States, not Congress, will likely pick up slack after King v. Burwell

Leavitt Partners sees several options for states now on federal exchange

If the Supreme Court rules in favor of the plaintiffs in King v. Burwell, it will be up to either Congress or the states to tweak the Affordable Care Act, according to a report from Leavitt Partners.

Though the Supreme Court will decide the fate of the ACA, the Justices emphasized that it is not up to the courts to rewrite legislation, said the consultancy, formed by former Utah governor and Health and Human Services Secretary Michael Leavitt.

If the Court does rule that the insurance subsidies paid on the federal marketplace are not authorized by the ACA, as the King v. Burwell plaintiffs argue, one of two scenarios will unfold, the report said.

First, Congress could take action to amend the ACA. This seems unlikely, the report said, since the Republican party has voted more than 30 times to repeal the ACA. What's more, Congressional Republicans already are working on an ACA replacement plan, Reuters reported, though party leaders seem content to leave the issue to the 2016 GOP Presidential nominee.

It's more likely, then, that states will step in to forestall the King v. Burwell verdict, as FierceHealthPayer previously reported. In this case, the Leavitt report said, a few contingency options are likely for the 34 states operating on the federal marketplace:

  • The Centers for Medicare & Medicaid Services (CMS) could let states use the platform but require them "to assume or retain ownership and control of all other marketplace functions."
  • States could consider regional partnerships. Iowa Gov. Terry Branstand (R), for example, is open to building an exchange with neighbors Kansas, Nebraska and South Dakota.
  • States could adopt a multi-tenant shared service technology model. This so-called "Marketplace as a Service" would give states more autonomy than a regional partnership, the report said.
  • Finally, states could request what's called a 1332 waiver. This lets states "deviate" from the ACA if they can provide an alternate plan for achieving the "core aims" of the healthcare reform law. Leavitt said this would most likely in the states that have most "staunchly opposed" the ACA from the beginning.

The Supreme Court will hear the King v. Burwell case on March 4. While a decision is expected at the end of June, King v. Burwell is expected to define healthcare politics in 2015 and beyond.  

For more:
- read the report (.pdf)
- here's the Reuters article

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