Plenty of people have developed long-range proposals for killing the Patient Protection and Affordable Care Act (PPACA), replacing it, or tweaking it, by getting a bill, or a package of bills, through Congress.
The country may need a short-term fix faster than that if the U.S. Supreme Court rules against the Obama administration in the King vs. Burwell case.
The court will hear oral arguments on the case Wednesday and is expected to rule on the case by late June.
PPACA opponents say the U.S. Department of Health and Human Services (HHS) has no authority to provide PPACA premium subsidies for consumers in states with HHS-run exchanges. A ruling against HHS would not kill PPACA directly, but it would deal the PPACA commercial health insurance rules a devastating blow, by taking away the ability of moderate-income people in states with HHS exchanges to pay for individual medical coverage that meets PPACA coverage standards.
By taking young, healthy, moderate-income people out of the individual health insurance risk pool in those states, a ruling against HHS would probably make individual coverage unaffordable even for relatively high-income residents. If some sick people in the HHS exchange states moved to states with state-based exchanges to get access to premium subsidies, and PPACA-compliant plans sold without regard to the applicants’ health states, the flood of high-cost patients into states with state-based exchanges could destroy the individual major markets in those states, too.
Three top Republicans have proposed replacing PPACA with the Patient Choice, Affordability, Responsibility and Empowerment (Patient CARE) Act — a bill that would keep some popular PPACA provisions, such as some access to coverage on a guaranteed-issue basis, and a ban on lifetime benefits limits, but get rid of the individual coverage mandate.
Dr. Benjamin Carson, a possible 2016 Republican presidential contender, has proposed replacing PPACA with a health savings account-based system.
Louisiana Gov. Bobby Jindal, another possible 2016 Republican presidential contender, has said that, once Republicans kill PPACA, whatever comes next should look nothing like PPACA. “We don’t need Obamacare lite,” Jindal said, according to a Bloomberg report.
But, if the administration loses the case, whatever the U.S. health care system does in 2016, what does everyone do in late June 2015, while waiting for Congress to come up with a King vs. Burwell fix?
For a look at some of the proposals that have surfaced, read on.
1. The Supreme Court could include emergency relief in its ruling.
Even if the Supreme Court rules against HHS, and decides that HHS has no authority under PPACA to provide premium subsidies, it could soften the effect of the ruling on exchange plan issuers and enrollees.
The court could let HHS officials establish a transition plan for current enrollees, for example, or have the ruling apply only to PPACA exchanges that become HHS exchanges after a certain date.
2. HHS officials could try declaring that the current system will stay in place until the end of the calendar year.
HHS Secretary Sylvia Burwell and other HHS officials have refused to talk about whether HHS has any contingency plans in place that the department could use if the Supreme Court rules against it.
If HHS does lose, and the Supreme Court and Congress fail to give Burwell explicit authority to create a transition program, Burwell might be able to run with the ball, anyway, and use her regulatory authority to create an emergency fix.
For Puerto Rico and other U.S. territories, for example, HHS responded to the lack of territory access to the PPACA premium subsidy programs by freeing the insurers in those territories from the PPACA commercial health insurance coverage requirements.
But an emergency fix for the 50 states and the District of Columbia might be vulnerable to the same kinds of legal challenges that led to the King vs. Burwell case.
In practice, whether an HHS emergency fix would work might depend partly on how Republican voters and Republican governors react to the idea of a sudden (or, perhaps, retroactive) cancellation of the PPACA premium subsidy program in HHS exchange states.
3. States with state-based PPACA exchanges could discover that they have unexpected powers to perform subsidy magic in other states.
Charles Gaba, a PPACA supporter who edits the ACASignups.net blog, recently summarized three ideas he has seen for overcoming a Supreme Court ruling against the HHS ability to offer premium subsidies through its exchanges.
State governments that support the exchange program, or are willing to tolerate its existence, but simply don’t want to run an exchange could create an exchange domain name and go through a few other formalities, and then sign an agreement putting HHS or some other entity in charge of all exchange operations.
A state-based exchange, such as the Covered California exchange, could offer access to PPACA premium subsidy tax credits to residents of other states. One possible way might be for HHS to make out-of-state exchange tax credit access services available through HealthCare.gov, Gaba writes, citing a comment from a reader of his blog.
The precise language of PPACA may let one state create “a nonprofit entity that is established by a state,” and have that entity provide “state-based exchange” services for HHS in other states, Gaba writes, citing the Harvard Journal on Legislation.
4. The PPACA exchanges could at least let insurers update their 2016 exchange plan rate filings.
The American Academy of Actuaries (AAA) notes in a letter to HHS, covered by Bloomberg columnist Megan McArdle, that PPACA and state regulations would keep insurers from changing their 2015 rates, even if an adverse Supreme Court ruling took effect immediately, or retroactively,
The open enrollment period is already over, but some people will be eligible to sign up for exchange plan coverage through special enrollment periods (SEPs). A ruling against HHS that eliminated HHS exchange subsidies after July 1, or after a few months, could throw off the actuarial projections used to set premium rates for the SEP applicants.
Insurers are supposed to file exchange qualified health plan (QHP) rates for 2016 by May 15.
“Allowing contingent premium rate submissions and/or revised submissions would help mitigate the potential for inadequate 2016 premiums,” Catherine Murphy-Barron, an academy vice president, writes in a letter to Burwell.
5. Congress could create a temporary subsidy extension for the people who are now using PPACA exchange program subsidies.
Sens. Orrin Hatch, R-Utah, John Barrasso, R-Wyo., and Lamar Alexander, R-Tenn., have proposed in an op-ed in the Washington Post that Congress could protect HHS exchange subsidy users from a sudden loss of coverage by extending the subsidy until the end of the year.