Slightly old news, but since the Washington Update was on a two-week holiday hiatus we thought we’d mention it in case you missed it. On December 22, the U.S. Supreme Court announced it will hold oral arguments March 4 in the King v. Burwell case involving whether people buying health insurance via federally facilitated and partnership exchanges can legally receive premium tax credit subsidies. This means that attorneys from both sides will get their chance to bring their cases to the Justices in person on March 9 and be asked questions. The Justices will issue their ruling based on both the oral arguments and written briefs presented much closer to the end of their term, likely in late June of this year. As with all Supreme Court cases, this will not be televised. An oral recording and transcripts of the hearing will be posted to the Court’s website on the same day of the hearing. Court watchers can also point their browsers to http://www.scotusblog.com/ for the most up-to-date details on the case.
This case is critical because currently 37 states rely in whole or in part on the federally facilitated marketplace to operate their exchanges. Last year, approximately 7.3 million Americans purchased individual insurance through health insurance exchanges, including approximately 5 million through the then 34 federally run marketplaces. Four out of five of these individuals (approximately 4 million) received subsidies distributed because they earned 400% of the federal poverty level or less, and weren't eligible for Medicaid.
Two academic analyses released this week show that if the Supreme Court rules that subsidies provided by the federal marketplace are illegal, individual coverage in those states could drop by up to 70% or more and premiums will skyrocket due to adverse selection. RAND issued a report indicating that a ruling for King would mean that all individual market enrollment (on and off the exchanges) will drop by 70% and over 9.8 million Americans will go without coverage. They also predict an average premium increase of 47% or about $1,610 for a 40 year-old nonsmoker in a silver-level plan, the researchers find. A separate paper by the Urban Institute and the Robert Wood Johnson Foundation echoed these findings. They found that 9.7 million nonelderly adults would drop their individual coverage and the number of uninsured Americans would go up by 8.2 million in 2016 and predict an average premium increase of 37%, or $1,460.