Today’s a big day when it comes to health law in the United States. Today, March 4, the Supreme Court will hear arguments in the King v. Burwell case, which could affect millions of people. If the justices rule in favor of the plaintiff, people in 37 states in which the federal government runs all or part of their health insurance exchanges will no longer receive subsidies to purchase coverage. The State of Missouri happens to be one of those states. In question is interpretation of the Patient Protection and Affordable Care Act, or Obamacare, and whether or not the law allows health insurance subsidies in states that do not have a state-run exchange. I’m no legal expert but as I understand it, federal law can’t trump state law and if a state chose not to set up a state-run health insurance exchange than subsidies really don’t apply.
A reason legal brief about what would happen if the Supreme Court rules against the legality of subsidies in states without a state run exchange noted that 87 percent of people who signed up for insurance through the exchanges in those 37 states received subsidies. The average subsidy was $268 per month per person and covered 72 percent of the monthly premium.
If subsidies were eliminated, those people’s out-of-pocket premiums would increase an average of 256 percent and would make coverage unaffordable for a vast majority of the 7.5 million people who signed up for coverage through mid-February.
As of now, fewer than 3 percent of uninsured people are exempt from the individual mandate that states people must have insurance if the lowest-cost plan costs more than 8 percent of their income. The individual mandate was a major part of the Patient Protection and Affordable Care Act.
However, if the subsidies are deemed to be illegal, it’s estimated that 83 percent of people who were previously eligible for insurance would be exempt from the individual mandate. The elimination of the subsidies could send the insurance market place into a tail spin. Insurers would still be required to guarantee coverage regardless of health status or prior medical history but they would no longer be prohibited from charging sick people a whole lot more. Health people who have purchased insurance to avoid penalty would have the option to drop coverage and that would drive the cost of insurance up even more.
Today is a big day and the Supreme Court will soon decide the fate of Obamacare.