BREAKING: Supreme Court Will Hear Challenge To Obamacare Subsidies


The Supreme Court has agreed to hear a new challenge to the Affordable Care Act (ACA), without waiting for a split in appeals decisions. This is a rare move for them, as the high court often waits until they see a real need to resolve different rulings from appeals courts on the same issues.

USA Today reports that the part of the ACA that’s under fire is the federal subsidies for premiums. The 4th Circuit Court of Appeals upheld the subsidies in a unanimous decision, which made the plaintiffs appeal to the Supreme Court. The question is whether the subsidies can legally apply to exchanges that the federal government created, because the specific language of the bill says that it applies only to state-created exchanges.

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Should the Supreme Court strike the subsidies down, it would not only be a major blow to the ACA and to President Obama, but it would make insurance in a whopping 36 states unaffordable again. In fact, it would undermine one of the very things that makes the ACA successful.

According to The New York Times, roughly 10 million people have insurance under the ACA that didn’t have it before. The subsidies get subtracted from premiums, making the premiums far more affordable to Americans than they would otherwise be. In some cases, people are only paying a few dollars per month out of pocket for their premiums. From 2013 to 2014, the rate of uninsured Americans in the general population dropped from 16.4 percent to 11.3 percent.

The biggest winners, according to the Times piece, are blacks and Latinos, the poor, people between the ages of 18 and 34, and people living in rural areas. Rural areas tend to be conservative enclaves, and yet, they’re benefiting from a law that their representatives keep vowing to repeal.

A ruling in the plaintiffs’ favor could mean as many as 6 million people (or even more) would lose their insurance due to lack of affordability. That could make the political climate in red states very interesting, should enough people find themselves unable to afford their premiums, and thus, without insurance, again.

Of course, it’s entirely possible that some states would decide to pick up the slack, or create their own exchanges so their residents could once again buy insurance. That’s a remote possibility, however, because most states have budget problems, and would find themselves unable to pay for the subsidies that should be coming from the federal government’s coffers.

A ruling in the plaintiffs’ favor would also eliminate the tax penalties that employers must pay if their employees get subsidized on the exchange, due to the company not offering them insurance, as the ACA requires. In short, if the Supreme Court rules that the subsidies on the federal exchange are illegal, then the backbone of the ACA collapses entirely, and we’ll be back where we were in 2008 and before.

 

Featured image by Official White House Photo by Chuck Kennedy. Licensed under Public domain via Wikimedia Commons

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