Stakes Are High As Supreme Court Nears Key ACA Decision
June 06--Before the month ends, the U.S. Supreme Court will decide whether millions of Americans will be able to keep government subsidies used to purchase health insurance.
It's unclear how the court will rule, but the high-stakes case has already ignited a flurry of doomsday predictions and political posturing in the event the subsidies are struck down.
Republicans, who control Congress, have put forward a few proposals that would protect the subsidies in some form but only by repealing major tenets of the Affordable Care Act, President Barack Obama's signature health law. But some health experts and advocacy groups say these proposals would do little to limit the fallout if the subsidies are struck down. They also don't like the idea of making significant changes to Obama's law.
"I can't see why we should have to trade other pieces of the law," said Jen Bersdale, executive director of Missouri Health Care For All.
At issue is whether 6.4 million Americans, including 198,000 Missourians and 232,000 Illinoisans, who purchased insurance through HealthCare.gov qualify for a government subsidy to help defray the cost of coverage.
The administration contends they do, but the plaintiffs in the King v. Burwell case argue the subsidies are limited to customers who bought insurance through state-operated exchanges, as opposed to the federal HealthCare.gov platform.
If the subsidies are struck down, the fallout would be immense. Those who lose their subsidy would likely be unable to afford coverage, raising the number of uninsured. It could destabilize the entire individual, or nongroup, insurance market, raising premiums and costs for millions.
Insurance companies, which would still be required to comply with other parts of the Affordable Care Act, including the requirement to cover people with pre-existing conditions, would lose clients and face financial difficulties because their risk pool would be out of balance.
Hospitals and medical providers could also have an increasing number of uninsured patients unable to pay their bills, straining budgets.
Such consequences have had policymakers and stakeholders thinking of a Plan B since the court agreed to hear the case.
The Obama administration has been coy about any contingency plans, only saying they are confident the court will side with them in the case. Insurance companies have been similarly quiet. A number of insurers who do business in Missouri declined to comment on their plans.
"The government's supporters fear that discussing fixes might signal to the Supreme Court that eliminating the subsidies would not do much damage," wrote Nicholas Bagley and David K. Jones in a Yale Law Journal article.
Congressional Republicans have yet to coalesce around a plan in the event the subsidies are struck down. And the proposals offered by individual members fall short in the eyes of experts and analysts.
One bill, sponsored by Republican Sen. Ron Johnson of Wisconsin, would allow existing customers in all states to keep their subsidies until August 2017. But it would prohibit subsidies for new customers and repeal the law's mandate that most Americans have health insurance or pay a tax penalty.
"The loss of the individual mandate would likely destabilize the nongroup market, leading to higher premiums and fewer enrollees," wrote Timothy Jost, a law professor at Washington and Lee University, in a blog.
Another Senate proposal would allow consumers with subsidies to continue their current coverage for 18 months after the decision. During that time, insurers could not change coverage or raise premiums.
That measure, sponsored by Republican Sen. Ben Sasse of Nebraska, would gradually reduce the amount of a subsidy during the 18-month grace period until coverage eventually ended. Jost wrote this approach was less disruptive than Johnson's plan, but it was panned in a recent report by the American Academy of Actuaries.
"Even if a temporary extension of premium subsidies would help avoid disruption in the short term, it is likely that the disruption would be only delayed, not avoided altogether," it said.
States could also take action to avoid the fallout from the loss of subsidies, and some are already doing so. The Wall Street Journal reported that state insurance officials, including an attorney from Missouri, gathered secretly last week in Chicago to weigh their options. Missouri insurance officials declined to name the state's representative.
By creating their own exchange, states could ensure subsidies will continue to flow to their residents. Illinois would be in decent shape for this option, given that it already runs a "partnership" exchange and shares resources with the federal government.
But it would be a tough climb for Missouri, where voters approved a law in 2012 preventing a state exchange without a ballot measure or a vote from lawmakers.
Missouri advocates aren't being idle. Plans are being made to ignite a grass-roots effort as soon as the court rules. Missouri Health Care For All is planning press conferences around the state for whenever the court decides.
The Cover Missouri Coalition, which spearheads enrollment efforts in the state, is laying plans. The stakes are especially high for the initiative if the subsidies are struck down. Officials said there would be a serious question if it could continue to assist in insurance enrollment.
"It is just going to be devastating," said Ryan Barker, vice president for health policy at the Missouri Foundation for Health, which leads the coalition. "It's going to have major impact on the future Cover Missouri."
A decision is expected toward the end of the month. Supreme Court cases generally have the force of law 25 days after they are rendered, giving some time before subsidized coverage would end.
In addition, the federal health law requires insurance companies to pay customer claims for at least 30 days when premiums aren't paid.
This report was prepared in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.
Jordan Shapiro -- 314-340-8114
@jordanshapiro13 on Twitter
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