The Supreme Court is expected to issue a ruling in the next week that could have serious consequences for millions of people who have received subsidized health coverage through the president’s health care law.
The high-stakes case of King v. Burwell centers on whether language in the Affordable Care Act provides health care subsidies to people who signed up for coverage on the federal exchange, HealthCare.gov.
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Plaintiffs in the case charge that because the law states that subsidies would be available to people who enrolled in exchanges “established by the state,” only Obamacare enrollees in states that created their own exchanges should be eligible to receive them. They point to Jonathan Gruber, an infamous architect of Obamacare, who twice stated, “If you're a state and you don’t set up an exchange that means your citizens don't get their tax credits.” He later walked back those comments.
The Obama administration, on the other hand, says the intention of the law was always to provide subsidies to every income eligible enrollee, regardless of which exchange they used to sign up.
There are about 6.5 million people who are currently receiving health subsidies in the 34 states that did not create their own exchanges. If the Court sides with the plaintiff, these people would be stripped of their subsidized coverage.
Republicans and Democrats both agree that an adverse ruling would be devastating for millions of people, as well as destructive to health insurance markets in the affected states. There are a number of proposed contingency plans floating around on Capitol Hill. However, many of them are Republican plans that would involve repealing major parts of Obamacare—a move that would never survive the president’s veto pen.
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A ruling could come at any time in the next few days.
Here are 5 things that could happen if the Supreme Court rules against the administration:
Millions of people would lose their health coverage. 6.5 million people living in the 34 states that rely on the federal exchange will lose their subsidized health coverage, barring Congressional action or a fix on the state level.
Premiums could rise. If millions of people lose their subsidized coverage, it could send insurance markets in federal exchange states into a tailspin, since fewer people would be included in the risk pools. And since most of the remaining people in the risk pools would skew older and therefore sicker, insurance companies would have to raise their rates to cover their costs.
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Uninsured rate would go back up. Since the ACA took effect, the uninsured rate has dipped to 10.1 percent, the lowest point recorded since Gallup began tracking it in 2008. If the Court rules against the administration and some 6 million people lose their coverage, the rate will quickly tick back up.
States could opt to set up their own exchanges. If the Court strikes down subsidies in states operating on the federal exchange, those states have the option to keep subsidies flowing to their residents by passing legislation establishing their own exchanges. A handful of states including Pennsylvania have already committed to forming their own exchanges in the event of an adverse ruling. Other states like Louisiana have vowed not to create their own exchanges—leaving their residents at risk of losing subsidies.
Congress could fix the law’s language to keep subsidies flowing. Though a very unlikely scenario, Republicans have offered a variety of plans that would continue subsidies to federal exchange enrollees. However, their plans include repealing key pieces of the president’s health care law. The Obama administration has already vowed to veto any plans in their current form. And since the GOP has yet to offer any other fixes that might pass muster with the president, this option does not seem likely.
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