Supreme Court case further adds to uncertainty around the Affordable Care Act

March 24, 2015
Policy-Politics-Regence(4)
By Julie Barnes, Director of Health Policy

At the end of June 2015, the U.S. Supreme Court is expected to issue a decision on King v. Burwell that will determine the legality of providing federal subsidies to individuals enrolled through the federally facilitated marketplaces.

The case centers on the interpretation of a section of the Affordable Care Act (ACA) that references premium subsidies as available to a taxpayer enrolled in a health plan “through an Exchange established by the State under section 1311.” At issue is whether the IRS regulation implementing this provision is unlawful when it authorizes such subsidies in all exchanges, whether an exchange is established by a state or the federal government.

To date, there are more than 11.7 million individuals enrolled through Healthcare.gov. An estimated 87 percent of enrollees qualify for premium tax credits, cost-sharing reductions or both. If the federal marketplaces are prohibited from offering subsidies to enrollees, the insurance plans offered on the individual exchanges in 34 states would be unaffordable for the great majority of individuals.

Accordingly, the decision will have a great impact on the stability and functionality of the individual insurance market, as well as implications for the decision-making for employer groups who may reconsider offering and subsidizing employee health care coverage. More on this topic as the June decision date nears.

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