The U.S. Supreme Court is preparing to issue a ruling in King v. Burwell, the case challenging Affordable Care Act (ACA) insurance subsidies for residents of states — such as Texas — that did not set up their own health insurance Marketplaces.
Here are four things you should know about the ruling.
1. We are optimistic that the Supreme Court will uphold the subsidies.
We agree with the doctors, hospitals, insurance companies and others who believe that the ACA clearly intended to make these subsidies available in states that set up their own Marketplaces and those states that use healthcare.gov.
2. Regardless of the ruling, Texans with ACA coverage should keep paying their premiums and keep using their insurance.
If there is a ruling against subsidies in states like Texas, it may not affect your insurance overnight. The Supreme Court could delay the implementation of its ruling or Congress could act to maintain subsidies.
3. If the Court rules against the subsidies, Congress and the President will need to quickly develop a plan to protect coverage for Texans and other impacted Americans.
Texas leaders should also be prepared to take any additional state action needed to preserve coverage.
In the meantime, state leaders should accept federal Medicaid expansion funding so that Texans who are at 100-138 percent of the federal poverty level and at risk of losing ACA subsidies will not lose access to health care.
4. If the Court strikes down the subsidies and our elected leaders don’t take swift action, it will be a disaster for Texans.
The Texans who receive ACA subsidies for their health coverage – 832,000 people as of March – will lose that financial assistance. Subsidies in Texas average $247 per month, or almost $3,000 per year. Because subsidies to Texans pay 75 percent of the cost of premiums on average, people who lose subsidies will see their access to health insurance placed in jeopardy.
But that’s just the first move in what some observers are calling the “death spiral.” When those Texans and other Americans lose their coverage, but insurance companies are still required to cover individuals with pre-existing conditions, insurance premiums will skyrocket, adding new costs for those who keep their insurance and pushing more people to give up their insurance. Premium spikes will not be limited to just people losing subsidies. Everyone who buys coverage directly from insurers, as is common for the self-employed and employees of small businesses that don’t offer coverage, will see dramatic premium increases. Experts predict that increasing premiums would cause 1.4 million Texans to become uninsured in 2016.
Once the Court ruling is issued, be sure to check back for more information.
A version of this post also appeared on Texas Well and Healthy’s The Texas Treatment Blog.