Health Insurance

Sen. Hatch promises 'solutions' to Obamacare subsidy fallout


He says he's got a solution—you just need to wait to see it.

The senior Republican in the U.S. Senate said Monday he will soon reveal a plan to deal with potential fallout from a Supreme Court decision that could eliminate Obamacare subsidies for millions of customers.

The promise by Sen. Orrin Hatch of Utah comes nine days before the court hears argument that those subsidies, worth billions of dollars, are illegal under the Affordable Care Act.

Experts have said that if the subsidies that help people pay their monthly health insurance premiums are taken away, many customers will drop their coverage because the retail prices of their plans would be too pricey.

Sen. Orrin Hatch
Andrew Harrer | Bloomberg | Getty Images

Hatch said that while Obamacare has hurt millions of people and needs to be ultimately repealed and replaced, Congress should do something in the meantime to mitigate the effects if the high court decides to invalidate that financial aid.

"I don't think we can stand by and simply let the shortcomings of the law hurt people more," he said during a speech at the Heritage Foundation in Washington, D.C.

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"In the coming days, I will release details of a short-term solution for Americans who may be affected," Hatch said. "That solution will address immediate concerns and set the stage for a permanent solution in the future."

Hatch's promise reveals a potentially tricky political situation for Republicans.

The GOP opposes Obamacare and backs the case challenging the subsidies. But there is concern that elected Republicans will suffer a backlash if Obamacare customers lose their health coverage, particularly if Congress does not come up with an alternative to the current subsidy structure.

At issue is the financial assistance given to nearly 9 in 10 customers of, the federally run Obamacare exchange that serves 37 states.

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Plaintiffs in the case known as King vs. Burwell claim that those subsidies are not legal because the ACA only explicitly authorizes such financial assistance for customers of an Obamacare insurance exchange run by an individual state, not by the federal government.

The Obama administration argues the subsidies are legal, and says Congress' intent was to provide the subsidies to all Obamacare customers, not just to ones who lived in a state that set up its own exchange.

Hatch said that the administration's use of an Internal Revenue Service guidance to explicitly state that the subsidies are authorized is yet another example of "a sustained assault on the rule of law" by Obama, and in line with "other executive over-reaches" by the president.

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"The American people deserve a health-care law that will work, and a president that will follow the law," he said.

The Supreme Court, which will hear arguments in the case on March 4, is expected to rule in June. That means the subsidies could be taken away soon afterward. The subsidies to customers of state-run Obamacare exchanges are not at risk in the case.