Alternate Obamacare plan in the works, say Republicans

Paul Ryan is developing an alternative to the current health insurance law if the Supreme Court strikes down subsidies, sources say.

Insurance News

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Rep. Paul Ryan is developing a backup plan to ensure all Americans have access to health insurance if the Supreme Court strikes down federal subsidies in certain states in June.

The Supreme Court is set to consider King v. Burwell, which challenges language in the Affordable Care Act does not make health insurance subsidies available to residents in states that did not create their own online marketplace. If the Supreme Court rules that way, 34 states would be affected.

The Republican congressman announced this week he is working on “an alternative system” with other members of Congress, and plans to introduce the plan by March 4—the same time oral arguments begin in the Supreme Court case.

Though reticent on details, Ryan said the plan would temporarily make subsidies available to residents in the affected states. Long term, he is looking at a full-scale replacement of Obamacare—a law he still opposes.
“It’s making people buy coverage they don’t need or want, it’s raising the cost of coverage, and then it’s just subsidizing that cost,” said Ryan.

He called the law “a long-term fiscal train wreck,” and said his plan would better support affordable policies while nurturing a competitive marketplace. He plans to introduce this replacement by 2016.

In the event subsidies are axed, health insurance could become unaffordable for the millions of Americans that rely on HealthCare.gov. The employer mandate could also be made void, as provisions in the law require employers to pay mandate-related penalties if, first, the employer fails to provide health benefits above a “minimum threshold,” and second, the employer has workers who receive a subsidy through the individual exchange.

Without subsidies available through HealthCare.gov, companies in the 36 states that use the federal exchange would effectively be exempt from the employer mandate. This would be true even if a company offered no plan at all to its workers.

And thanks to widespread Republican control of legislatures and governorships in affected states, many political pundits consider it unlikely new state exchanges will open to pick up the slack.

That could mean a return to the traditional, pre-ACA group benefits market.

“There was a pretty robust market for group benefits before the law,” Sinder observed. “I would imagine it would return to a similar state of employers looking at health insurance as kind of an adjunct benefit to the others they provide workers.”
 
 

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