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Senate Republicans back health insurance subsidies — for a price

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More than half of Senate Republicans are co-sponsoring legislation that would temporarily extend premium subsidies to those obtaining health insurance in the federal exchange if the Supreme Court strikes down the subsidies under the health care reform law, while the measure also would end the employer and individual mandates.

The legislation, S. 1016, introduced last week by Sen. Ron Johnson, R-Wis., and co-sponsored by 31 GOP senators, relates to a key case awaiting a ruling by the Supreme Court: whether the health care reform law limits subsidies for lower income individuals to those obtaining coverage in exchanges established by the states.

Rules issued by the IRS in 2012 extend those subsidies to eligible individuals seeking coverage in state and federal health insurance exchanges. Lower courts have split on whether the health reform law authorizes the subsidies only to those obtaining coverage in the state exchanges.

If the high court overturns the IRS rules, limiting the subsidies to state exchanges, Sen. Johnson's bill would continue until August 2017 the subsidies for those now receiving coverage in the federal exchange. More than 8.8 million U.S. residents have enrolled in plans offered in the federal exchange, with 87% eligible for a federal premium subsidy, according to the Department of Health and Human Services.

In exchange for a temporary continuation of those subsidies, the legislation would end both the law's individual and employer mandates, in which individuals who do not enroll in a plan and employers — except smaller firms — that do not offer coverage are hit with financial penalties.

“This bill is a transitional response that rescues Americans from the coercive nature of Obamacare, which is an unnecessarily complicated scheme that should not be resuscitated,” Rep. Johnson said in a statement.

It is unlikely lawmakers will take up the measure until after the Supreme Court rules on the state vs. federal exchange issue.