The Affordable Care Act could collapse
In June, the eyes of Texas will be upon the U.S. Supreme Court as it decides the King v. Burwell case.
We should all be concerned about the result of this lawsuit. The Affordable Care Act could collapse under it.
If plaintiffs prevail, about 8 million people could lose health insurance. Premiums could soar by 35-50 percent, threatening coverage for millions of residents.
Health policy experts have estimated that nearly 10,000 people a year could die prematurely if they lose their coverage.
The ACA offers individuals a chance to purchase competitively priced health insurance on American Health Benefit Exchanges that may be run by either the states or the federal government.
It also authorizes a federal tax credit for low- and middle-income individuals who purchase insurance on the exchanges.
The Internal Revenue Service issued a regulation confirming that the federal tax credit is available to all financially eligible Americans, regardless of whether they purchase insurance on a state-run or federally facilitated exchange.
Plaintiffs in this case filed a lawsuit in the U.S. District Court for the Eastern District of Virginia challenging the IRS rule on the ground that the ACA authorizes tax credits only for individuals who purchase insurance on state-established Exchanges.
ACA opponents argue that the purpose of the tax credit is to induce states to set up their own exchanges, under penalty of withdrawal of those credits and subsidies if states choose to allow the federal government to operate exchanges in their stead.
The Court will hear oral arguments March 4.
Subsidies are provided by tax credits. They are available to working low- and middle-income individuals with a gross income between 100 percent and 400 percent of the federal poverty level. In 2015, this would be $11,670 to $46,680 for individuals and $23,850 to $95,400 for a family of four.
If the court rules for the plaintiffs:
▪ People receiving subsidies will lose them. Up to 93 percent of those enrolled for health insurance in exchanges are eligible for subsidies, so the ruling could cut a wide swath through the nation.
▪ Premiums could rise 35-50 percent for everyone purchasing health insurance on the individual market. Without subsidies, healthier enrollees facing these staggering increases would be less likely to keep individual coverage.
This means a larger percentage of enrollees will be sicker and necessitate a corresponding increase in premiums, which in turn would force additional enrollees to drop their coverage.
▪ Insurers will drop out of individual insurance entirely, causing the market to collapse.
According to a 2014 poll by the Kaiser Family Foundation, 78 percent of Americans have a favorable view of the creation of exchanges, while 76 percent approve of financial assistance for low- and moderate-income people to pay for health plans.
These considerable numbers are difficult to ignore.
The majority of those without health insurance come from working families.
Insurance coverage improves physical and mental health and reduces the financial strain associated with healthcare costs.
This Supreme Court decision will have a profound effect upon our state. It could jeopardize the health insurance of 1.5 million of your neighbors.
We can’t let this happen. We need to protect access to healthcare for everyone.
W. Stephen Love is president and CEO of the Dallas-Fort Worth Hospital Council.
This story was originally published February 13, 2015 at 7:18 PM with the headline "The Affordable Care Act could collapse."