Will King vs. Burwell Tear Down the Health Care Law?

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    Quick answer: No….

    brown gavel and a medical stethoscopeKing vs. Burwell is the case now before the Supreme Court, currently scheduled to be heard on March 4th, 2015. The Court will consider whether subsidies that help make premiums affordable for individuals are available in federally facilitated exchanges as well as the state-run exchanges. Currently 36 exchanges are federally facilitated, while 14 states operate exchanges that are technically “established by the state”. That term is in quotes because it is lifted directly from the Affordable Care Act legislation.

    And that is the crux of the debate: according to the law as written, subsidies are offered only to covered individuals who bought their policies on an exchange “established by the state”. Many policy experts, however, insist the intent of the law is to offer subsidies to all individuals, even when the policy is bought on a federally facilitated exchange.

    Impact

    This is not an attempt to predict the Supreme Court’s decision, nor take a position on which decision is correct. The question here is what impact will the Supreme Court’s decision have on the health law, specifically the viability of the exchanges? If the Court states that the intent of the law overrides the letter of the law, then their decision will essentially mean the status quo continues and that the exchanges will not be impacted.

    Should the Court decide the letter of the law is paramount and subsidies are not available on federally facilitated exchanges, it is likely the exchanges will still survive. States who let the federal government operate their exchanges could see many of their citizens facing significantly higher premiums for products they are required by law to purchase. About 80% of individuals receive a subsidy, so the vast majority of exchange participants would suffer this fate. Because the subsidies cost the states literally nothing, we can expect states to establish some kind of state operated exchange, even in states lead by Republicans. We may also see some action in Congress that authorizes a one or two year grace period that allows the subsidies to flow during the time exchange operations are shifted from the federal government to the state governments.

    TL;DR – No.

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