Supreme Court Could Leave Millions without Insurance

Supreme Court Could Leave Millions without InsuranceA ruling from the Supreme Court could pull the rug out from under millions people covered by the Affordable Care Act in only a few weeks. The court could repeal a law that subsidizes private insurance to 8 million people without access to it on the job in 34 states. Challengers to this law claim that it is worded so literally that it enables the government to subsidize coverage only in states that establish their own health insurance markets. “People who are reasonably healthy would just drop coverage,” former Kansas insurance commissioner Sandy Praeger said. “Only the unhealthy would keep buying health care. It would really exacerbate the problem of the cost of health insurance.”

As a Republican, Praeger may as well be speaking for the GOP governors that head 26 six of those states. And while the ruling could affect next year’s elections, its fallout could be felt much sooner. When the decision comes out in late June, insurance firms will be finalizing their premiums and plans for next year, but if the subsidies are invalidated those plans might as well be the same as those of mice and men that often go awry, affecting many states, including populous ones like Texas, Florida, Ohio, Illinois, New Jersey, Georgia and Pennsylvania. These states could soften the blow by setting up their own healthcare exchanges, but like Rome, those aren’t built in a day.

If the subsidies do go, the rest could collapse like a Jenga tower.  Insurers can’t legally reject people over pre-existing conditions, healthy people must contribute to the insurance pool, and the federal government subsidizes the majority of the premium for low- to middle-income households. But without the subsidies, nothing else could be taken for granted, especially the requirement to get insurance, which wasn’t all that well received to begin with. “My guess is there would be overwhelming political support for the elimination of the individual mandate if people can't afford the premiums,” former Sen. Tom Daschle said.

Moreover, even though many people such as small-business owners, self-employed professionals and early retirees cut out the federal market middle man and still buy individual insurance directly from an insurer, they would still not come out smelling like roses. Should too many people leave the healthcare exchanges, premiums for direct buyers could rise to the point of becoming unaffordable for some. “It would set off cascading events,” Kaiser Family Foundation’s Larry Levitt said. “The individual market would empty out as premiums rise significantly.”

Meanwhile, Republican leaders are burning the candle at both ends, fighting the law and vowing to protect consumers. Sen. Ron Johnson introduced a bill that would continue subsidies for existing customers only on the federal exchange until September 2017. Additionally, Justice Samuel Alito hinted at possibly delaying the decision. In either case, it would be a case of kicking the can down the road for the next administration and Congress to deal with. Furthermore, “the president is likely to veto whatever we would propose, because we don't have a willing partner,” leader of a GOP working group on health care and Senator John Barrasso said.

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