In a much-anticipated announcement, the Supreme Court this morning issued its ruling on government subsidies that help lower income individuals buy health insurance in 34 states under the Affordable Care Act (ACA), saying that they are permissible.
The least you need to know
The case is known as King v. Burwell, and it challenged some of the wording in ACA. Specifically, it challenged whether ACA meant for the government subsidies to be available in all marketplace exchanges—those online shopping malls where people sign up for health insurance if they don’t get it from their employer—or just in the marketplace exchanges that the states themselves set up and operate.
The distinction is who runs the exchange: the feds or the state.
King et al. (“petitioners”) claimed that ACA only meant for state-run exchanges to have the subsidies and that the 34 states relying on the federally operated healthcare.gov exchange were not entitled to the cash. The Court upholds, however, that yes, all exchanges can have subsidies.
The Court basically said ACA would make no sense if the subsidies were only for state-based exchanges. In the ruling, Chief Justice Roberts also said that the Court can see how the wording of the law could be ambiguous and also that the arguments made in the case are unpersuasive.
More than you need to know
If you look at the case in detail, you can see the motivation behind it. The petitioners are four individuals who live in Virginia, who don’t want to purchase health insurance. In their view, Virginia’s exchange does not qualify for subsidies, so they should not receive any.
Well, so what?
Here’s the fallout of that: No subsidies would make the cost of buying insurance more than eight percent of their income, which would then exempt them from ACA’s coverage requirement entirely. If they could make the case that Virginia doesn’t get subsidies then they can get away without health insurance.
Of course, ACA mandates that everyone have insurance coverage, unless it’s unaffordable, and “unaffordable” translates into more than eight percent of your income.
What it means to you
Generally, you can rest easy because nothing has changed. If you accept Medicaid payment or commercial insurance at your treatment center, all is status quo. The growth in health insurance coverage will continue, albeit at a slower pace now that we’re 18 months into the coverage mandate. Your patient population that receives government help to buy commercial insurance will still get that help—based on income—from now on.
14 state-run exchanges;
3 federally supported exchanges;
7 state-partnership exchanges*;
27 federally run exchanges*
*These states would have lost subsidies had the court ruled in favor of King et al.