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Lawmakers optimistic about Vermont’s health exchange as Obamacare ruling nears

By   /   June 19, 2015  /   News  /   No Comments

Photo by EJI.org

NO MORE SUBSIDIES?: An imminent U.S. Supreme Court decision on King v. Burwell will decide if states without state-run exchanges can continue receiving federal subsidies under the Affordable Care Act.

By Emma Lamberton | Vermont Watchdog

No matter how the U.S. Supreme Court rules on the King v. Burwell challenge to the Affordable Care Act, Vermont lawmakers say they are optimistic about their state’s health exchange.

King v. Burwell has the potential to end Obamacare — and all because of four words: “established by the state.”

Since the Affordable Care Act became law, federal subsidies have gone to all 50 states, enabling millions of Americans to carry otherwise unaffordable health insurance. Plaintiffs argue some of those subsidies are illegal, citing a section of the law that says subsidies apply only to people who enroll through exchanges “established by the state.” They argue states without their own exchanges aren’t eligible for Obamacare subsidies.

Defenders of subsidies for all 50 states consider those four words a “typo.” They argue that while this section of the bill was poorly worded it does nothing to change the overall intent of the law, which is to establish a federal health-care program.

“As I understand it, this is the key part of the Affordable Care Act. If this piece goes away, for all intents and purposes, the major aspect of the law has been gutted,” state Rep. Robert Bancroft, R-Westford, told Vermont Watchdog.

Bancroft, a member of the House Committee on Health Care, said the case is significant because the Affordable Care Act may not be able to function if only some states participate.

Since Vermont is one of 17 states with a state-run exchange, King v. Burwell probably won’t affect the continued flow of federal subsidies to Vermonters. But lawmakers admit financial and technical problems plaguing Vermont Health Connect have raised questions about whether Vermont should continue to run its own exchange.

“I think there’s a strong consensus that Vermont really would not want to go to a 100 percent federal exchange,” state Rep. Anne Donahue, R-Northfield, said.

Donahue, ranking member on the committee, and Bancroft are meeting with the committee several times this summer to discuss state options should Vermont Health Connect be forced to shut down this fall. Though the legislative session does not begin until January, the Health Committee is prepared to pull the plug on VHC .

“We set up a series of contingencies,” said Donahue. “If certain things don’t happen, it delegates to the Fiscal Committee and the Health Reform Oversite Committee the authority to direct us to start (shutting down VHC).”

Aware that King v. Burwell could cripple Obamacare, some lawmakers are calling on Congress to fix the “typo” and solidify the Affordable Care Act. U.S. Sen. John Barrasso, R-Wyoming, told Politico earlier this month Congress has no plans to do so.

“Let’s be clear: If the Supreme Court rules against the administration, Congress will not pass a so-called one-sentence fake fix,” Barrasso has said.

Bancroft said that result may be fatal for the law. “If Congress says, well basically, the law has been gutted and we’re not going to do anything to repair it, several pieces of it will die. One wonders if it will just limp along with what little is still in existence, or if there will be a push to totally eliminate the law.”

According to a poll released Tuesday by the nonpartisan think tank Foundation for Government Accountability, people who enrolled through the federal exchange, Healthcare.gov, generally don’t want Congress to restore subsidies — should judges decide in favor of the plaintiffs. The poll, which surveyed 715 federal exchange enrollees, also found a majority don’t want states to establish their own exchanges, even if the Supreme Court determines their subsidies to be illegal.

The poll uncovered other details about Obama’s impact in recent years. About 46 percent of enrollees said they were insured before Obamacare, and another 65 percent said they were forced to get on the federal exchange by unforeseen consequences of Obamacare — whether because of dropped coverage by an employer, cancellation of plans or skyrocketing premiums. Just 21 percent say they voluntarily switched to the exchange.

Regardless of the verdict, Vermont will need alternative health-care models if VHC fails to dig itself out of a hole resulting from years of manual fixes, security shortcomings and bad contractual negotiations.

“An alternative might be a collaborative with a couple of other states,” Donahue said. “That would still be a fully state-run exchange, and that wouldn’t create a problem (if the court rules against Obamacare).”

Donahue said she had high hopes for a state-controlled system that partners with the federal exchange to handle its technical aspects, but she added it’s too early to tell what backup options the state might pursue.

Contact Emma Lamberton at [email protected]

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Emma Lamberton is Vermont Watchdog’s health care and Rutland area reporter. She has written for the Rutland Herald and Times Argus, two of Vermont’s largest newspapers, and her work has published in The Washington Times, FoxNews.com and a number of local Vermont newspapers. She is also a member of Investigative Reporters and Editors. Emma is always looking for new stories. Readers are encouraged to contact her with tips and story ideas.