If the Supreme Court holds in King v. Burwell that the Affordable Care Act—also known as ObamaCare—does not allow subsidies for health coverage to flow through federal insurance exchanges, Republicans better be ready to say what to do next. Under such a decision, roughly eight million Americans in three dozen states would lose subsidies worth thousands of dollars. Many would suddenly find it impossible to pay for the insurance plan they’re on now.
President Barack Obama will then accuse conservative justices of overreaching and demand that the GOP Congress immediately extend subsidies to every state. His message will be politically potent, as it will turn the words of Republicans in 2013 back on them: “If you like your plan,” Republicans said, “you should be able to keep your plan.” Hillary Clinton will join in depicting Republicans as heartless brutes who would let people die for lack of health insurance rather than fix Mr. Obama’s law.
Fortunately, congressional Republicans have been thinking about the GOP’s response. The challenge will be to build consensus for one bill, choosing from the many ideas now being discussed.
The proposals that have been floated so far fall under two general approaches. The first emphasizes providing transitional coverage for those affected by the loss of subsidies, while replacing selected elements of ObamaCare. The second also includes transitional coverage but puts more emphasis on replacing and reforming ObamaCare. Both approaches are predicated on the belief that wholesale repeal and replacement of the law is impossible until a Republican is president.
Proposals by Sens. Ron Johnson (R., Wis.) and Ben Sasse (R., Neb.) follow the first approach. Both plans provide financial support for people who lose their insurance because of any Supreme Court decision. Sen. Johnson’s extends coverage until August 2017; Sen. Sasse’s keeps it for 18 months after the court’s decision ends the subsidies.
Both plans link transitional coverage with changes to ObamaCare that would allow a new Republican president time to craft a full replacement. Sen. Johnson’s reforms are more extensive. He would repeal the individual and employer mandates. States would be allowed to revise ObamaCare’s “essential benefits” provision that drives up costs by mandating extensive—and expensive—coverage that is often unnecessary.
Reps. Paul Ryan,John Kline and Fred Upton, all of whom are committee chairmen, follow the second approach by matching a tax credit to provide temporary transitional assistance with a robust package to reduce federal involvement in health care. Their plan would let states opt out of ObamaCare’s individual and employer mandates, give small businesses the ability to pool risk, and allow people to buy policies across state lines. It would preserve the option to keep a child on the family policy until age 26, as well as protections for people with pre-existing conditions and the ban on lifetime limits on payments for care.
Sens. Orrin Hatch (R., Utah) and Richard Burr (R., N.C.), also working with Mr. Upton, have an even more comprehensive package, with a tax credit people could use to purchase insurance or fund a health-savings account. It would repeal the individual mandate and make insurance portable, so workers would be able to take their policies with them from job to job. The proposal also includes liability reform and a measure to increase price transparency, so patients would know the average amount a provider receives for common procedures.
Sens. Hatch, Lamar Alexander (R., Tenn.) and John Barrasso (R., Wyo.) have a proposal that appears to be in the middle of the other four. It would provide transitional assistance while granting states without exchanges the freedom to create competitive health-insurance markets. States with exchanges could remain in ObamaCare or opt for this new system.
It will not be easy for the GOP to settle on a bill. How long should transitional assistance last? What form should it take? Should it be means-tested or a flat amount? What ObamaCare elements should be replaced?
The answers must come from congressional Republicans. The effort could be stopped by a few legislators making the perfect the enemy of the good. Nor can Republicans rely on leadership from their presidential hopefuls, who are more focused on their quests than on advancing policy solutions.
Some Republicans may insist on simply repealing ObamaCare. But doing this would chew up valuable time and give the president a veto opportunity he relishes. For now, Republicans should focus on putting Mr. Obama on the defensive with a proposal that makes sense to Americans.
A version of this article appeared May 7, 2015, in the U.S. edition of The Wall Street Journal, with the headline The GOP’s Health-Care Reckoning and online at WSJ.com.