King v Burwell Ruling

Today the Supreme Court ruled (6-3) that the federal health insurance subsidies shall remain available to individuals in the 37 states using www.healthcare.gov. This decision means that the major coverage provisions of the Affordable Care Act will proceed as planned. 

Here are links to recent headlines and resources on the topic:

• CommonWealth Fund Blog: Coverage and Financial Security Preserved for Millions of Americans in the Supreme Court Ruling for the Government
• Wall Street Journal Blog by Drew Altmann: After King v Burwell Ruling, Health Law Issues Involve Implementation
• Modern Healthcare: Guide to King v. Burwell
• Reuters: Supreme Court upholds key Obamacare insurance subsidies

Kaiser Family Foundation: A Guide to the Supreme Court Argument in King v. Burwell

The Kaiser Family Foundation has released new materials examining the policy implication and legal arguments in the U.S. Supreme Court’s King v. Burwell case.

The Supreme Court is set to hear oral arguments on March 4. A new Policy Insight from the Kaiser Family Foundation's Larry Levitt and Gary Claxton explores the policy implications for consumers and insurance markets if the Court were to side with the plaintiffs in the challenge to the Affordable Care Act’s consumer subsidies. 

A second issue brief by KFF’s MaryBeth Musumeci, a policy analyst and an attorney, explains the legal arguments underlying the case.

At issue in the case is whether the federal government can provide premium and cost-sharing subsidies to consumers who buy insurance in states that do not establish their own ACA Marketplace and instead rely on a Federally-facilitated or Partnership Marketplace. In 2015, roughly 7.5 million people who have signed up for coverage in the 34 states that use the federal Marketplace qualify for subsidies, or 87 percent of all people who picked a plan in such states.

The new Policy Insight, Insurance Markets in a Post-King World, explains that a Court decision to cut off such subsidies would cause millions to go without coverage, make the vast majority of consumers who were receiving subsidies exempt from the ACA’s individual mandate, and disrupt insurance markets by leaving insurers with a sicker pool of people to cover and limited ability to generate enough premium revenue to cover health costs. In some cases, insurers may choose to exit the individual market in affected states rather than face significant losses, according to the analysis. Governors, state legislatures and Congress would face pressure to take steps to preserve subsidies, but there are political and logistical challenges to doing so quickly.

The issue brief, Are Premium Subsidies Available in States with a Federally-run Marketplace? A Guide to the Supreme Court Argument in King v. Burwell, walks through legal aspects of the case, from who the plaintiffs are to what each side is seeking from the Court and how this legal challenge differs from other ACA cases already decided by the Court. It also explains the legal test that the justices are likely to apply in the case and the potential actions the Court could take.

For more on health reform and the King v. Burwell case, visit kff.org.

States Opting Out of Medicaid Could Have Negative Consequences for Employers

It’s not just hospitals who stand to take a financial hit if states don’t fully expand their Medicaid programs. Employers could find themselves the subject of some collateral damage, too. If Congressional Budget Office projections are correct, about 3 million more low-income individuals will be added to health insurance exchanges — rather than Medicaid — as a result of the Supreme Court decision making the Medicaid expansion optional. That means there will be a larger group of low-income people who could trigger the Affordable Care Act’s employer penalty.

In states that don’t take the Medicaid expansion, individuals with incomes between 100 percent and 138 percent of the federal poverty level would be eligible for premium tax credits and cost-sharing subsidies to purchase exchange coverage. If an individual in the new exchange population works for a firm of at least 50 employees, the employer could be dinged by the penalty for not providing affordable or comprehensive insurance.

HHS says it won’t impose a deadline on states to decide if they’ll expand their Medicaid programs, though the department says states would have to figure that out soon to expand in time for 2014. Also importantly, HHS hasn’t said whether states can partially expand their programs and still get the Affordable Care Act’s generous matching rate, even though the CBO assumed the administration would allow partial expansions.

And if states could partially expand their programs, it wouldn’t likely be of much help to employers. States may look to expand their programs to 100 percent of the federal poverty level to ensure that everyone has some coverage, but it would still mean 3 million people who would have been eligible for Medicaid would wind up in the exchanges. Those new exchange populations aren’t cheap to cover, either. They’ll earn less than people previously expected to enroll in exchanges, so they’ll get a higher share of federal dollars. And they’re likely to spend more on care, because they’re generally in poorer health, the CBO said.

Coalitions have an important role to play advocating for Medicaid expansion at the state level.

Coalitions weigh in on Supreme Court ruling

Yesterday's ruling from the Supreme Court to uphold the Affordable Care Act, including the individual mandate that all Americans buy health insurance, has removed much of the uncertainty that has dogged the health care industry for the last two years.

For employers and coalitions working to improve health and health care at the community level, more certainty is a good thing. NBCH and its member coalitions will continue moving forward with innovative efforts to influence changes in the payment and delivery systems.

Check out what NBCH and its member coalitions are saying on this topic: USA Today, Dallas Morning News, Chicago Tribune, Crain's ChicagoBusiness, The Orange County Register, Maine Public Broadcasting Network and Wisconsin State Journal.