Burwell: There's no backup plan in subsidies case

HHS Secretary says adverse decision wold create massive damage to healthcare system

There is no backup plan to prevent millions from losing their health insurance if the Supreme Court decides to overturn a key provision of the Affordable Care Act that allows federal tax subsidies for health insurance, Health and Human Services Secretary Sylvia Mathews Burwell stated in a letter to lawmakers.

"[We] know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our healthcare system that would be caused by an adverse decision," Burwell wrote.

It's the first time she's been so blunt about the ramifications of an adverse ruling--previously, she'd just change the subject, according to The New York Times. But that was during open enrollment, when she wouldn't want to discourage people from signing up for coverage because of fears that it would only be yanked way, the publication reported. Now she's due to testify before Congress for the next two days.

The letter points to consequences if the subsidies are struck down: Millions of people unable to afford insurance coverage; healthy people less likely to buy coverage, leaving a larger pool of sicker people; and a return to more people using emergency rooms, which raises costs for everyone.

The case, King v. Burwell, centers on whether federal subsidies apply only to marketplaces established by the states. Only 13 states established their own marketplaces; the rest rely on the federal government's Healthcare.gov website. That means as many as 13.4 million people could lose their subsidies if the court agrees. 

Governors at last weekend's National Governors Association winter meeting were concerned the problem would fall in their laps, believing the federal government should offer some sort of interim fix. Many take a wait-and-see approach.

States that set up hybrid, state-federal partnership exchanges would have to determine whether it makes sense to set up solely state-run exchanges. Meanwhile, some states that run their own exchanges quesstion whether doing so is worth the hassle and cost.

To learn more:
- read the letter (.pdf)
- find the Times article

Related Articles:
Governors weigh options ahead of King v. Burwell
Hybrid states face challenges in light of King v. Burwell ruling
Panel: ACA will not disappear should Supreme Court side with King v. Burwell plaintiffs
State exchanges still plagued by financial challenges