What Will Happen if Court Nixes ACA Health Insurance Subsidies? It’s Not Pretty

If the Supreme Court decides to eliminate health subsidies, damaging ripples will be felt throughout the U.S. economy.

What Will Happen if Court Nixes ACA Health Insurance Subsidies? It’s Not Pretty Photo (cc) by LaDawna's pics

Many Americans have a lot riding on the Supreme Court’s ruling in the latest lawsuit challenging the Affordable Care Act.

The future of federal tax credit subsidies on health insurance hangs in the balance. If the plaintiffs prevail in King v. Burwell, more than 7.5 million Americans in 34 states who purchased insurance on federal health exchanges are at risk of losing their health coverage because they need tax subsidies to afford their insurance.

The plaintiffs in the case argue that the ACA only authorizes health tax credits to customers of an exchange operated by a state, not the federal government. The federal exchange, HealthCare.gov operates in 34 states, while the remainder of states have their own exchanges.

The New York Times warns that ending health subsidies would be devastating:

State economies would suffer, insurance markets would be disrupted, millions of people would lose coverage, hospitals and insurance plans that have counted on revenues from newly insured people would be left high and dry, and people who continue to hold policies would pay a lot more for them. The health care markets in which individuals and families buy their own policies — on the exchanges and outside them — would fall into chaos.

A Rand Corp. study paints an even gloomier picture. Rand estimates that 9.6 million Americans would likely lose coverage if health subsidies are eliminated, and unsubsidized premiums would skyrocket by 47 percent in the 34 federally facilitated marketplace states.

“This corresponds to a $1,610 annual increase for a 40-year-old nonsmoker purchasing a silver plan,” Rand said.

According to CNBC, nearly 12 million people have enrolled for health insurance through government marketplaces. Sylvia Burwell, U.S. Secretary of Health and Human Services, estimates that 9 in 10 HealthCare.gov customers average tax credits of about $263 per month. Burwell said more than half of health subsidy recipients pay $100 or less per month for their health insurance.

How would you like to see the Supreme Court rule on the Obamacare health subsidy case? Share your comments below or on our Facebook page.

Krystal Steinmetz
Krystal Steinmetz
A former television and radio reporter, I stay at home with my two young children, run a small craft business and freelance for Money Talks News. I have a BA in journalism ... More

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