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Republicans Propose Block Grants If Court Strikes Down Affordable Care Act’s Subsidies

States would regain control of insurance markets

Republican leadership plans to hand control over health insurance regulations to the states if the Supreme Court knocks down the federal subsidies mandated by the Patient Protection and Affordable Care Act (PPACA), according to the Morning Consult: Health website.

The court is expected to rule any day in King v. Burwell, a case that challenges whether an estimated 6.4 million Americans can legally obtain PPACA insurance subsidies from the federal government.

Republican leaders in the House and Senate promised to have a plan ready if the court rules against the Obama administration, but closed-door briefings held on June 17 offered the first detailed explanation of such a proposal for rank-and-file members.

House Energy and Commerce Health Subcommittee Chair Joe Pitts (R-Pa.) said the plan would send money directly to the states and let them decide how to regulate their insurance markets. Under the PPACA, the federal government, for the first time, took up the mantle of regulating how insurers set prices for consumers.

Morning Consult first reported the potential block grant plan earlier this month. Modeled on the popular Children’s Health Insurance Program (CHIP), the plan would largely end the federal government’s role as an insurance regulator and give that power back to the states — along with a chunk of money to spend as they see fit on insurance coverage.

The plan was partly designed to carry along reluctant Republicans who want a total repeal of the PPACA and nothing more.

Rep. John Fleming (R-La.), a founding member of the conservative House Freedom Caucus, said the individual and employer mandates, which require people and companies to obtain health insurance coverage, would be repealed. After that, states could distribute the subsidy money for insurance coverage, minus whatever federal regulations they don’t want to keep.

“They can set up their own exchanges –– which would be a state exchange –– but it would not be subject to any kind of mandates or essential benefits or anything like that,” Fleming said in an interview.

In addition to the coverage requirements, the PPACA requires insurers to cover a comprehensive package of medical services, known as “essential health benefits.” The Act also limits how much insurers can charge someone based on their age.

After 2 years, the Republicans’ proposed program would “sunset,” and Congress could decide, like CHIP, whether they want to extend it.

Source: Morning Consult: Health; June 17, 2015.


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