Burwell: No backup plan for uninsured if tax credit case loses

WASHINGTON – The Obama administration said Tuesday that it will offer no policy alternatives if the Supreme Court rules that federal tax credits used to purchase marketplace health insurance can only be offered in states that operate their own exchanges.

Tuesday’s announcement by Health and Human Services Secretary Sylvia Burwell means a high court decision in favor of the plaintiffs in the upcoming King v. Burwell case would strike a crippling blow to the Affordable Care Act, President Barack Obama’s legacy-defining health care law.

An administration defeat would cause an estimated 9.3 million people in the 34 states that use the federal HealthCare.gov website to lose their tax credits, according to estimates by the Urban Institute, a liberal think tank. Some 67 percent, or 6.3 million of these consumers, would ultimately become uninsured.

Burwell, in a letter to Senate Health, Education, Labor and Pensions Committee Chairman Orrin Hatch, R-Utah, said the administration’s hands were tied.

“We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision,” Burwell wrote.

Oral arguments are set to begin March 4 in the King v. Burwell case. The plaintiffs argue that the law prohibits payment of premium tax credits and cost-sharing reductions to consumers in states that haven’t set up their own insurance marketplaces.

Only 16 states and the District of Columbia have established their own exchanges.