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King v. Burwell: Nearly 200,000 Ohioans Could Lose Insurance Based on Upcoming US Supreme Court Decision

This month, the U.S. Supreme Court will announce its decision in King v. Burwell, a case challenging the premium tax credits provided through the Federally Facilitated Marketplace (FFM) to residents of the 34 states that do not operate their own Affordable Care Act Marketplaces. The plaintiffs (challengers) claim that 4 words in the ACA limit subsidies to people purchasing health insurance in an exchange (Marketplace) set up by a state, and that users of the federal marketplace are not entitled to subsidies.

What’s at stake if the Court rules in favor of the plaintiffs?  According to the Kaiser Family Foundation, as many as 13.4 million people in 37 states could lose subsidies if the Supreme Court rules against the federal government in King. Of the 235,000 Ohioans receiving health coverage through the federal marketplace, an estimated 80% receive premium tax credits to make the coverage affordable and most will be forced to drop coverage without those tax credits.

According to a new report by the American Academy of Actuaries , a decision against the federal government in King would:

  •  Cause massive disruption in the individual markets;
  •  Lead to spiraling premiums and undermine insurance reforms;
  •  Result in adverse selection (when healthy people drop insurance, but sicker people hold on to theirs, causing premiums to rise).

King is a challenge to the heart of the ACA and its outcome will determine the fate of millions of Americans who have been able to get quality, affordable health insurance thanks to premium tax credits.

If the court rules for the challengers, there’s no quick fix. The current Congress is not likely to pass an amendment to the ACA to clarify that subsidies are available to people using the federal Marketplace. Proposals being floated by Republicans in Congress extend subsidies only through the next election. It’s also hard to imagine that states such as Ohio will suddenly decide to establish a state exchange. And setting up an exchange takes a long time.

Does the challenge to the ACA have legal merit? When Congress wrote and passed the ACA, everybody – Republicans, Democrats, and the Congressional Budget Office alike – agreed that the tax credits would be available in all states.  

Everyone involved in the health care system, including hospitals, providers, and insurance companies, strongly disagree with the challengers’ position.

Insurance companies and the health care industry have adapted their business models to work with the ACA, and have done so successfully for nearly five years. A diverse array of more than 30 amicus (friend of the court) briefs filed in support of the ACA underscore the depth and breadth of backing for the government’s position, while challengers are primarily backed by conservative ideologues seeking to destroy the law.

The lawsuit is yet another political tactic from opponents of the ACA to dismantle the law. In fact, Republican leaders in Congress have openly admitted that they are counting on the Supreme Court to “take down” the ACA by dealing it a “body blow” that will cause it to “unravel” “pretty darn quickly.”

 For now, we’re focused on making sure that consumers understand the facts: right now, and until the decision is announced, absolutely nothing has changed, and consumers who enrolled in health insurance still have health care and financial help from their tax credits. The bottom line is that no matter how much political jockeying continues to happen around the Affordable Care Act, people still need and want access to affordable, quality health care. Now that 11.7 million people have found coverage through the Marketplace, it’s time to move past these divisive arguments to make the law work for all Americans.