Pennsylvania became the first state Tuesday to publicly put in motion a back-up plan to protect its federal health insurance subsidies in the event the Supreme Court dismantles a key part of President Obama’s health care law.
Tuesday evening, Democratic Gov. Tom Wolf announced the state this week had submitted an application to the federal government to take over the state’s federal exchange. The move would allow Pennsylvania residents to continue to receive federal subsidies towards purchasing health insurance if subsidies on the federal exchange are invalidated by a ruling in the King v. Burwell case expected later this month.
Pennsylvania would also need the approval of its GOP-led legislature if it wanted to set up its own exchange.
“There is no reason to deal with it right now,” Steve Miskin, spokesman for the state’s House Republicans, told the Philadelphia Inquirer.
In the Supreme Court case, the challengers contend that federal subsidies for health insurance in the 37 states where the federal government runs the health care marketplaces are invalid because of a few words in the law that say the subsidies are available for participants in exchanges “established by the State.” If the Supreme Court rules in the challengers’ favor, some 6.4 million Americans — including an estimated 382,000 Pennsylvanians — who are participating in federally-run exchanges are expected to lose their subsidies, potentially wreaking havoc on the entire private health insurance system.
Only 13 states and the District of Columbia have set up their own exchanges, with resistance largely stemming from Republican objections to the law. While some states have quietly discussed what to do in the event that the Supreme Court strikes down the federal subsidies, Pennsylvania is the first state to publicly announce its plan to apply to take over its exchanges, according to the Hill. Wolf had previously sent a letter to the federal Department of Health and Human Services suggesting he would be pursuing that option.
The governor said in Tuesday’s statement that the application for the state to set up its own marketplace does not necessarily mean it will do so.
“However, the responsible thing to do is set up a plan to protect hundreds of thousands of people and I look forward to working with members of the legislature to advance this plan if necessary,” Wolf said.
Teresa Miller, the Pennsylvania’s acting insurance commissioner, told the Associated Press that there were other reasons, aside from the Supreme Court case, for the state to consider running its own marketplace in the place of the federal “one-size-fits-all” exchange. She said if the state got federal approval, it could have its own exchange up and running within weeks or a few months, well before the fall’s enrollment period.
The federal government could still shoulder some of the responsibilities, according to the AP report, but if it did, it is unclear whether Pennsylvania would still be protected from the potential effect of the Supreme Court’s ruling in King v. Burwell.