The U. S. Supreme Court could strike a fatal blow to the Affordable Care Act this summer.
If you get a government subsidy to help pay your health insurance costs, you might want to watch what's happening in Washington.
In March, justices heard oral arguments in King v. Burwell, which will determine if premium tax credits (subsidies) can continue to be granted in all 50 states, or only those 16 states that operate their own Health Insurance Marketplace.
At the core of the argument is wording in the law that states premium credits are available when insurance is purchased through a marketplace “established by the State.” Opponents of ACA contend the IRS overstepped its boundaries by allowing individuals outside those 16 states to receive premium tax credits.
If the high court rules that extending tax credits through the federal Marketplace is unconstitutional, as many as 8.5 million people will be affected. Closer to home in Kansas 96,000 will be affected. The impact in Missouri is more than double at over 253,000 individuals.
Without tax credits, many won't be able to afford health insurance and will drop coverage. From here the death spiral begins.
An immediate withdrawal from coverage means insurance carriers will be left to pay high-dollar medical claims, yet premium collections will plummet. Fewer participants in the market will cause some carriers to pack up and go home, reducing plan options and competitive pricing. As pricing further escalates, coverage will be out of reach for even more people. And so it goes.
So what are pundits saying about the voting direction of the Court? Looks like it could be a close race. The four liberal justices (Breyer, Ginsburg, Kagen and Sotomayor) are expected to side with the government and vote to affirm federal tax credits in states with the federal Marketplace. Their remarks during oral arguments indicated the four believe the system won’t work unless all states are treated equally.Justices Alito, Scalia, and Thomas, are expected to strictly interpret the wording in question and will likely vote against the government.
Justice Kennedy and Chief Justice Roberts are a little harder for Supreme Court watchers to peg. Justice Kennedy acknowledged that a literal interpretation of the statute favors those who oppose the government’s position. Yet he notes the consequences of a literal reading of the law create other constitutional problems.
Chief Justice Roberts, who shocked many when he upheld the constitutionality of the individual mandate in June of 2012 (National Federation of Independent Business v. Kathleen Sebelius), didn’t hint one way or another as to how he might vote.
The Court’s decision is expected in June. There’s much at stake, but even if the challengers are successful and the tax credits have to be withdrawn, states have options. They could move to establish their own marketplace or appoint a non-profit entity to run operations. That may be more difficult than it sounds given the challenges other state-run marketplaces have had the past two years.
The political rhetoric is sure to heat up this summer, no matter which what the Court rules. If you depend on premium tax credits for affordable health insurance, the wait could be stressful. This is certainly a race we’ll all be watching.
To your health!
