hole in the law.

"If premium subsidies are withdrawn from moderate-income people in approximately three dozen states, the impacts would be severe," Ron Pollack, executive director of the liberal consumer group Families USA, wrote in in a recent analysis. "Many millions of people would rejoin the ranks of the uninsured; premiums would increase enormously; and the non-discriminatory protections for people with pre-existing health conditions would be jeopardized and would probably become ineffective."

The easiest fix — passing legislation that clarifies that subsidies can go to those who buy insurance through the federal exchange — is a nonstarter for most Republicans.

"I believe Ohio and the American people deserve a better healthcare solution than Obamacare," said Rep. Steve Stivers, R-Ohio in a statement. "Congress must not only be ready to replace the current system in the event the provision is found unconstitutional by the Supreme Court, but should act as soon as possible to provide reassurance to our citizens that there is a better alternative."

Haislmaier, the Heritage Foundation researcher, said the case should be viewed as an opening for Republicans to revamp the law.

"It's an opportunity to revisit a lot of the overregulation on the insurance side and undue complexity ... of the subsidy design," Haislmaier said.

Portman said the GOP should push to repeal the law and replace it with "sensible reforms" to the health care system. But he did not endorse a specific replacement plan. And since the passage of the health law, Republicans have been unable to rally around a comprehensive health care proposal to swap out for Obamacare.

Earlier this month, Wisconsin GOP Rep. Paul Ryan, chairman of the House Ways and Means Committee, said he would craft a backup plan in case the court rules against the subsidies. But he seemed to talk more about what that Republican plan would not do rather than what it would do.

"The idea is not to make Obamacare work better or to actually authorize Obamacare," Ryan said, according to the Hill, a Washington newspaper.

Portman said for now, the burden is on the administration of President Barack Obama to prepare for chaos if the justices throw out the subsidies.

"I have repeatedly asked the administration whether they have any contingency plans in place if the Supreme Court rules against Obamacare in King v. Burwell, and there seems to be no plan," he said.

Levine said its "ironic" that Portman is pushing the Supreme Court to kill the subsidies and at the same time, pushing the administration to come up with a way to address the fallout if that happens.

"That makes no sense whatsoever," she said.

Levine said she didn't know what the right legislative solution is if the health law is undermined by the case. But she said she hopes lawmakers will put the polarizing politics of Obamacare aside if the court strikes down the subsidies.

"If we stop playing politics with the law, we could work on improving it because it's far from perfect," she said. "People's lives are at stake. These are real people with real health conditions who need coverage to pay for the care they need."

Gannett Ohio reporter Jessie Balmert contributed to this article.

dshesgreen@usatoday.com

Twitter: @dshesgreen