U.S. Supreme Court Upholds ACA/Obamacare Health Insurance Subsidies

Jun 25, 2015

Infographic via Kaiser Health News/Kaiser Family Foundation shows what type of insurance exchange is used by each state.
Credit Kaiser Family Foundation

The healthcare advocacy group Families USA recently reported more than a million Floridians could’ve either lost their insurance or seen prices rise dramatically had the U.S. Supreme Court rule against the subsidies.

“If they lost these subsidies, it would increase to $376 a month. In other words, it would four-and-a-half times as large. It means individuals would be paying on average $294 a month in premiums or on an annual basis, $3,528 more,” said Families USA Executive Director Ron Pollack.

Florida has led the nation in health insurance sign ups through the federal government’s healthcare.gov website, and the average premium according to Families USA, is about $82 a month. Floridians will get to keep those heavily subsidized prices, now that the U.S. Supreme Court has backed the federal government in King v. Burwell. It’s a move the law’s supporters are praising. Georgetown University healthcare policy expert Joan Alker says the ruling could also push states like Florida which have resisted full implementation of the Affordable Care Act, to finally do so.

“What it says, is that the highest court in the land has upheld the Affordable Care Act twice now, and health reform is here to stay," said Alker. "And it’s time for opponents to understand that, start rolling up their sleeves and start the hard work of making health reform work in Florida and around the country.”

The King v. Burwell lawsuit hinged on whether subsidies for premiums on the federal government’s insurance exchanges were legal. In a blistering dissent, Supreme Court Justice Antonin Scalia says, they aren’t. The ACA states the subsidies are only for people who signed up for coverage, quote: “through an exchange established by the state.” Scalia says the Supreme Court has basically re-written the law.

 “The court holds that when the Patient Protection and Affordable Care Act says, “exchange established by the state, it really means, “exchange established by the state or the federal government," Scalia writes. "This is of course, quite absurd, and the Court’s 21 pages of explanation make it no less so.”

Now it’s Florida’s turn. While praising the U.S. Supreme Court’s ruling, President Obama also targets the Sunshine State. It and others have been slow to fully implement the Affordable Care Act.

“I’m going to work as hard as I can to convince more governors and state legislatures to take advantage of the law put politics aside and expand Medicaid and cover their citizens. We still have state’s out there, for political reasons, are not covering millions of people they could be covering, despite the fact that the federal government’s picking up the tab," the President said.

Florida lawmakers will return to begin their work for the 2016-2017 fiscal year in September. And Florida leaders say many of the healthcare fights, such as whether to expand Medicaid to more people, will return.

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Breaking: The U.S. Supreme Court says millions of Americans will be able to keep their subsidies for insurance plans purchased on the federal government's health insurance exchange, healthcare.gov.

The subsidies were challenged in the case King V. Burwell. The case centers on a sentence in the Affordable Care Act which says the  subsidies are available people who signed up for coverage, “through an exchange established by the state.”

Most states are using the federal government's insurance exchange. Some systems failed and forced the use of the federal exchange, but most state's refused to set up their own.  Three years ago the Internal Revenue Service, through regulation, expanded the use of the subsidies to the federal exchange.

From Kaiser Health News:

"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. Those challenging the law insist that Congress intended to limit the subsidies to state exchanges, but the Obama administration says the legislative history and other references in the law show that all exchanges are covered. Many lawmakers and staff members involved in the debate agree.

Florida has led the nation in ACA health insurance enrollment. More than 1.3 million Floridians currently have a subsidized health plans, paying an average of $82 a month. According to a recent report from the healthcare advocacy group Families USA, if  those subsidies disappeared, premium costs could have quadrupled in the state.

“If they lost these subsidies, it would increase to $376 a month. In other words, it would four-and-a-half times as large. It means individuals would be paying on average $294 a month in premiums or on an annual basis, $3,528 more," said Families USA's Ron Pollack.

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