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Tag: King v. Burwell

Implementing Health Reform: The Supreme Court Upholds Tax Credits In The Federal Exchange

The Supreme Court has spoken, and the Affordable Care Act (ACA) has survived yet another near-death experience. In a decisive opinion, written for six of the Court’s nine justices, Chief Justice Roberts upheld the Internal Revenue Service (IRS) rule that allows low-and moderate-income Americans access to tax credits, regardless of whether they live in states where the federal or state government operates the marketplace.

The Background

King v. Burwell is one of four cases that have been brought by ACA opponents asking the courts to invalidate an Internal Revenue Service rule that allows federally facilitated exchanges (FFEs, also called federally facilitated marketplaces) to make available advance premium tax credits to help Americans purchase health insurance.

The Affordable Care Act reformed health insurance underwriting to prohibit insurers from considering preexisting conditions in deciding whether to cover individuals and determining how much enrollees are charged in premiums. It also required individuals who could afford coverage to get coverage or pay a penalty. To ensure that insurance was affordable, the ACA offered premium tax credits to low- and moderate-income people.

These tax credits were offered through entities that were called “exchanges” in the legislation, and are now called marketplaces. The exchanges were intended to increase competition among insurers and augment the choices available to enrollees, but also to provide an access point through which tax credits could be made available to help pay premiums as they became due on a monthly basis.

The Senate version of the ACA — which was eventually adopted by both houses with modifications that could be made through the Health Care and Education Reconciliation Act — located the exchanges in the states. It provided, however, that if a state chose not to establish its own exchange, the Department of Health and Human Services would provide “such exchange” for the states.

Dozens of provisions in the ACA indicate that the federally facilitated exchanges were supposed to function just like the state-operated exchanges. One provision of the law, however, which added section 36B to the IRS code to provide for the tax credits, twice refers to enrollment through an “Exchange established by the State” as a seeming condition of eligibility for tax credits.

Read the full report here.

Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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King v. Burwell Decision

King v. Burwell Decision

First, as any of us who know the market can appreciate, the Court just saved the Republicans from themselves. They were in no way ready to avoid the crisis that would have engulfed the individual market––half of those people on the exchange who would have lost their subsidies and the other half off-exchange that would have seen 30% to 50% rate increases––on top of the big increases already announced––without a quick fix.

Does this mean that Obamacare has cleared its last major hurdle?

Not a chance.

Obamacare has only enrolled about 40% of the subsidy eligible market in two years worth of open enrollments. That level of consumer support does not make Obamacare either financially sustainable or politically sustainable. The surveys say the 40% who have enrolled like their plans. Of course they do, they are the poorest with the biggest subsidies and the lowest deductibles. The working and middle-class have most often not signed up for Obamacare because it costs too much and delivers too little.

That Obamacare is not financially sustainable is evidenced by the first wave of big 2016 rate increases by so many large market share insurers. The next wave of rate increases a year from now will also be large and will be in the middle of the 2016 election.

These rate increases will further undermine the political sustainability of the law that has been reflected in five years of polling.

The attempt to scuttle the law through the Supreme Court was ill conceived and Republicans are very lucky it did not happen.

Now Obamacare has to stand on its own going into the 2016 elections and the growing evidence is that won’t be any easier.

By Professor Laszewski’s

Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

Cosby Insurance Group Warrenton Health Insurance Broker and Agent

Big Impact on Women if Supreme Court Rules Against Health Care Tax Credits

Seven months after being diagnosed with breast cancer and later undergoing a double mastectomy, LaDonna Appelbaum of St. Louis recently finished her 16th and final chemotherapy treatment.

Without the $600 monthly tax credit that pays the bulk of her insurance premium under the federal health care law, Appelbaum isn’t sure how she and her husband, Tom, would have paid for her medical care.

She still faces 33 radiation treatments, several reconstructive surgeries and a host of medical challenges.

And while she’s optimistic about the complex care that lies ahead, Appelbaum worries that the U.S. Supreme Court could declare illegal the tax credits that help make it possible.

The high court is expected to decide in June whether to continue the tax credits for Appelbaum and others who live in the 34 states where the federal government operates the health insurance marketplace.

The stakes are not only high for Appelbaum but for all women who make up a majority of marketplace plan enrollees.

Plaintiffs in the King v. Burwell case argue that a section of the Affordable Care Act says the tax credits can only go toward coverage purchased “through an exchange established by the State.”

If the plaintiffs prevail and tax credits are disallowed in Missouri and 33 other states, millions of Americans could immediately find their insurance unaffordable and subsequently drop coverage.

The majority of those coverage losses would likely fall on women. Females probably account for 54 percent of the 8.6 million marketplace plan members in the 34 states that rely on the federal exchange at HealthCare.gov.

And national trends suggest that roughly 87 percent of these women – nearly 4.2 million – receive tax credits that could be lost if the Supreme Court decides that the subsidy is illegal.

Losing their coverage means they no longer would benefit from consumer protections in the health law that outlawed discrimination against women in the individual insurance market.

Although her husband is an attorney in private practice, Appelbaum said business is slow and they can’t afford their $900-per-month insurance premiums without the subsidy.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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The Obamacare Supreme Court Challenge Over Subsidies

The Supreme Court heard oral arguments yesterday in the King v. Burwell case that would throw out the Obamacare subsidies for millions of people now receiving them in the federally run health insurance exchanges.

It sure sounded like perennial swing vote Justice Anthony Kennedy is ready to save the subsidies and Obamacare given his comments suggesting a finding for the plaintiffs would end up coercing the states into building an insurance exchange––something that would present Kennedy with a “serious constitutional problem.”

But I was also struck by this line in a Washington Post article about the oral arguments: “More than the other justices, Kennedy is the one most likely to think out loud during oral arguments, trying out various theories and posing quandaries for lawyers.”

Translated: It ain’t over til it’s over.

At one point, conservative Justice Samuel Alito asked if perhaps the Court could delay the effect of a ruling ending the subsidies thereby giving the Congress and the states time to remedy the fallout.

Will this be the tack the conservative Justices will follow to get another perceived swing vote, Chief Justice John Roberts, on their side this time?

Many observers have been wondering out loud, including me, how Roberts would vote to deal Obamacare such a serious blow now when he didn’t three years ago in the face of the challenge over the constitutionality of the individual mandate.

By finding for the plaintiffs and then allowing a substantial period before the ruling takes effect, conservative Justices might argue, either the Congress would have time to fix the problem or states would have the time to decide whether or not to set up an exchange and keep the subsidies for their residents.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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