Industry Focusing On ACA Revisions Now That Court Case Is History

By John Hilton

Insurance industry officials said the Supreme Court decision upholding federal subsidies for purchasing health insurance should help the industry refocus its efforts on making the Affordable Care Act coverage more accessible and less expensive.

The U.S. Supreme Court ruled in favor of the ACA today, handing down a 6-3 decision that subsidies offered to those who purchase health insurance on the federal exchange are legal. The decision had financial implications for the 6.4 million people who stood to lose subsidies collectively worth $1.7 billion per month.

Efforts to tweak the ACA have slowed while participants waited to see for the Supreme Court case to be resolved.

Juli McNeely, president of the National Association of Insurance and Financial Advisors, said NAIFA “remains committed to pursuing targeted revisions” to the ACA.

For example, NAIFA supports legislation recently introduced in both the Senate and House to “remove advisor compensation from the medical loss ratio (MLR) calculation,” she said.

In addition, The Protecting Affordable Coverage for Employees Act “is a bipartisan modification to the ACA that will help NAIFA members continue to serve their small employer clients and avoid plan disruption for employers with 51-100 employees,” McNeely said. “Without a modification, employers with 51-100 employees will not be able to keep their current health care plans or purchase or renew plans that do not conform to the new regulations.”

McNeely said the court ruling on the subsidies won’t change the way health insurance agents conduct business.

“With the Supreme Court decision, independent agents will face the same challenges and opportunities,” she said. “They will continue to serve consumers with the purpose of keeping health care affordable and helping them shop for the most suitable policy at the best price.”

Meanwhile, the National Association of Health Underwriters released a statement calling it “critical” to start work on improving the health care delivery system.

“Our hope is that policymakers will now be able to focus on legislative efforts to truly reduce the cost of healthcare, something that the PPACA did not. It’s also critical that lawmakers improve upon the portions of our healthcare system that work well,” said Janet Trautwein, CEO of NAHU.

“Every day, health insurance agents and brokers work to obtain insurance for clients who are struggling to balance their desire to purchase high-quality and comprehensive health coverage with the reality of rapidly escalating health premium costs,” she added. ”As such, one of our primary goals as an association of benefit specialists is to do everything we can to promote affordable access to health insurance coverage.”

The Supreme Court case, King v. Burwell, rested on whether the ACA authorizes a subsidy for plans purchased through the federal marketplace, HealthCare.gov. In regulations issued in 2012, the Internal Revenue Service said the subsidies would be available to those enrolling through both the state and the federal health insurance exchanges.

Plaintiffs argued that the ACA only authorizes subsidies for plans purchased in the states and District of Columbia that have created their own marketplaces.

The Supreme Court upheld a lower-court ruling, with justices Clarence Thomas, Samuel Alito and Antonin Scalia dissenting. Had the court overturned the case, it would have eliminated subsidies for millions of Americans in about three dozen states.

Nationally, 10.2 million people have enrolled in coverage under the ACA. Of those, 8.7 million people are receiving an average subsidy of $272 a month to help pay their insurance premiums.

Among those who receive subsidies, 6.4 million people were at risk of losing that assistance because they live in states that did not set up their own health insurance exchanges.

This is not the first ACA case to hit the Supreme Court. In 2012, the high court upheld the central foundation of the health care law, a requirement that most Americans obtain insurance or pay a penalty.

Many pundits are predicting that today’s ruling is the last significant hurdle for the ACA. A Kaiser Family Foundation tracking poll from earlier this month found that 63 percent of Americans wanted the court to preserve the subsidies.

NPR reports that minor lawsuits remain against the ACA. House Republicans are challenging the money used for the law's subsidies, saying it was not properly approved by Congress and that the administration did not have the power to delay the law's requirements that larger employers provide coverage or face a penalty.

Additional legal challenges include several dozen cases still pending over birth control coverage mandated by the ACA, according to NPR.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.