Dive Brief:
- While Health and Human Services Secretary Sylvia Burwell has claimed that the Obama administration has no backup plan if the Supreme Court sides against subsidies in the states with federally-run marketplaces, not everyone is buying that, as Healthcare Dive has reported. Sources tell Forbes that the agency does have a "Plan B" for possibly getting around a negative verdict.
- Rep. Joe Pitts (R-PA) says he informed Burwell of a 100-page document that outlines numerous possible contingency plans, though Burwell has stated that she was not aware of the existence of such a document.
- Two sources familiar with the discussions at HHS have told Forbes that the "Plan B" is to ask states to declare that they are subcontracting their exchanges to HHS, in hopes that will technically count as "establishing" a state-run exchange.
Dive Insight:
If the court does strike down these subsidies, the question is whether it will then allow this Plan B to proceed.
As Forbes notes, the court could decide that such a move does not fulfill the requirement of an "exchange established by the State under Section 1311," which says that a state may "enter into an agreement with an eligible entity to carry out one or more responsibilities of the exchange," but adds that such an agreement would also need to meet certain specifications.
If that's the case, HHS may need to move on to another contingency plan.
However, as Forbes also notes, the court could decide to allow the plan, given that it would be an easy solution for states and for the court. "It's conceivable that the Court would indeed give states that easy way out, thereby making clear that if there is disruption in the healthcare markets, it's not because the Supreme Court caused it," writes Forbes contributor Avik Roy.