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If the Supreme Court undercuts Obamacare, then what?

Should the Supreme Court decide to throw out the Affordable Care Act's system of subsidies, it would be "not just absurd, but catastrophic" for health care in the U.S., Sen. Jeff Merkley, a Democrat from Oregon, warned reporters Tuesday.

"It would throw the law into pandemonium," added Sen. Chris Murphy, a Democrat from Connecticut. Without the nationwide delivery of subsidies to help people pay for Obamacare, "the entirety of the statute falls into disarray in over half the country," he said.

Obamacare supporters have not hesitated to predict the drastic consequences that could come from King v. Burwell, the case the Supreme Court considers Wednesday. The plaintiffs in the case argue that the Affordable Care Act only allows the federal government to provide subsidies in states that run their own health care marketplaces.

If the Supreme Court agrees, it would cut off subsidies in the 34 states that rely on the federal government to run their Obamacare marketplaces, or "exchanges." That would leave millions of Americans, concentrated largely in GOP-led states like Texas and Florida, without the financial support that puts the "affordable" in the Affordable Care Act.

Larry Levitt, a senior vice president at the Kaiser Family Foundation, told CBS News that the impact could indeed cripple the Affordable Care Act in those states.

"The immediate effect would be that 7.5 million people would lose the federal subsidies that are helping them buy insurance," he explained. Even more significantly, "it would trigger a meltdown in the individual insurance markets in the 34 states that are affected," Levitt said.

The result would create an even bigger rift between the mostly-blue states that have embraced aspects of Obamacare -- such as the expansion of Medicaid -- and the mostly-red states that have rejected them.

"You'd almost have two Americas in terms of health care coverage," Levitt said.

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It seems like a scenario that lawmakers -- either at the state or federal level -- would want to avoid all together or rectify. However, the politics of Obamacare is unpredictable. So far, lawmakers have been largely silent about any contingency plans they may be drawing up in anticipation of the King case decision.

In Florida, more than 1.4 million people have qualified for Obamacare subsidies. Yet Brian Keeley, president and chief executive of Baptist Health South Florida, told the New York Times that "there's no Plan B from the Republican Party or the Democratic Party" in the state should the subsidies disappear. Republican Gov. Rick Scott said at a recent event that the potential loss of subsidies is "a federal problem," not his.

One million residents received tax credits in Texas, another GOP-led state that relies on the federal government to run its marketplace. One state Democratic lawmaker has drawn up bills to create a state-run marketplace, but Republican Gov. Greg Abbott has declined to weigh in how his state should respond to the King case, the Texas Tribune reports.

At least a handful of Republican-led states have completely rejected the idea of creating a state-run exchange. According to Reuters, leaders in Louisiana, Mississippi, Nebraska, South Carolina and Wisconsin are opposed to transitioning to state-based marketplaces. Meanwhile, officials in Georgia, Missouri, Montana and Tennessee told Reuters that GOP opposition to Obamacare made such a transition unlikely.

Even if state lawmakers want to build a state marketplace to keep receiving subsidies, "this can't be done overnight," Levitt warned. Should the Supreme Court strike down the current system, he said, "the subsidies would go away almost immediately, but it would take at least months if not years for marketplaces to get up and running."

In some states, the state legislature would have to pass a law to approve a state marketplace. Then, officials would have to establish an agency, nonprofit or some other entity to run the marketplace. Call centers would have to be created, and so on.

On top of all that, the states would have to find a way to finance the effort. When the Affordable Care Act first passed, the federal government doled out $4 billion in grants to states to set up their own marketplaces. Now, that money is gone.

Of the 34 states with federally-run marketplaces, there are seven that may be best poised to transition to a state-based system: Arkansas, Delaware, Illinois, Iowa, Michigan, New Hampshire and West Virginia all have marketplaces that are run by federal-state partnerships.

"Those are states are technically considered federal marketplaces but are performing some of the functions required of a marketplace," Levitt explained. "Because they are participating in the implementation of Obamacare, it suggests the politics are a little less hot in those states. It'd be easier both politically and logistically to transition."

Such a move would have the biggest move in Michigan, where more than 340,000 people signed up for Obamacare and about 87 percent received subsidies.

Dave Murray, a spokesman for the office of Republican Gov. Rick Snyder, declined to say how the state should respond if subsidies are cut off.

"We are aware of the case, are monitoring its progress and are examining potential impacts it could have on Michigan," he said. "However, we will not know the exact impact until the court rules, so it would be premature to speculate on any actions we may or may not take on this matter."

Erin Knott, Michigan State Director for the nonpartisan, nonprofit Get Covered America, said the subsidies have had a significant impact in the state.

"No matter how much political jockeying continues, we see across Michigan... people still want and need access to quality and affordable health care," she said. "The subsidies are doing that for them."

If there are states that want to transition from federal to state marketplaces, it's possible they could follow the model set by Oregon, New Mexico and Nevada. Those states are running their own marketplaces, but they're relying on the federal government to provide the IT infrastructure.

Some states like Maine have said they're exploring options like this. Doug Dunbar, a spokesman for Maine's Bureau of Insurance, told CBS News, "The Bureau is evaluating all types of systems in place in other states, in order to be helpful to the Governor and other policymakers."

While states consider their options, the federal Health and Human Services Department has insisted it has no contingency plan in place for the King ruling.

"We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision," HHS Secretary Sylvia Burwell said in a letter to Republican members of Congress.

Republicans in Congress, meanwhile, say they have their own ideas for what to do next.

"What about the people who will lose their subsidies--and possibly their coverage? No family should pay for this administration's overreach," a group of House Republicans wrote in a Wall Street Journal op-ed. They proposed an "opt out" of Obamacare, allowing states to disavow the individual and employer mandates included in the law.

A group of Republican senators, meanwhile, wrote a separate op-ed proposing further changes to Obamacare.

Democrats, not surprisingly, brushed off the proposals. Sen. Chuck Schumer, D-New York, told reporters Tuesday that the GOP's "so-called plans... are not worth the paper they're printed on."

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