ACA Ruling Could Jeopardize Floridians' Access To Health Insurance Subsidies

Jul 22, 2014

Two federal appeals courts have issued contradictory rulings that could affect how much Floridians pay for their federally subsidized health insurance. The future of the Affordable Care Act is in question once again, and experts are split on what could happen.

Florida State University law Professor Franita Tolson believes the issue of whether the federal government can subsidize health plans offered on the exchange it created will eventually be decided by the U.S. Supreme Court.

“Given the contentiousness of the issue, and the fact there may be five justices on the Supreme Court that agree with the initial D.C. circuit court’s opinion, I still think the U.S. Supreme Court will take the case," she says. 

The Affordable Care Act gave states the option of creating their own exchanges or letting the federal government run one for them.  More than 30 states including Florida chose the federal option. A three-judge panel on a Washington, D.C., court of appeal ruled 2-1 Tuesday the health insurance subsidies are only for states that created their own insurance exchanges.

The Competitive Enterprise Institute, a free-market think tank that backed the challenge, agrees with the the D.C. appeals court’s ruling.

“You have quite a few people who don’t want the insurance. Our lead plaintiff...is one of those. His income is so low he qualified for the un-affordability exemption and not have to be in the program, except for that the subsidies put him back in under the mandate," CEI General Counsel Sam Kazman says.

The law calls for fines for people who don’t have health insurance but exempts those who don’t qualify for Medicaid or whose insurance costs exceed a certain percentage of their income. The law’s language also says the insurance subsidies are for state-run exchanges.  

But within hours of the first ruling, a different appeals court in Virginia ruled the subsidies on federal exchanges can stand.  Now the federal government wants all the judges on the D.C. court to rule on the case in the hope of a more favorable outcome.

Linda Blumberg, senior fellow in health policy with the Urban Institute, says if the full D.C. appeals court rules in the federal government’s favor, a U.S. Supreme Court hearing on the issue becomes less likely.

"There would be no division between those courts of appeal. The Supreme Court could do what it likes obviously, but it’s less likely when there’s uniformity in the lower courts for things to be heard by the Supreme Court," she says. 

The Urban Institute estimates Floridians could lose $4.8 billion  in health insurance subsidies if they be struck down.  The vast majority of the more than 1 million Floridians enrolled in ACA plans qualified for subsidies, something needed to make the coverage affordable to them. The ACA and its consumer protections depend on having large numbers of people enrolled in the exchanges to minimize risk and control costs.  The dueling rulings won’t have any immediate impact on current policy holders.

“It’s very important for consumers to understand that if they are getting financial help to pay for the health insurance they bought in the marketplace, that help is still available to them," says Athena Ford, spokeswoman for the healthcare advocacy group Florida Chain.