A Supreme Court ruling that strikes down federal subsidies for health insurance would pull coverage away from millions of people who have it now and send premiums soaring, according to two reports issued Thursday.
The Supreme Court has agreed to hear a case challenging the 2010 Affordable Care Act’s provision that offers hefty federal subsidies to many people buying health insurance on the new federal and state health insurance exchanges. Just under 7 million people got health insurance that way last year and the Obama Administration said this week that 6.6 million have signed up for 2015. They have until Feb. 15 to do so.
The lawsuit claims that the government cannot subsidize policies bought on the federally run exchanges that 34 states are using. It cites the law’s wording. The case, called King v. Burwell, is scheduled to be argued on March 4 and a ruling is due by the end of June.
“The departure of young and healthy people from the health insurance market would cause premiums to rise further."
One report, from the RAND Corporation, forecasts that 9.6 million fewer people would buy health insurance if the court rules the subsidies are unconstitutional. Premiums would rise by 47 percent in the states that use the federal exchange, it says. “This corresponds to a $1,610 annual increase for a 40-year-old nonsmoker purchasing a silver plan,” RAND said.
“Without subsidies, the young and healthy are potentially exposed to higher premiums than they were before implementation of the ACA (Affordable Care Act) because the law prohibits insurers from using health history in developing premiums (except for an enrollee’s smoking status) and restricts insurers’ ability to charge lower premiums to younger enrollees,” RAND added in its report.
“The departure of young and healthy people from the health insurance market would cause premiums to rise further, leading to a cycle of additional departures and further premium increases.”
“The Court’s decision could significantly undermine the stability of insurance markets in dozens of states."
The Urban Institute and Robert Wood Johnson Foundation issued their own report Thursday that says 8.2 million people would stop buying insurance and predicting average premiums would go up by 35 percent or $1,460 a year.
“The Supreme Court’s decision will have far-reaching effects on the number of uninsured Americans and premiums,” said Andrew Hyman, senior program officer at the Robert Wood Johnson Foundation, a non-profit health research group. “The Court’s decision could significantly undermine the stability of insurance markets in dozens of states, which will impact those who are covered as well as the remaining uninsured.”
The Obama administration says it hopes 9 million people will buy health insurance on the exchanges this year.