June 9, 2015

The Prime Perspective

Armstrong Robinson, Cary Gibson, Paul Brown

“Later this month, the Supreme Court is expected to issue a decision in King v. Burwell. The plaintiffs in the case are challenging the legality of tax credit subsidies for coverage purchased through federal healthcare exchanges established by the Affordable Care Act.  How would a decision in favor of the plaintiffs impact the congressional agenda this year?”

Cary Gibson

A ruling for the plaintiffs in King v. Burwell would upset the Congressional agenda for the rest of the summer.  Republicans would find themselves in the difficult position of having to legislate a fix to a law they despise.  The political fallout for the party if they fail to do so could be substantial, but disagreements within the party on a path forward may prove difficult to overcome. While President Obama may have to make some difficult choices to restore the subsidies, he is unlikely to do so at the expense of other, more essential pieces of the law, such as the individual and employer mandates, which are key to the consumer protections enacted by the Affordable Care Act.  States may also begin to take action.Three states-Pennsylvania, Arkansas, and Delaware-have already received approval from the administration to move away from their federally facilitated health care exchanges in 2016.

Paul Brown

A victory for the plaintiffs in King v. Burwell might add another ingredient to the big stew of time-sensitive legislative items that is starting to cook and may come to a boil in September.  Republican leaders will likely turn to reconciliation as the best instrument to channel the anti-ACA sentiments of their members. A reconciliation package, even with its’ procedural constraints, would probably still overstep what President Obama is willing to agree to-setting up high stakes negotiations as part of the FY 2016 end game.  If the ACA becomes a bargaining chip, other Democratic priorities, including non-health care items, may have to be sacrificed in order to save it.

Armstrong Robinson

A Supreme Court ruling against federal health care subsidies would produce legislative responses that would divide Republicans and unite Democrats, setting up another battle between those for whom the fight is most important and those for whom a solution is paramount. Some Republicans favor creating a wind-down of the subsidies to avoid pulling the ‘rug’ out from under people in exchange for changes to the ACA’s requirements (e.g. Senator Ron Johnson (R-WI) and W&M Chairman Paul Ryan (R-WI). Others from Senator Cruz (R-TX) to Representative Mulvaney
(R-SC) represent a significant block of votes in each chamber who advocate for allowing such a decision to stand and cripple the ACA – they hope, beyond repair. Either response would likely be met with near-unanimous Democratic opposition and a Presidential veto threat.  While there is no prospect of a successful veto override in the current Congress, the fact that opposition to the ACA or Obamacare has been a centerpiece of Republicans’ promise to their voters would require Congress to go through the motions.  It also means that to resolve the problem even through 2017 would require supporters of the ACA to make some concessions.