Obamacare unravel could be lose-lose: Experts

Obamacare unraveling could be lose/lose for both sides: Kavita Patel
Obamacare unraveling could be lose/lose for both sides: Kavita Patel   

Conservatives will find themselves in a tough spot if a Supreme Court challenge to President Barack Obama's signature health care law results in the loss of subsidies for millions of Americans, two doctors told CNBC on Monday.

Any day now, the Supreme Court is expected to decide whether language in the Affordable Health Care Act prevents the government from issuing subsidies to people who purchased health care on federal exchanges. The challenge being mounted in King v. Burwell threatens the subsidies issued in 34 states that did not establish state-run exchanges and are instead served by HealthCare.gov.


GOP lawmakers have put forward a number of measures that would extend benefits that subsidize the cost of coverage for Americans who purchased plans on federally administered health care exchanges. Such an extension would create a solution through the 2016 presidential election, but a ruling against subsidies could create disruptions in important spots on the electoral map.

"We're going to have millions of people who would not get health coverage, especially in key states like Florida and Wisconsin where there are big battle ground races to be had," Dr. Kavita Patel, a practicing physician at John Hopkins Medicine, told CNBC's "Squawk Box."

Read MoreObamacare case is political pickle for Republicans

One proposal from Sen. Ron Johnson, R-Wis., would extend subsidies to those who lose them, but would not offer them to new enrollees.

"If this does happen, it could be lose-lose for both sides because if you actually temporarily extend, like Johnson's proposal argues, you could create some market shifts just by extending current subsidies, but not allowing for new people to enroll," Patel said. "Remember, the stability of the individual market relies on some sense that we'll have future enrollment."

Dr. Scott Gottlieb, resident fellow at the center-right think tank the American Enterprise Institute, told CNBC a conservative win in the Supreme Court would amount to a pyrrhic victory.

If the subsidies are struck down, the individual mandate that requires Americans to have health care coverage would not hold up, so people could not be forced to comply with the Affordable Care Act, he said. However, many consumers would have no alternative because Obamacare has fundamentally changed the market place, he added.

"It's already destroyed the individual market. It's already pushed up prices and ended a lot of those small group plans," he said. "It will leave people in a difficult spot because you're getting all the pain of Obamacare, but none of the benefits, the subsidies that let you go in and buy these overpriced plans."

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Gottlieb said the Obama administration is likely to prevail. He put the chances of the Supreme Court striking down subsidies at 30 percent.

If the nation's highest court sides with the challengers, the president could issue new regulations that redefine what it means to be a state-established exchange, Gottlieb said, adding that it would be easy to establish new websites with the veneer of a state exchange but default to HealthCare.gov.

"If the administration does that, which I think they will, that's going to put a lot of pressure on red state governors to go along, because it's going to be very easy to for them to now comply to get the subsidies," he said.

In that event, Republicans should attach through legislation certain market-based reforms to the new definition that would revert regulation back to states, Gottlieb said. The GOP should also extend indefinitely some of the wavers to the ACA Obama has already granted.

Johnson's proposal would accomplish some of that and is gaining traction in the Senate, Gottlieb said, but it's uncertain whether such a measure could pass the House.

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