GOP has to act quickly after Court rules on Obamacare

he Supreme Court holds the future of the Affordable Care Act in its hands. Later this month, the court will issue a ruling in King v. Burwell, a case challenging the legality of federal health insurance subsidies in 37 states. A ruling against the ACA could mean the end of the law as we know it.

The case presents a rare opportunity to reshape our health system for the better — but only if Republicans in Congress act quickly and strategically once a ruling is handed down.

If the court sides with the challengers, the GOP should seize the moment by advancing a comprehensive replacement to ObamaCare. If the ACA emerges unscathed, however, Republicans should pursue an ObamaCare overhaul through the budget process known as reconciliation.

The case against ObamaCare is straightforward. According to ObamaCare’s text, the federal government can only subsidize insurance policies purchased “through an Exchange established by the State . ..”

Most states, however, refused to create their own online marketplaces, choosing instead to use the federally-established exchanges. The challengers in King argue that subsidies in those states are, thus, illegal. If the Supreme Court agrees, roughly 8 million people in 37 states will lose their exchange subsidies.

Democrats have portrayed this scenario as a catastrophe that will leave millions of previously insured Americans without coverage. In fact, the effects may be far more muted.

According to a report by Douglas Holz-Eakin, former director of the Congressional Budget Office, about 74% of today’s exchange customers had insurance before ObamaCare. Without subsidies, these individuals will most likely buy coverage the way they did pre-ACA.

What’s more, a ruling for the plaintiffs would undo ObamaCare’s most economically devastating policies. The individual mandate — and its tax penalty for those without insurance — would disappear. The employer mandate would collapse in the 37 affected states — a development that will help create an estimated 237,000 new jobs.

This outcome alone counts as a victory for our health system and our economy. But ObamaCare’s opponents in Congress should be far more ambitious — and strategic — in their reaction to the King ruling.

Should the court strike down the premium subsidies, Republicans need to rally behind a conservative alternative to ObamaCare. Rep. Tom Price’s Empowering Patients First Act offers a good model.

The bill would repeal the ACA outright, and put in place a system of refundable, age-based tax credits for purchasing coverage. Individuals between 18 and 35 years old, for example, would be eligible for a $1,200 credit. Americans aged 50 and older would receive a $3,000 credit.

The bill also permits customers to purchase insurance plans outside of their state of residence, injecting a new degree of competition into the insurance market.

Of course, Price’s reforms are far from perfect. For instance, the refundable tax credits he envisions should be provided directly to individuals and families, and not channeled through insurance companies. That would effectively offer hardworking Americans a tax cut.

But taken together, the bill provides an effective strategy for lowering health costs and encouraging competition. It also offers Americans a clear, market-based alternative to the mandate-heavy vision of ObamaCare.

It’s possible, of course, that the Supreme Court will choose to leave the ACA intact. But such an outcome shouldn’t deter Republicans.

Now that they enjoy a majority in the Senate, Republicans have a chance to repeal ObamaCare through reconciliation. Under this budget process, lawmakers only need 51 votes to defund ObamaCare — and it can’t be filibustered. Back in 2012, Sen. Majority Leader Mitch McConnell promised to use it if given the chance.

Reconciliation isn’t as obscure as it sounds. Democrats used this procedure to pass ObamaCare back in 2010.

President Obama is certain to veto a repeal bill. But Republicans will have demonstrated that their party has ideas on how to fix our broken health system — unlike Democrats.

Americans are ready to end Obama-Care. A recent poll by McLaughlin & Associates discovered that 6 out of 10 Americans support replacing the ACA with a sensible conservative alternative.

No matter how the court rules this month, Republicans should use this opportunity to show Americans exactly what that alternative looks like.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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