Ever since David King sued the federal government for illegally subsidizing health insurance payments on federal exchanges, governors in states with federal exchanges have scrambled to make contingency plans. Reactions ranged from Bobby Jindal of Louisiana consulting Congressional leaders on passing an alternative to Obamacare, to Governor Snyder of Michigan demanding his state’s legislature create a state-run insurance exchange in order to continue receiving federal insurance support. Fortunately, Congress is crafting contingency plans to offer immediate relief for millions of individuals currently receiving subsidies. These Congressional plans would grant states flexibility to determine the best insurance policies for their residents. This is an opportunity for Wyoming to make substantial health insurance reforms that lower premiums and expand coverage.
The proposals floated by House and Senate Republicans deliver the very sort of response Governor Matt Mead is looking for from Congress. During the final day of the 2015 legislative session, the Governor had this to say about King v Burwell:
“We are hopeful, and I think there is some reason to believe, that the supreme court will not say as of this date and time that it’s dead – the subsidies on the exchange – but will say this is wrong and it needs to be fixed and statutorily needs to be fixed and we’re going to give you, for example nine months, to fix that.”
At present, Republicans have released two proposals in Congress. Both proposals protect the estimated 8.8 million individuals currently receiving subsidies on the federal exchanges from financial disruption, and grant states the freedom to craft their own insurance policies.
The first bill, “Off-Ramp from Obamacare” sponsored by Representatives Paul Ryan (R-WI) and John Kline (R-PA) subsidizes means-tested individuals’ insurance purchases with refundable tax-credits. Ryan’s plan differs from Obamacare by giving states the opportunity to opt-out of Obamacare’s mandates and regulations. For states that do, individuals and business will be freed from the individual and employer mandates. People will be free to shop across states lines for their insurance needs, and most importantly, states will be free to reject the law’s community rating, age rating, and benefit mandates that have sent the price of insurance into the stratosphere.
A second bill, the Patient CARE Act, sponsored by Senators Richard Burr (R-NC), Orrin Hatch (R-UT), and Fred Upton (R-MI) is similar to Paul Ryan’s plan but has some notable differences. Like the Off-Ramp, it has means-tested tax credits for individuals. The individual and employer mandates would be stricken and the federal government could no longer decide the terms and conditions of insurance policies. What differentiates the CARE Act from the Ryan plan is that it makes tax-credits for private insurance purchases available to those eligible for Medicaid. Offering low-income individuals the option to opt out of Medicaid would not only improve their access to health care but also addresses our nation’s growing unfunded liabilities.
If one of these proposals passes both houses of Congress and is signed by the President, the question of how insurance is regulated will fall to our nation’s 50 governors and 7,383 state legislators. Once freed from the Obamacare straitjacket, Governor Mead and state legislatures would have the opportunity to repeal statutes that leave policy holders with fewer choices and thus make health insurance more affordable.