Former Bush officials map out ObamaCare backup for states

If the Supreme Court rules against ObamaCare this month, states will have more power to demand major changes to the healthcare law.

And a group of former Bush administration health officials have outlined what they think should be the terms of that grand bargain.

People in at least 34 states could lose their healthcare subsidies because of the upcoming King v. Burwell decision. If that happens, there’s “considerable risk that Congress and the president will reach an impasse on how to remedy the dilemma,” according to a study released Monday by six former Bush officials, led by his one-time health secretary, Michael Leavitt.

{mosads}Instead, they say governors and state lawmakers should demand to “dramatically simplify” the rules for marketplaces established by the Affordable Care Act.

The central question in King v. Burwell is whether customers can receive insurance subsidies under the law if their states don’t run their own healthcare marketplaces, also known as exchanges.

Most states have chosen not to run their exchange, deferring to the federal government because of the steep startup costs and, often times, a lack of political willpower to do so.

If the court strikes down the subsidies, the former Bush officials argue all states should find ways to restore that federal aid, even if it means launching a state-run exchange.

“Doing nothing has both political and humanitarian consequences that should be unacceptable to public officials,” the group writes.

Several Republicans in Congress, as well as GOP state leaders, refuse to support any contingency plan that they believe would be seen as backing ObamaCare, which would include setting up exchanges or giving an extension for the subsidies.

But the former officials say states will be able to keep their subsidies flowing and minimize the political fallout if they press the federal government to let them create their own state-based marketplaces — but with significantly more flexibility.

“We believe states could petition the Secretary to provide the flexibility that is necessary to rapidly establish state-based solutions. This would also allow states to maintain control of insurance markets,” Leavitt, who is also a former governor of Utah, said in a statement.

The officials say states should push the Obama administration to cut back the requirements for setting up a state exchange, such as allowing states to pool together resources and staff, eliminate the need for a governing board and allow for more private partnerships.