On Tuesday morning, a federal appeals court for the case Halbig v. Burwell raised the question of whether premium subsidies should be authorized on the federal exchange in states where the government set up the insurance marketplace. One court ruled that the ACA authorizes subsidies in states that run their own exchange. However, another court ruled that the wording in the ACA is vague and ambiguous. The language used in the document is open because subsidies are essential to fulfilling the goal of the ACA, making healthcare affordable.
Will this decision affect Covered California?
This decision does not affect California because that is a state run exchange. This decision will determine whether only state run exchanges will be eligible to receive premium subsidies, meaning that all 36 states that opted out of setting up their own insurance marketplace would no longer be eligible to receive those subsides.
Who will be affected by this decision?
According to Business Week, this ruling could lead to the loss of subsidies for 4.7 million people. About 86% of the people who enrolled in the federal insurance marketplace qualified and received a premium subsidy. This decision will also have a large effect on the two biggest states, Florida and Texas, who had the biggest number of participants on the federal exchange. About 1/3 of all insurance subsidies from the enrollees on the healthcare.gov website went to someone in Florida or Texas. This means that if those participants lose their subsidies and become uninsured, those states will have to raise the prices of emergency care regardless of whether or not their patients will be able to pay.
While there are advocates, there are also opponents for the Supreme Court decision. The opponents believe that it is important to note that the cost of subsidies is expected to cost over $1 trillion dollars within the next ten years. By eliminating the subsidies in states that chose not to set up their insurance marketplace, the cost of the healthcare exchange would decrease significantly.