- Three states have received federal approval for "back-up plans" in the event that the Supreme Court decides in favor of the plaintiffs in King v. Burwell, making premium tax credits illegal in the 34 states that rely on Healthcare.gov.
- Delaware and Pennsylvania have been "conditionally approved" to set up their own exchanges for both individual and small-group markets in 2016; Arkansas has been received approval to establish a state-based exchange for small groups in 2016 and individual consumers in 2017.
- Nevada, New Mexico and Oregon are also considering their own contingency plans should subsidies be disallowed.
At this point, it's pretty widely agreed-upon that setting up a state-based exchange is the only way to avoid losing subsidies should the Supreme Court decide in the favor of the plaintiffs. But that's hardly an easy switch—it's expensive, logistically complex and political. Several states that tried in the past to set up their own exchanges failed miserably (Hawaii most recently shut down its marketplace).
Some analysts have suggested that should the Court decide to disallow subsidies, it may put a stay on its decision to allow states time to set up their own exchanges—but some say they won't even try. South Dakota Gov. Dennis Daugaard wrote in a June 10 op-ed that the state couldn't plausibly create its own exchange without imposing undue costs on consumers. South Dakota, according to Daugaard, chose not to set up an exchange because cost estimates suggested it would be $45 million to establish and between $6 million and $8 million annually to maintain.
"If only it were so easy," Daugaard wrote, calling for a federal solution. "Creating a state-run exchange is not so simple as passing a law, signing a paper, or flipping a switch. It is an expensive and time-consuming process."