Supreme Court Case on Affordable Care Act: King vs. Burwell

Blog Entry by Marie Mulroy

Since its inception in 2010, the Affordable Care Act has come under constant attacks all designed to dismantle this landmark piece of legislation. The most recent assault is the case of King vs. Burwell currently in the Supreme Court and should be decided sometime this month or in early July. The ACA provides that individuals can purchase competitively-priced health insurance on American Health Benefit Exchanges that may be run by either the States or the federal government. It also authorizes a federal tax credit for low- and middle-income individuals who purchase insurance on the Exchanges.

The plaintiffs in this case filed a lawsuit in the United States District Court for the Eastern District of Virginia, challenging the IRS rule on the ground that the ACA authorizes tax credits only for individuals who purchase insurance on state-established Exchanges and not those who purchase through Federal Exchanges.  What makes this problematic for 34 states, including New Hampshire, is that they have chosen to run their exchanges through the federal government.  If the Supreme Court decides that only those who buy their health insurance from state-established exchanges are entitled to financial help, then all those individuals who qualified on NH’s exchange could be in jeopardy of losing their tax credit.

Only 14 states have opted to have state-run exchanges and the argument heard at the Supreme Court from the 34 states that would be adversely impacted hinges on the fact that they never received any indication that federal-run exchanges would not be eligible for subsidies.    When New Hampshire opted for a “partnership model” federally facilitated exchange, the state, by statute, created an advisory board that required membership by a person “who can reasonably be expected to purchase individual coverage through the exchange with the assistance of a premium tax credit.”     Since it was clearly in our statute that we expected to get the subsidies and no one indicated at that time that this was not the case, then clearly it was never the intention of the writers of the ACA legislation to exclude federal exchanges from receiving subsidies for NH’s participants.  Regardless of how logical the argument is, however, it is now up to the nine judges on the Supreme Court to decide on the fate and future of those who rely on financial help to purchase their health insurance in our state.

While conventional wisdom suggests that the Court will rule that the type of marketplace exchange does not make a difference and all who are eligible for subsidies can continue to get them regardless of whether it is a state or federal exchange, we just won’t know until the ruling comes out.   A decision against those 34 states with federal exchanges  “could have a significant impact on the ACA’s success,” according to Brookings Institute’s Louse Schiener in her Primer for King vs. Burwell. However, Schiener continues, “it is likely that if the Supreme Court rules in favor of King, some states currently operating within the federal exchange would tweak their systems to be classified as a state-run exchange in order to keep their subsidies. States who do lose subsidies may find the loss of funds too painful and decide to set up their own exchange in order to regain their subsidies. “

What this means is that if the worst  happens, then it is up to all of us to work together to ensure that the current New Hampshire Health Insurance Marketplace does whatever is necessary to ensure that subsidies continue for those who are in most need of them.

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