What Happens If the Administration Wins the Supreme Court Obamacare Case?

If the Supreme Court later this month strikes down Obamacare subsidies in states with federal insurance exchanges, the narrative is simple: The health care law could be fatally crippled and marketplaces will fall into 34 simultaneous death spirals.

But what if Obamacare's conservative challengers lose King v. Burwell?

If that question seems less sexy in a policy sense, that's because it is. Essentially, if the Court decides the federal government is on the right side of the law, nothing happens; business continues as usual in all 50 states' Obamacare exchanges. People keep their insurance as is.

But politically, an Obama administration win would mean volumes.

The decision would validate the White House's faith in the president's signature domestic accomplishment. And it would give Democrats the platform to say some variation of "I told you so" after standing their ground over the past couple of months, refusing to engage in conversations asking how they would fix Obamacare because, as they keep repeating, the Court isn't going to break it.

For Republicans, aside from the disappointment of losing their second Supreme Court challenge against the Affordable Care Act in three years, they would lose perhaps their only true bargaining chip—the health insurance of some 10 million people—against the White House to make any substantive changes to Obamacare this year.

So the focus would shift to 2016.

"We'll continue to work to try to repeal it and replace it with patient-focused care, but at that point ... it would be part of the debate going into the 2016 election because we really don't have a willing partner in the White House with President Obama," Republican Sen. John Barrasso said in an interview.

"Republicans will tell the American people that if you want to get rid of this dreadful law, you have to elect a Republican," said Doug Holtz-Eakin, president of the American Action Forum, a center-right think tank.

There could be room for one last run at Obamacare this year, via reconciliation in the Senate.The tool allows legislation to head to the president's desk with only 51 votes instead of the normal 60, and April's budget agreement used language vague enough that the measure could be used for either a King fix or a complete Obamacare repeal.

Some Democrats, meanwhile, say a Supreme Court win for the White House could finally mean Republicans give up the fight over Obamacare.

"I think they'll see that the American public is firmly and unequivocally benefitting from this law and they'll make their peace with it," said Sen. Richard Blumenthal.

Other liberals also see the case as a tipping point for the law's acceptance. The discussion could then turn to perfecting the law.

"I think that's going to send a clear signal around the country. And the signal is that the Affordable Care Act is essentially a permanent part of America's health care system," said Ron Pollack, executive director of Families USA. "I think it'll say that a corner has been turned and it will no longer be a credible debate to think about undermining or repealing the Affordable Care Act."

Notably, congressional Democrats and the White House won't publicly admit to thinking ahead about how they would try and fix Obamacare should the Court's ruling not go their way. Their only statements have essentially said that the public would insist the Republicans find a way out of it.

"I don't think they will [win]," Senate Minority Leader Harry Reid told National Journal last month. "If they do, that's a problem that the Republicans have."

Republicans as a whole, for their part, also won't commit to a single post-King fix proposal. That's not for a lack of options. Sens. Ron Johnson and Ben Sasse have both introduced legislation that would continue giving financial assistance to exchange enrollees currently receiving subsidies. Senate and House leadership have floated proposals, and Sen. Bill Cassidy has also talked about introducing legislation.

Although Sasse's bill hasn't gained much traction, Johnson's currently has 31 cosponsors, including Barrasso. It would allow individuals to keep any health care plan and subsidy until August 2017. It also would repeal the individual and employer mandates, and amend "essential" health benefits and benefit packages to mean those defined by the state in which the health plan is offered.

"We're drafting legislation, but we're not likely going to introduce something until we know what the Court actually does," Barrasso said. "When you take a look at the last time the Court ruled on the health care law, they came out with a ruling that nobody anticipated. So we're going to want to see exactly what they do. And we'll respect the ruling of the Court, and our legislation will reflect that."

Sen. Lamar Alexander, chairman of the Health, Education, Labor, and Pensions Committee, echoed Barrasso's concerns about preemptively introducing legislation, but he said Republicans will be "well-prepared."

"We're having good discussions and we're drafting legislation and getting a score from the Congressional Budget Office about different options," Alexander said in an interview. "We're talking with members of the House of Representatives, so there's no need for us to announce a plan until we know whether we need a plan. We don't know what the Supreme Court will decide."

Waiting may be a good strategy. Justices could go in any direction or come up with a relatively novel way to write a decision. The Supreme Court after all, is predictably unpredictable—everyone remembers the 2012 ruling when it upheld the Affordable Care Act as a tax, rather than via the Commerce Clause.

Dan Mendelson, CEO of Avalere Health, an independent consulting firm, believes a King loss might actually be the safest scenario for everybody, not just Democrats.

"In that situation, I think the Republicans breathe a sigh of relief privately, but continue to decry the Affordable Care Act publicly," he said. "They don't wake up in the morning and want to deny low-income individuals insurance. In a lot of ways, they get to retain the rhetorical fight without damaging anybody."

Yet the Obamacare war will continue. After all, the court case at its core is over four words ("established by the state") in the Affordable Care Act; an Obamacare win "doesn't say it's a good law," Mendelson said.

So then what would it take for the attacks on Obamacare to end?

Mendelson views several different factors as critical to a cease-fire: exchange stability, a critical mass of enrollees, and a Democratic winner in the 2016 election.

"Right now, the Republican Party does not have a political incentive to embrace the Affordable Care Act because they're still getting returns for going negative on it," Mendelson said.

"I think when the exchanges stabilize and you've got maybe 20 million people in the exchanges…and it really becomes part and parcel of the normal operations of an insurance company, there will be more incentive for the Republicans to embrace the construct," he added. "Until they do, it's going to continue to be contentious.

"If a Democrat is elected in the '16 election, I do think at that point it's time to move on from the issue, in all likelihood," he added.

But it's still possible that Obamacare exchanges never stabilize or double in size. And a Republican could very well occupy the White House in 2017, and the debate could rage on. And in the meantime, Congress could still decide to send a repeal bill to the president's desk to make a point. Or it could instead take up smaller, bipartisan changes to the law.

In the meantime, everyone waits for the Supreme Court.

(Image via Gary Blakeley /Shutterstock.com)