York: GOP scrambles to keep Obamacare subsidies flowing in case of Supreme …

7 Mar 2015 | Author: | No comments yet »

As Supreme Court Weighs Health Law, G.O.P. Is Planning to Replace It.

On the docket was King vs. As the Supreme Court considers whether to restrict Obamacare subsidies, a new report seeks to refute the false perception that conservatives have not offered any credible alternatives. A leading tax expert says the Internal Revenue Service can, and likely will, let HealthCare.gov customers keep their Obamacare subsidies through the end of this year if the high court rules in June that those subsidies are illegal. The lawsuit asserts that the 2010 law bars health insurance subsidies for residents of three dozen states that relied on the federal government to set up their individual health insurance exchanges rather than doing so themselves. But the prospects of legal victory have also raised practical and political fears that Republicans will take the blame for the health care crisis that would follow.

And that six-month grace period in turn could ratchet up political pressure on Republican opponents of Obamacare to develop a plan to replace the valuable subsidies, which would be expiring right on the eve of the 2016 presidential primary season, instead of this summer. If the plaintiffs prevail, about 7.5 million residents of federal-exchange states would be at risk of losing their insurance because they depend on the tax subsidies to make their coverage affordable. President Obama and his supporters contend that the restriction is a simple linguistic oversight, but lawmakers who participated in the law’s creation said it was very much intentional. Should the Court invalidate subsidies for millions of policies purchased through federal health care exchanges, Congress will face significant pressure to create an alternative to Obamacare, and with newly minted majorities in both chambers, Republicans will bear the brunt of the responsibility. Experts predict that more than 8 million people would become uninsured next year after finding their plans too expensive without the subsidies, and after plan prices rise to compensate for the loss of customers.

Donald Verrilli, advised the court on Wednesday that it gets worse: Many would have to drop their coverage, leaving only the sickest residents in the insurance pool. Ryan of Wisconsin, Fred Upton of Michigan and John Kline of Minnesota, the chairmen of the powerful committees that control health policy, proposed what they called an “off ramp” from the Obama health act that would let states opt out of the law’s central requirements. The Post neglected to consider that such a ruling would leave Affordable Care Act subsidies subject to the whims of each new administration’s interpretation — hardly a reasonable course of action. That would raise the cost of insurance, driving even more people out and dooming the insurance markets in those states to “death spirals.” At oral argument, Justice Anthony Kennedy seemed disinclined to knock out the subsidies in those federal-exchange states. David Hogberg, health care policy analyst at the National Center for Public Policy Research, summarized a dozen free-market health care proposals — four advanced by Republican politicians and eight originating from conservative think tanks—that could end up performing that role. (RELATED: GOP Rumble Grows as Obamacare Legal Arguments Commence) “There are a lot of great ideas out there, from the Heritage Foundation and the Cato Institute to Rep.

If he joins with the four liberal justices known to favor the government’s position, the ACA will survive this latest — and possibly last — brush with judicial execution. A decision striking down the law as unconstitutional would have been vilified by President Barack Obama, Democrats and liberal mainstream media heavy hitters. His spreadsheet reveals areas of both consistency and variation between the plans, with some provisions that are widely shared and others that are unique.

Even a freshman, Senator Ben Sasse of Nebraska, proposed a major but temporary expansion of Cobra — the program that allows workers to extend their employer-based health benefits after leaving a job — to ensure that people do not lose insurance coverage as Washington rushes to find an alternative. Roberts decided that penalties to force people to sign up for insurance could be construed as a tax, and thus the law was constitutional under the government’s taxing authority. Political commentator Jonathan Chait has written that conservative healthcare proposals tend to reflect the “Heritage Uncertainty Principle,” a takeoff on the Heisenberg uncertainty principle of physics, which states that certain aspects of reality can never be determined. Don Susswein, a principal in the national tax practice of the consulting firm McGladrey, said that the IRS has a long-standing practice of giving grace periods to people affected by court rulings that say an IRS rule or regulation is illegal. “Generally speaking, regulations, rulings or positions are changed and struck down and invalidated all the time,” Susswein said. His point, referring to the right-wing Heritage Foundation, was that “conservative health-care policies do not exist in any real form” — they’re put forth only to counter whatever plan Democrats are offering, and they evaporate the moment anyone tries to take them seriously.

Aides to senior House Republicans said Thursday that committee chairmen were meeting now to decide whether a budget plan — due out the week of March 16 — will include parliamentary language, known as reconciliation instructions, that would allow much of a Republican health care plan to pass the filibuster-prone Senate with a simple majority. But if taxpayers have benefited from the IRS regulation before it was invalidated by the court, “it’s normal practice of theirs to tell the taxpayer that they can rely on [the struck-down regulation], even though it’s wrong.” “Perhaps the most high-profile example is when the U.S government took over GM [General Motors], or infused money into other corporations, tax lawyers would have told you that the tax losses of the ‘old GM’ could not be used by the ‘new GM.’ The statute is quite clear,” Susswein said. “But, of course, no one writing that law anticipated the dire straits of the Great Recession, or the need for an auto bailout. A $2,000 subsidy won’t cover that, but large HSA’s give people the option of not purchasing that policy, and instead paying their health care expenses independently.” (RELATED: Report: Premiums Rising Faster Under Obamacare Than Eight Years Before COMBINED) “King v. The health-care act says such subsidies go to those who buy insurance off an exchange “established by the state.” The problem for the law’s backers is that only 13 states and the District of Columbia established exchanges.

Importantly, in order to avoid massive disruption of recently completed bankruptcy proceedings, the plurality opinion, penned by William Brennan, only applied prospectively, and the judgment of the court was stayed until October, in order to allow Congress some time to revisit the statute. The latest GOP plans are a bit different; they’re more like Potemkin health plans, like the roadside Potemkin villages supposedly erected by Catherine the Great’s courtier Grigory Potemkin to give her a false impression of prosperity in the Russian countryside.

Most states opted out because the law has been unpopular thanks to the way it was muscled through Congress with only Democratic votes and the falsehoods that got it passed — if you like your insurance, you can keep your insurance, if you like your doctor, you can keep your doctor. Susswein, who previously was a Republican tax counsel for the Senate Finance Committee, said he expects the IRS would give those people only temporary relief. But by eliminating the requirements for businesses to offer insurance and for most people to have insurance, he added, “we could go into a death spiral in the individual insurance market because healthy people won’t buy it.” Republicans say they are ready for that argument.

He doesn’t expect the Obama administration would try to argue that the subsidies could be continued into 2016 for existing Obamacare customers who renew their current plans next year. In what is destined to become the most famous exchange of the session, he asked Verrilli: “You really think Congress is just going to sit there while all of these disastrous consequences ensue?” Verrilli replied: “This Congress, your honor?” (You can hear Verrilli’s disbelief, and laughter it provoked among court spectators, in the audio of the oral arguments posted on the court website; the exchange with Scalia starts at the 55:35 mark.) As for the proposals themselves, Sen. Obama’s health care program and a detailed, conservative alternative. “There’s an untapped discussion out there,” said Douglas Holtz-Eakin, a former Congressional Budget Office director who has advised Republican presidential candidates. “It’s coming.” For Republicans itching for that fight now, a Supreme Court decision for the plaintiffs in King v. Ben Sasse (R-Neb.) suggested in a Wall Street Journal op-ed last month that residents of the affected states be permitted to keep their subsidies for 18 months if the court rules against them. But Justice Antonin Scalia pointed out the unambiguous language, saying the law “means what it says.” What’s more, there’s evidence that the language was written to lure states into establishing exchanges.

Sasse, the Nebraska senator, the administration would probably appeal to the 37 governors and legislatures that have declined to build their own state exchanges, offering ways to put the exchanges in their states into compliance with the court’s decision. Several leading congressional Republicans, fearful that the GOP will be blamed for the subsidies disappearing and people losing insurance, have floated broad ideas on how to replace, at least partially, the tax credits now received by HealthCare.gov customers. Ted Cruz (R-Texas) offered a measure to repeal the ACA’s individual mandate, exchanges and subsidies, but to allow people to buy health insurance across state lines. This ancient GOP proposal would launch a race to the bottom in which health insurance would be offered only from states with the loosest, most industry-friendly standards. Twenty-three states currently served by HealthCare.gov filed briefs supporting the legality of the subsidies, Singh noted, which could suggest they would be more likely to open their own exchange.

The trio would keep the health law’s most popular elements: allowing children to stay on their parents’ policies until age 26, prohibiting lifetime coverage limits and protecting people with existing health problems. But if Chief Justice John Roberts is worried about the disruptiveness of ruling in the challengers’ favor, Alito’s approach may be enough to alleviate his concerns. For a couple earning $32,000, or about twice the federal poverty line, the GOP plan would slash the subsidy nearly in half, as Brookings Institution social insurance expert Henry J. Burwell, Republican leaders seem to have dropped the pretense that they’ll have even a transitional measure ready by June, when the court is expected to rule. “We’ll do our best,” Hatch said Thursday. “But we’ll have to see.” It’s the old bait-and-switch — but all bait, and no switch. Read his blog, the Economy Hub, at latimes.com/business/hiltzik, reach him at mhiltzik@latimes.com, check out facebook.com/hiltzik and follow @hiltzikm on Twitter.

The rest of us were smart enough to realize this was a fraud being perpetrated on the American people by a corrupt Administration and Democratic Party. If ever there was a time when the Majority Leaders of Congress needed to act like Reid and Pelosi, NOW is the time for Boehner and McConnell to get ruthless, just like their Democratic counterparts have been since 2006. Unless and until Democratic members of Congress get it through their thick heads that they, too, have been had by the Liberal left, veto proofing a repeal is impossible.

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