Thanks to a measure that was approved by Arizona Gov. Doug Ducey (R) this month, insurance coverage for tens of thousands of his constituents could be placed in serious jeopardy if the Supreme Court decides to limit the availability of Obamacare’s subsidies in the states that haven’t fully implemented health reform.
The legislation, House Bill 2643, is being framed in terms of giving the state “sovereign authority” over its policies. In practical terms, it bars state employees from doing anything to cooperate with the federal law — which may prevent Arizona from setting up its own state-run insurance marketplace under the Affordable Care Act.
That’s significant because Obamacare is the subject of a pending Supreme Court challenge that alleges the government doesn’t have the authority to extend tax credits to the states — like Arizona — that don’t currently have state-run marketplaces.
If the federal government loses its case, the 34 states that have resisted health reform and defaulted to federally-run marketplaces will be left scrambling to figure out what to do next. All of a sudden, thousands of their constituents will lose their subsidies, making it much harder for them to afford their plans and potentially putting the entire insurance market at risk.
In that case, some of those states may try to work quickly to build state marketplaces so they can restore people’s access to subsidies. Ohio Gov. John Kasich (R) and Pennsylvania Gov. Tom Wolf (D) have already indicated they’re prepared to pursue that contingency plan. However, House Bill 2643 could block this avenue altogether — preventing Arizona from even considering responding to the fall-out from a potential ruling against Obamacare with a state-run marketplace.
“I am distressed that was taken off the table before it can be discussed as a viable option,” Tara McCollum Plese, the senior director of external affairs at the Arizona Alliance for Community Health Centers, told the Arizona Republic.
Failing to come up with another way for Arizonans to access tax subsidies could put a considerable number of people at risk. The Kaiser Family Foundation estimates that a ruling against the health care law would deny subsidies from 264,053 Arizona residents who otherwise would have sought them in 2016. Recent data from the Department of Health and Human Services shows that about 75 percent of the Arizonans who signed up for plans before this February are currently relying on subsidies, which works out to be more than 150,000 people.
Ducey told reporters that he approved HB 2643 because he is “no fan” of the Affordable Care Act. He maintained that the legislation should not be interpreted to mean the state will be helpless if the Supreme Court rules against Obamacare, and said he will have a “plan of action” if that happens. “The state can still act, the state still has the option to act, we need to see what the Supreme Court says and I’m not going to speculate on that,” Ducey said this week.
The governor has certainly made his anti-Obamacare views known since taking office. Last month, Ducey signed a different bill that seeks to tighten the eligibility requirements for Arizona’s Medicaid program, ultimately kicking 500,000 low-income people off of their plans. Although the federal government — which has the authority to veto state’s Medicaid reforms — is unlikely to approve the changes, the legislation stipulates that Arizona will continue asking for approval every year for an indefinite amount of time.
Ducey’s priorities may actually make Obamacare proponents in the state nostalgic for former Gov. Jan Brewer (R) — who certainly wasn’t a progressive champion, but who became an unlikely ally to health reform when she bucked the rest of her party and embraced the law’s optional Medicaid expansion.
GOP-controlled legislatures have found many effective ways to thwart Obamacare’s implementation on a state level. In addition to refusing to set up state marketplaces and resisting Medicaid expansion, some states like Missouri and Florida have also passed laws barring state officials from assisting in enrollment. According to a recent study from the Commonwealth Fund, that has resulted in some real-world consequences: In the GOP-led states that have fought against reform, it’s harder to access health care than in the states that have been more cooperative.