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Legislators reveal fallback plans from Supreme Court's premium subsidy ruling


A U.S. Supreme Court ruling on the legality of government regulations allowing premium subsidies to eligible individuals obtaining coverage in the federal health insurance exchange is not expected until the end next month, but elected state and federal lawmakers already are drawing up contingency plans in case the rules are overturned.

In the latest development, Pennsylvania officials earlier this week said they intend to set up a state health insurance exchange if the high court ruling in King v. Burwell strikes down IRS rules that authorize federal premium subsidies to lower-income uninsured individuals obtaining coverage in the federal exchange.

“In order to protect 382,000 Pennsylvanians from potentially losing subsidies that help them afford health care coverage, I have written to the federal government outlining a contingency plan to set up a state-based marketplace to ensure that no one loses their health care coverage,” Pennsylvania Gov. Tom Wolf said in a statement.

Earlier, more than half of Senate Republicans signed on as co-sponsors of legislation introduced by Sen. Ron Johnson, R-Wis., 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 coverage mandates.

If the high court overturns the IRS rules, limiting the subsidies to state exchanges, Sen. Johnson's bill would continue the subsidies for those now receiving coverage in the federal exchange until August 2017.

In all, 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.

Given those large numbers of enrollees in the federal exchange, it is easy to understand why regulators and legislators — fearful of a political backlash — are leading the charge to continue, at least temporarily, the subsidies in the event the high court invalidates them.