GOP Weighs Response to Supreme Court’s Federal Subsidies Ruling

After the Supreme Court on Thursday ruled to uphold Affordable Care Act subsidies to help U.S. residents purchase coverage through the federal exchange, the GOP could turn to budget reconciliation as part of its efforts to repeal the law, National Journalreports (Scott/Johnson, National Journal, 6/25).


The subsidies were challenged in the case King v. Burwell, but the Supreme Court on Thursday voted 6-3 to uphold them. A ruling striking down the subsidies could have eliminated about $28.8 billion in subsidies to 9.3 million individuals in 34 states in 2016, according to an Urban Institute analysis. The ruling leaves the law on more stable ground for the remainder of President Obama’s time in office (California Healthline, 6/25).

Reconciliation Plans

In a budget resolution passed earlier this year, Republicans left open the possibility to use reconciliation to repeal major components of the law (National Journal, 6/25). The process allows legislation advance through the Senate on a simple majority vote (Ferrechio, Washington Examiner, 6/25). The process can only be used to target aspects of the ACA that address spending and revenue, meaning the technique could not uproot the entire law, but such an effort could render the law “unworkable,” according to National Journal (National Journal, 6/25).

Senate Majority Leader Mitch McConnell (R-Ky.) in the past has suggested using the procedure to repeal large pieces of the ACA, and he is expected to act on such proposals, according to The Hill. To date, 25 Senate Republicans have signed a letter calling for McConnell to target the law with reconciliation.

Meanwhile, House Speaker John Boehner (R-Ohio) has said that the House has not settled on whether or not to use reconciliation to target the law (Bolton/Sullivan, The Hill, 6/26). However, House Budget Chair Tom Price (R-Ga.) said, “I would anticipate that we would move in the direction of repealing all Obamacare that can be repealed through reconciliation” (National Journal, 6/25). Rep. John Fleming (R-La.) said, “An overwhelming majority of Republicans want repeal through reconciliation.”

However, not all in the party support using the procedure to target the ACA (Bade, Politico, 6/25). Some have said reconciliation could be better used on legislation that would likely receive presidential approval. President Obama would veto any effort to repeal the law while he is in office (National Journal, 6/25).

In addition, some Republicans are hesitant to repeal part of the law without a replacement ready. The potential cost of repeal also presents a concern (Politico, 6/25). A Congressional Budget Office report released last week found that repealing the ACA would increase the federal budget deficit by $137 billion from 2016 to 2025 (California Healthline, 6/22).

Nonetheless, Boehner said, “We will continue our efforts to repeal the law and replace” the ACA (Cornwell, Reuters, 6/25).

Ruling Protects ACA From Future Challenges

In related news, the high court’s ruling in King could help guard the ACA against future Republican challenges to the subsidies, the Washington Post‘s “Plum Line” reports.

The ruling was not based on the Chevron deference — the idea that the court should defer to a federal agency’s discretion when such an agency interprets an ambiguous law. Rather, the opinion held that the government’s reading of the law overall is correct, according to Yale Law School Professor Abbe Gluck (Sargent, “Plum Line,” Washington Post, 6/25).

Nick Bagley, an assistant professor of law at the University of Michigan, said, “It makes it impossible for a future administration to rethink the IRS’ rule” (Schencker, Modern Healthcare, 6/25).

Relief for Republicans?

In other related news, the decision to uphold the subsidies might have provided some relief to Republicans, who had not yet settled on a contingency plan if the court struck down the subsidies, the Wall Street Journal reports (Peterson/Stanley-Becker, Wall Street Journal, 6/25).

Heading into the ruling, the GOP had considered several contingency plans but had not settled on an official response (California Healthline, 6/17).

Rep. Scott Rigell (R-Va.) said, “The fact that the subsidies are going to continue, it does remove a massive logistical hurdle that would have faced this institution” (Wall Street Journal, 6/25).

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