King v. Burwell Backup Bill Introduced

As discussed in previous Alerts, the Supreme Court of the United States heard arguments in the King v. Burwell case in March and is expected to release its decision in June. PPACA clearly provides premium tax credits only for individuals enrolled through state-sponsored exchanges. There is no disputing the language of the bill or that of IRS Code §36B, added by PPACA. As it were, 36 states elected not to sponsor exchanges and deferred to the federal exchange option, IRS subsequently decided to allow premium tax credits in the federal exchange as well, deciding this was the intent of Congress. The King case (one of several brought in various federal courts) contends that premium tax credits are illegal in those 36 states. Should this decision go against the government, both the individual and employer mandates in those states would be nullified bringing a chaos in the health care arena. We also reported that Congress could easily fix the issue with a one-page technical corrections bill changing the language of the code section, if it were so disposed.

In anticipation of an adverse ruling in King – as a “plan B” – Senate Republicans introduced the Preserving Freedom and Choice in Health Care Act. This bill has 29 Republican co-sponsors including all Senate Republican leaders and the three announced Senate Republican presidential candidates. This Preserving Freedom Act would extend premium tax credits to those enrolled through through 2017 if the court rules in favor of the plaintiffs (leaving final disposition to the next Congress). Politically, one could argue this only makes sense with an election year upon us; that said party would not want to face voters being deemed responsible for the loss of tax credits for millions of voters. At first blush one would think there would be no reason that President Obama would decline to sign the measure, wouldn’t you think?

But – what all of the press announcements of the day failed to mention is that the Preserving Freedom Act also would repeal both the individual and employer mandates! We likely are on reasonably sound footing by suggesting that The president would not in fact sign this bill. Therefore, any trumpeting publicity you hear regarding this action is virtually irrelevant.

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