GOP governor: States can’t ‘plausibly’ save ObamaCare subsidies

South Dakota’s governor has joined the growing list of Republican state leaders who say they’re counting on the federal government to have a plan if the Supreme Court rules against ObamaCare subsidies this month.

Gov. Dennis Daugaard said for the first time this week that “states like South Dakota could not plausibly” set up its own exchange in order to prevent people from losing their subsidies if ObamaCare loses in court.

Any “attempt to do so would impose significant costs on our insurance consumers,” he wrote in an op-ed for the Argus Leader on Thursday.

{mosads}The upcoming court case, King v. Burwell, will decide whether ObamaCare is allowed to hand out subsidies to states using the federal exchange, or only in exchanges “established by the state.”

South Dakota is among roughly 34 states that could be forced to set up their exchange or lose their subsidies. But Daugaard and other governors have said that at least some of the disruption could be prevented if Congress and the Obama administration take action.

“This is a federal problem that requires a federal solution,” Daugaard wrote.

Two states — Pennsylvania and Delaware — said last week they would launch their own exchanges if needed, to keep millions of healthcare dollars flowing after the decision. Both want to use existing pieces of the federal health insurance exchange, like its website and call center.

“I think that’s a pretty easy workaround,” Thomas Scully, the former director of the Centers for Medicare and Medicaid Services during the George W. Bush administration, said in a recent interview.

But Daugaard threw cold water on any plan that tasks a state with setting up an exchange.

“If only it were so easy,” he wrote. “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.”

He also pointed to a 2011 study when South Dakota decided not to set up an exchange after learning it would cost $45 million to establish and between $6 million and $8 million annually to maintain. 

The Obama administration has repeatedly said there is no “easy fix” if the healthcare subsidies are erased, but has promised to work with states and Congress to find a solution.

The prospects of that solution working in other states — particularly those with Republican leadership — is unclear, however.

A study of five other states that would be impacted by the decision — Florida, Michigan, New Hampshire, North Carolina and Utah — also found slim chances of any setting up the exchange.

“In each of the five states, political resistance to new exchanges is expected to be fierce,” according to the analysis by two healthcare law professors released Friday in a Washington Post op-ed. One, Nicholas Bagley, is a well-known ObamaCare supporter.

Republicans control at least one house in the legislature in all but three of the 34 states that use the federal exchange, their analysis found.