What Will Republicans Do If The Supreme Court Kills Obamacare?

Given the tone and substance of today’s arguments, it looks like there’s a decent chance the Supreme Court will not only toss Obamacare’s individual mandate (a 62% chance according to Intrade), but all of Obamacare as well.

But then what? It seems highly unlikely—to say the least!—that any sort of replacement would pass this year. So now we are talking about 2013, where the issue would get sucked into the swirling nexus of entitlement and tax reform. It’s actually tough to logically separate out healthcare reform from those two issues, as Obamacare more or less attempts to do. Rising U.S. healthcare costs are driven by a market-distorting, third-party payment system where either government (via Medicare and Medicaid) or business (via the health insurance tax exclusion) picks up the tab for individual healthcare spending. You can’t really “fix” healthcare without significant tax and entitlement reform.

Conservatives want to change the system so markets can work their magic. But Republicans have been unclear about what they want to replace Obamacare with, exactly. Rep. Paul Ryan, the GOP’s resident wonk, gave a speech last September where, in addition to advocating block granting Medicaid to the states and transitioning Medicare to a premium support system, he endorsed “replacing the inefficient tax treatment of employer-provided healthcare with a portable, refundable tax credit that you can take with you from job to job, allowing you to hang onto your insurance even during those tough times when a job might be hard to find.”

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