Republicans have promised to revive their war on Obamacare when they take control of the Senate in January, but lurking in the distance is an even greater threat to the president’s health care law—one that could have devastating implications for millions of people who have obtained health insurance through federal exchanges.
On Friday, the U.S. Supreme Court announced that it will review King v. Burwell. It's one of a handful of closely watched cases regarding whether or not people enrolled on the federal exchange are eligible to receive insurance subsidies.
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The plaintiffs’ challenge centers around the law’s language that says enrollees can receive subsidies when they purchase health insurance on an exchange “established by the state.”
They say that since the law doesn’t explicitly mention the federal exchange, people who enroll in any of the 34 states that rely on the federal portal are not eligible to receive subsidies.
Lawmakers who drafted the legislation, however, say the plaintiff’s interpretation of the law is wrong—and that the ACA’s intentions were always to offer subsidies to all Obamacare enrollees, not just those on state-run exchanges.
“If the Court does strike down federal insurance subsidies in states with federal rather than state-run exchanges that would be quite a body blow. At the very least it would eliminate a central plank of the ACA in over 30 states,” Stuart Butler, a senior fellow at Brookings, wrote in a blog post Friday.
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Indeed, an unfavorable court ruling for the administration means that anyone who signed up through HealthCare.gov and received a subsidy—some 4.6 million people—would have to pay more for their coverage unless Congress amends the law.
Now that Republicans will control Congress, it’s even less likely that lawmakers would be open to passing any legislation that would help save Obamacare.
Meanwhile, the president’s health care law faces other threats beyond the Beltway.
Republican victories in the midterm elections on the state level could make major ACA provisions like Medicaid expansion for low-income single people more vulnerable.
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“Far more important will be what happens at the state level, where actions by state legislatures and governors could shape the future of the ACA, eventually changing it considerably even if not ending it,” Butler wrote.
As the result of a 2012 Supreme Court ruling, states have the right to choose whether to opt out of Medicaid expansion. Twenty-three states—all with Republican governors--decided not to expand their programs, saying it would be too costly for their states to handle. The administration, for its part, has been working to encourage more states to expand their programs, offering alternatives like Arkansas’ "private option” to get more low-income people covered.
However, Republican victories in numerous statehouses and gubernatorial races are likely to “slow that momentum,” according to Butler. In fact, Arkansas is expected to vote on whether to repeal its private option next year, after the pilot program ran far over budget. Republican Governor-elect Asa Hutchinson, has not publicly said whether he supports repealing the private option, but he said he’s also not committed to its continuation.
If that wasn’t enough for the administration to worry about, Republicans have made clear that they will be taking aim at several vulnerable provisions of the health care law-including the medical device tax, and the employer mandate. Read more about the GOP strategy here.
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