By Terrence Neal.
After surviving multiple attacks from Republican lawmakers, the Affordable Care Act (ACA) is being put to the test once again—this time in the Supreme Court case King v. Burwell.
The case is a challenge by King and three other Virginia residents who do not wish to purchase health insurance. Virginia has declined to establish a state-run health care exchange and therefore uses a federal exchange created by the Department of Health and Human Services (HHS).
Since the Virginians qualify for subsidies on the federal exchange, the reduced costs of insurance policies subject them to the ACA’s minimum coverage penalty. The penalty is essentially a fine for not having the minimum required health insurance. However, without the subsidies afforded to them the challengers would be exempt from buying health insurance because the cost of insurance would be unaffordable. Thus, the Virginians are contesting whether insurance subsidies are available to all qualifying taxpayers.
The challengers’ lawsuit argues that the ACA only makes tax credits available to taxpayers on state established health care exchanges. For instance, the Act directly states that subsidies are available to those who obtain coverage through “an Exchange established by the State under section 1311,” leaving out any mention of federal exchanges.
Such an interpretation of the statute would harshly affect the 37 states that operate on the Federal Exchange. According to the Urban Institute, 8.2 million Americans would lose their subsidies and ultimately their health insurance. Additionally, the American Public Health Association, along with other public health researchers, estimated that slashing tax credits in states with federal exchanges would result in 9,800 additional deaths per year.
In response, Obama Administration attorneys claim that the challengers are taking the provision out of context. For instance, the ACA explains that tax credits are available to all taxpayers, and that an exchange created on behalf of a state by the HHS is equivalent to a state established exchange.
During oral arguments earlier this month, the nine justices appeared to split along partisan lines, with the four liberal justices siding with the Obama Administration. A court ruling to uphold the argument would require a fifth vote from the Conservative side of the bench, which is far from assured.
Such uncertainty begs the question: “What would eliminating subsidies for taxpayers on the federal exchange mean for lawmakers?”
For starters, since eliminating the subsidies would cause millions of taxpayers to lose health insurance, remedying the policy would become a top priority for Congress. A quick, effective response from Congress would be to pass legislation expanding the availability of subsidies to individuals on the federal exchange. This could receive bipartisan support and protect those with subsidies from having a lapse in their insurance coverage.
However, with the Republicans who have fought to debase the ACA since day one having majorities in both bodies of Congress, there would likely be more attention towards repealing or replacing the ACA in its entirety. For instance, without the subsidies, the ACA cannot achieve it purpose of providing affordable insurance for all Americans and would cause problems for state health insurance markets. This would open the door for Republicans to push through their own health care reforms. Thus, saving the day and shining a positive light on the party ahead the 2016 elections.
Democrats would be dealt a tough hand because any actions that they could take to hinder the Republican agenda would obstruct a timely legislative response to aiding millions of Americans who would no longer have access to health insurance. This would cast a poor light on the party, which is already struggling to win elections. Nevertheless, if Democrats choose to battle the Republicans, they have proved as a minority to be a formidable force on issues, such as the funding of the Department of Homeland Security.
Furthermore, if partisan politics prove to be a blockade for Congressional action, states without exchanges have the option to establish their own exchanges, which would then allow their citizens to qualify for subsidies. However, this is not a desirable option because it would likely take too much time to prevent gaps in individual’s health care coverage.
In sum, a court ruling in favor of King would harm millions of Americans and hand lawmakers a formidable task of fixing a complicated, broken insurance system. The hope is that the Supreme Court will find that the ACA permits tax credits for individuals on the Federal Exchange, and ultimately protect millions of Americans from losing their health insurance.