The Impending Republican Showdown Over Healthcare

The U.S. Supreme Court's ruling in King v. Burwell will force presidential hopefuls into the first big debate of the 2016 campaign.

Cliff Owen / AP

The early-going of the 2016 presidential campaign has been heavy on personality and light on policy. Thanks to the Supreme Court, that’s about to change.

If the five conservatives on the high court decide to invalidate the federal subsidies in Obamacare and throw both the healthcare system and Congress into a state of chaos, the candidates will face their first real-time policy test. That decision could come as early as Monday and is expected sometime before the end of the month.

Whether the government wins or loses in King v. Burwell, presidential contenders will likely have to ditch their platitudes when it comes to healthcare. “Repeal it” won’t suffice—either the law stays intact, and Republican candidates must begin to lay out their replacement plans, or millions of Americans could find themselves unable to afford insurance, necessitating an urgent response. “It’s obviously going to be a big foray into policy for these candidates,” said Doug Heye, a GOP consultant unaffiliated with any campaign.

In many ways, the political implications of the ruling are the reverse of the preferences for each party’s candidates. Democrats—including Hillary Clinton—are banking on the Court to preserve, for a second time, the most far-reaching piece of President Obama’s domestic legacy. Tossing the subsidies would cause the cost of insurance to skyrocket for millions of people, potentially unraveling the coverage expansion that was central to the Affordable Care Act. Unraveling the law is exactly what Republicans have been hoping for, at least in policy terms, but the immediate effect of knocking out the subsidies would expose, again, the GOP’s deep divisions on healthcare policy. Unlike the 2012 challenge against Obamacare, King v. Burwell doesn’t involve a major constitutional question—whatever havoc the Court wreaks will be up to the GOP-led Congress to fix.

That dynamic already has some Republicans on Capitol Hill dreading a favorable ruling from the Supreme Court, leading to Alice-in-Wonderland headlines like this one from The Hill: “Republicans Fear They Will Win ObamaCare Court Battle.” In more than five years since the Affordable Care Act was enacted, the GOP has been unable to coalesce around an alternative, although senior lawmakers have promised to respond quickly if the justices strike down the subsidies.

Candidates face a difficult set of choices. Should Congress restore the subsidies as President Obama will undoubtedly demand? Either restore the subsidies temporarily or provide similar government assistance as part of an off-ramp from Obamacare? Or stand by and do nothing to repair or sustain a law that Republicans have spent years trying to destroy?

To no one’s surprise, Ted Cruz has already staked out that final position. The Texas Tea Partier and presidential aspirant told Politico earlier this month he’d fight any plan by congressional Republicans to extend the subsidies into 2017, when they hope a new GOP president could replace the law entirely. RedState’s Erick Erickson is similarly urging candidates to use a Supreme Court ruling against the subsidies as an impetus to double down on the repeal message. In a post on Wednesday, he said Republicans should run ads in all 50 states blaming the debacle on the Democrats who wrote the Affordable Care Act: “They never read it, they rushed it through, and now you’re paying the price. Tell Barack Obama we need to repeal Obamacare and start over.”

Marco Rubio, a Cruz rival and Senate colleague, has endorsed the middle option, which is being hashed out in Congress by Representative Paul Ryan and others. Writing on his campaign website, Rubio said that while the ultimate goal must be to repeal and replace the entire healthcare law, “we must also recognize the reality that the ruling would leave millions without health insurance.” Without specifics, he called for providing “an off-ramp for our people to escape this law without losing their insurance.” Other leading hopefuls have been similarly vague. Scott Walker, the Wisconsin governor, has said if the Court throws out the subsidies, Congress “should fix it.” But he said nothing about how. Jeb Bush has said even less on the topic, and his aides declined an opportunity to outline his views.

For Hillary Clinton, a ruling against Obamacare would be a disastrous policy outcome, but it would give her an easy campaign message that would put her on the same page as the president: Congress should simply pass a one-sentence bill clarifying that the federal subsidies are available to anyone, not merely participants in state-run exchanges. Yet Neera Tanden, an informal Clinton adviser who is president of the Center for American Progress, predicted that Democrats would respond to an adverse Supreme Court decision with a much broader critique over the next year-and-a-half. “You would see really two strands of response,” she told me. “One is on the Affordable Care Act itself, and the other is on the role of the courts.”

Like most other Democrats, Tanden is doubtful that the Republican Congress would be able to pass anything acceptable to President Obama on healthcare, particularly in the short window available to prevent the significant fallout in the insurance market. Taking on the Supreme Court, then, would be another way to mobilize progressives who know that the next president will likely make multiple appointments to the bench. (By the midpoint of the next president’s first term, four of the nine justices will be 80 or older.)

The more complicated outcome for Clinton would be a victory for Obamacare. A favorable ruling won’t suddenly make the polarizing law popular, and she is likely to face pressure from the left to propose changes that will go further in expanding coverage and reducing costs. Her top Democratic rival at this point, Senator Bernie Sanders, has advocated a single-payer system, although it’s not clear that he will push it aggressively during the campaign. A Sanders spokeswoman, Lori Kearns, said that while the ACA was “a good first step,” he “strongly believes we must do more to expand healthcare access and affordability.” “Millions of Americans still do not have health insurance—in part thanks to Republican states who have refused to expand Medicaid—and millions more are encountering high out-of-pocket costs, including skyrocketing prescription drug prices,” Kearns said.

Clinton told the Des Moines Register that she’d propose fixes to Obamacare regardless of the Supreme Court ruling. One would seek to reduce deductibles and prescription drug prices, while another would address the “family glitch” that excludes some low-income people from subsidies. Those ideas, of course, would quickly become afterthoughts if the Court guts the law. Democrats in Congress—and by extension, Clinton—might have to decide what price they’d be willing to pay for a restoration of the subsidies. Republicans are already floating a plan that would extend them for two years—but only in exchange for a repeal of other key parts of Obamacare, like its coverage mandates on individuals and employers. (A competing House plan would reportedly give block grants to states for the purpose of aiding people who lost subsidies.) Will Democrats negotiate? Or will they leave Republicans squirming for a solution on their own? “Their side created this problem,” Tanden said, referring to the GOP-backed court challenge. “They need to fix it.”

No matter how the justices come down, the 2016 debate on healthcare is about to be joined.