It received surprisingly little fanfare, but last week three states demonstrated how to "fix" the Affordable Care Act, should the Supreme Court rule adversely against a key provision within it. Arkansas, Pennsylvania and Delaware all received permission to set up state health insurance exchanges should subsidies be eliminated for those who participate through the federal government's ACA website.
We hope and expect that move will be unnecessary, but it was prudent nonetheless. The Supreme Court is set to issue a ruling this week in King V. Burwell, a case in which plaintiffs argue that an obscure provision of the ACA restricts Obamacare subsidies only to states that set up their own exchanges, not those that rely on healthcare.gov. Most legal experts are skeptical that the Supreme Court would make such a major decision based on an interpretation of one phrase in a massive bill that runs entirely counter to its legislative history. But it's hardly unimaginable given some past decisions by the court's conservative majority where hints of partisanship were clearly visible (Hobby Lobby, Citizens United and striking down the Medicaid expansion provision of the ACA, to name a few of the lowlights of the Roberts Court in which legal precedent appeared to take a back seat to ideology).
Congress could fix the whole issue in a day, of course, by passing legislation clarifying that insurance purchased through healthcare.gov should be treated the same as insurance bought in state-based exchanges. But most Republicans would view that simple patch as toxic even if it rescued 6.4 million Americans covered by Obamacare subsidies who might be denied them. Never mind that most of those people live in so-called "red" states with GOP majorities, putting Republicans in danger of facing an angry political backlash. Enabling Obamacare in any fashion — even if doing so would save many of their constituents from the hardship and financial ruin that might come from suddenly losing insurance coverage — would be seen as a non-starter by tea party conservatives.
That leaves the states where elected leaders have often proven themselves far more pragmatic than their counterparts inside the beltway. That Gov. Asa Hutchinson of Arkansas, a Republican and former member of Congress and Bush administration appointee, would put the welfare of nearly 70,000 state residents with subsidized insurance ahead of partisan politics is not terribly surprising given the practical nature of state government. But there are at least 30 other states that are less well prepared for an adverse court ruling.
That begs a question: If the Supreme Court does decide that only insurance secured through state exchanges can be eligible for subsidy, what might states that haven't created back-up contingencies — a Plan B — be able to do in short order? As it happens, that's an area where Maryland has some experience. As we have seen, creating an exchange from scratch is an expensive and difficult proposition, but piggybacking on the software developed by another state can be done relatively quickly and cheaply.
The attempt by former Gov. Martin O'Malley's administration to create its own website in the fall of 2013 failed badly, and officials decided a better strategy was to import technology already successfully operating in Connecticut and elsewhere. Voila. Problem solved in a matter of months and at a cost of tens of millions of dollars rather than hundreds. It wasn't an enjoyable experience — former Lt. Gov. Anthony Brown's role in that politically embarrassing debacle helped cost him the governorship in the last election — but it does provide a neat road map for other states.
For now, Maryland appears to be in a secure position no matter what the Supreme Court decides. Even an adverse ruling won't immediately bring down Obamacare altogether. The worst case scenario — loss of coverage for millions of Americans in states that refused to create state-based exchanges — doesn't apply here. And it's hard to believe that vulnerable states will do nothing when such an easy fix is not only available but entirely preferable to the potential horror that awaits.
However, if most of the federal exchange states fail to follow the lead of Pennsylvania, Delaware and Arkansas, it could eventually affect Maryland and every other state. The lack of subsidies would force many out of the insurance market and make other provisions of the ACA — like the end on lifetime limits on coverage or exclusions for pre-existing conditions — unaffordable. The problem would be most acute in federal exchange states, but some experts believe it would eventually spill over to places like Maryland as well.
It doesn't have to happen that way. Congress in its current composition may have proven itself incapable of acting rationally in this area, but most governors and state legislatures are not nearly so self-destructive or bone-headed. If the Supreme Court fails the country, it's most likely going to be up to the states to ride to the rescue.