Currently Viewing:
Newsroom
Currently Reading
The Potential Fallout if SCOTUS Invalidates ACA Subsidies for Federal Exchange
January 08, 2015 – Laura Joszt
Proposed Rule for Stage 3 Meaningful Use Submitted
January 07, 2015 – Laura Joszt
Medicaid's Western Push Hits Montana
January 07, 2015
Uninsured Rate Fell to 12.9% by the End of 2014
January 07, 2015 – Laura Joszt
The GOP Could Unintentionally Drive Up Obamacare Enrollment
January 07, 2015
Night Shift Work Is Not Heart Healthy, Study Finds
January 07, 2015
Larger Share of People Had High Medical Cost Burdens Prior to ACA
January 06, 2015 – Laura Joszt
Harvard Ideas on Healthcare Hit Home, Hard
January 06, 2015
CMS Gives Arkansas, Iowa More Leeway in Medicaid Expansion Waivers
January 06, 2015

The Potential Fallout if SCOTUS Invalidates ACA Subsidies for Federal Exchange

Laura Joszt
If the Supreme Court invalidates Affordable Care Act subsidies for consumers on the federal exchange, states without their own Marketplaces will be unlikely to stave off "immediate destabilization" of their insurance market, according to experts.
After the Supreme Court decided to hear King v. Burwell, the case that questions the legality of Affordable Care Act (ACA) subsidies for people who purchase health insurance on the federally run Marketplace instead of the state-run Marketplaces, experts predicted that a win for the plaintiffs would be enough to cripple the healthcare reform law.

While some argue that a decision invalidating the ACA subsidies on the federal exchange would cause states that have refused to create exchanges to move quickly to restore tax credits to middle-class citizens, and HHS would help by relaxing rules. However, in a piece written for the New England Journal of Medicine (NEJM), Nicholas Bagley, JD, David K. Jones, PhD, and Timothy Stoltzfus Jost, JD, explain that it won’t be easy.

“If the IRS rule is invalidated—and absent effective contingency planning—a state that has declined to create its own exchange probably won't be able to stave off the immediate destabilization of its insurance market,” they wrote.

If the Court sides with the plaintiffs, enrollees who are unwilling or unable to pay for their insurance premiums without financial assistance could lose their coverage 30 days after they fail to pay. The authors predict that those who remain in the exchanges will likely be sicker than those who drop their coverage, which in turn will expose insurers to large, unanticipated losses.

Once the Court announces its opinion—expected in late June—the decision could take effect in roughly 25 days. Even if the states using HealthCare.gov could set up their own exchanges quickly enough to reduce or prevent any gaps in coverage, they still might be unwilling to do so. As the authors point out, the political climate in nearly all of the federal exchange states is hostile to the ACA.

Six states on the federally facilitated Marketplace—Alabama, Georgia, Nebraska, Oklahoma, South Carolina, and West Virginia—filed a joint brief supporting the ACA subsidy challenge.

“As a collection of states, we support the ACA challenge that will be decided by the Supreme Court and are hopeful a ruling in our favor will ensure the IRS and other executive agencies are held accountable to enforce the laws as written by Congress,” Oklahoma Attorney General Scott Pruitt said in a statement.

An Oklahoma federal judge has already ruled that the subsidies for premiums could only be granted to enrollees on the state-run exchanges.

“ACA supporters thus have good reason to worry,” the authors concluded in their NEJM perspective piece. “For at least several years, and perhaps for much longer, the outcome in King could determine whether millions of people continue to have access to affordable, comprehensive health insurance.”

 
Copyright AJMC 2006-2019 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
x
Welcome the the new and improved AJMC.com, the premier managed market network. Tell us about yourself so that we can serve you better.
Sign Up