The Supreme Court could decide this month that the financial help 6.4 million Americans receive to cover their health insurance costs are illegal — sending premium costs skyrocketing as much as 650 percent in states with some of the poorest residents.
The case, King v. Burwell, would affect people in the 36 different states that use Healthcare.gov as their marketplace. But the pain won’t be felt equally, according to a new graphic from the Kaiser Family Foundation, a health-care nonprofit with a wealth of data. The real losers in a ruling against Obamacare: the states that have the most people enrolled under the law and where incomes are low.
If Republicans get their way at the Supreme Court this month and wipe out Obamacare premium subsidies for millions of Americans, the ensuing damage to their party in 2016 swing states could be poignant.
A state-by-state analysis by the Kaiser Family Foundation found that about 6.4 million Americans in 34 states that use the federal marketplace would lose a total of $1.7 trillion monthly tax credit dollars—an average of $272 per person—and face a net premium increase of 287 percent.
Officials from states across the nation flew to Chicago in early May for a secret 24-hour meeting to discuss their options if the Supreme Court rules they have to operate their own exchanges in order for residents to get health-insurance subsidies.
Sometime in the next few weeks, the U.S. Supreme Court will rule on whether the federal government can subsidize people’s health insurance in the 37 states that haven’t set up Affordable Care Act exchanges. Behind that fight is another one, just as interesting and almost as important: Who gets the blame if the government loses?
The case, King v. Burwell, revolves around a phrase in the law that says insurance subsidies are available on exchanges “established by the state.” The plaintiffs and their supporters say this shows Congress meant to use the subsidies as a cudgel to compel states to create their own exchanges. Now that the strategy has failed, they argue, with some states refusing to build exchanges and instead defaulting to the one run by the federal government, the government should accept the consequences and withdraw those subsidies.
A group of Republican Senators is getting ready for a game of chicken with the administration if the Supreme Court strikes down Obamacare health care subsidies.
Sen. Ron Johnson (R-WI) and a handful of senators are rallying around a contingency plan if the court rules against the administration in King v. Burwell and eliminates health subsidies for millions of people currently enrolled in the federal exchange, HealthCare.gov, Politico first reported.
Related: Some States are in Debt Over Obamacare Exchanges
The GOP plan would create a patch for the subsidies until 2017, sparing millions from losing health coverage. In exchange, the proposal eliminates two major provisions of Obamacare—the employer mandate and the individual mandate, which, policy experts warn, would cause a crippling ripple effect through the insurance market.
If the Senate plan gains traction, it could force the Obama administration to decide whether to sign a piece of legislation that guts major Obamacare provisions in order to keep millions of people from being denied their subsidized coverage, or reject the proposal and see millions lose coverage.
– See more at: http://www.thefiscaltimes.com/2015/05/26/How-GOP-Could-Box-White-House-Obamacare#sthash.jLkdp98h.dpuf
At some point between now and the end of June, the Supreme Court will decide King v. Burwell and, in the process, determine whether the phrase “established by the State” actually means “established by the State.” This phrase, which appears twice in the Patient Protection and Affordable Care Act (PPACA) provisions authorizing tax credits for the purchase of health insurance in exchanges, has bedeviled defenders of the IRS rule purporting to authorize credits in federally established exchanges. Some claim this phrase is “convenient shorthand” for “exchange” (even though it’s neither more convenient nor shorter), while others argue the phrase is effectively meaningless, or actually means something else (such as established in the State). The plaintiffs, on the other hand, maintain that the language means precisely what it says.
WASHINGTON — They are only four words in a 900-page law: “established by the state.”
But it is in the ambiguity of those four words in the Affordable Care Act that opponents found a path to challenge the law, all the way to the Supreme Court.
How those words became the most contentious part of President Obama’s signature domestic accomplishment has been a mystery. Who wrote them, and why? Were they really intended, as the plaintiffs in King v. Burwell claim, to make the tax subsidies in the law available only in states that established their own health insurance marketplaces, and not in the three dozen states with federal exchanges?
ObamaCare supporters have produced study after study warning of the devastation to come if the Supreme Court decides the IRS did in fact illegally extend health insurance subsidies to people in states operating under federal exchanges.
But the American Action Forum (AAF), a dynamic think tank led by former CBO director Douglas Holtz-Eakin, has produced new research that provides balance to what has been a one-sided debate. He shows how people in 37 states will be helped if the petitioners prevail in King v Burwell.
AAF estimates that more than 11 million people would be liberated from having to purchase expensive ObamaCare insurance and freed from the onerous penalties of the individual mandate, which cost those who don’t comply an average of $1,200 in fines this year. The study also finds that workers could earn nearly $1,000 more, and 1.2 million more people would join the workforce in federal exchange states if King prevails in the lawsuit.
In March, the Supreme Court heard oral arguments in King v. Burwell, the case that will decide whether the language of the Affordable Care Act (ACA) allows only those who purchase health insurance through state-established exchanges—not federal health exchanges—to qualify for federal subsidies. Justices Sonia Sotomayor and Anthony Kennedy suggested that they may be forced to allow the subsidies for federal exchanges because limiting subsidies to state exchanges might unconstitutionally intrude on the federal-state relationship by coercing states into forming their own health-insurance exchanges. This federalism argument, however, is based on speculation leading to flawed legal reasoning. It shouldn’t determine the outcome the case.
The ACA’s statutory language seems to limit federal subsidies to people enrolled “through an Exchange established by the State under section 1311,” the ACA section directing states to establish health exchanges. The statute makes no mention of subsidies for enrollees on the federal exchanges authorized under a different ACA section, 1321. The plaintiffs in the case argue that this is no accident: Congress, they maintain, intended to encourage states to create their own exchanges by offering subsidies only to state-created exchanges.
Justice Sotomayor asked if interpreting the ACA to disallow federal-exchange subsidies would “intrude on the federal-state relationship, because then the states are going to be coerced into establishing their own exchanges.” Justice Kennedy, widely viewed as the Court’s swing vote, amplified the argument, suggesting that under “the standard of constitutional avoidance,” the plaintiffs’ interpretation might be prohibited because it could lead to unconstitutional coercion. “States are being told either create your own exchange, or we’ll send your insurance market into a death spiral,” he said.
The Supreme Court’s pending decision in King v. Burwell could upend the way premium subsidies are distributed through the Federal health insurance exchanges in as many as 37 states. The impacted states are those that declined or failed to establish their own exchanges under the Affordable Care Act (ACA). Examining the insurance market effects we find that: