Vice President for Health Policy
House Republican leaders have shared with their members a proposal they plan to introduce if the Supreme Court decides in King v. Burwell to invalidate the federal marketplace subsidies, according to media reports (here and here). Although the plan is vague and the leaders won’t make it public until after the court decides, its centerpiece apparently is a temporary block grant for states. Even absent key details, the block grant proposal clearly isn’t viable. Overall, the plan represents more an unraveling of health reform than an actual, credible plan to ensure that subsidies remain available in federal marketplaces.
The plan would reportedly allow people who are in states using federal marketplaces and who are receiving subsidies through that marketplace to continue receiving them only through the end of this year; any new enrollees who would have been eligible for subsidies would apparently receive no assistance at all. Those states would then have the option to accept a block grant — a fixed amount of federal funding — to use however they want, with apparently few if any federal strings attached. The block grant would be available for only two years.
But the block grant idea is just a mirage. It’s hard to see how many, if any, states with a federal marketplace would provide meaningful assistance through the block grant to people who are now getting subsidies. By the time states could decide whether to accept the block grant, design a new program that it will finance, and pass a law to put it in place, much of the two-year period would be gone. And that doesn’t even count the time — perhaps years — it would take to get such a program up and running. Thus, the block grant proposal wouldn’t likely do anything to help the millions of people who would lose their subsidies in federal marketplace states.
Rather, the proposal is more designed to undermine health reform. It would immediately scrap the requirement that individuals have health insurance or pay a penalty — generating substantial coverage losses in all states as millions fewer people enroll in marketplace plans, job-based coverage, and public programs. Healthier and younger individuals would be much likelier to remain uninsured, leaving the pool of people enrolled in individual-market coverage less healthy — and hence more costly to cover. That would cause premiums to rise substantially, severely destabilizing individual markets inside and outside the marketplaces throughout the nation.
Finally, the plan reportedly may include a “sunset” provision for 2017. Assuming that means full repeal of health reform, all of the 16.4 million who have newly gained health coverage since its enactment would lose it in two years, and millions more who are expected to gain coverage in the future would remain uninsured.
Like other proposals from congressional Republicans in anticipation of the court decision, this vague proposal is really a plan to unravel health reform and reverse its historic progress in reducing the ranks of the uninsured.