No Bull, No Fluff, No Smudges
Your news source for
Flagler, Florida and Beyond

Subsidies For 1.4 Million Floridians In the Balance: What You need To Know as ACA Heads Back to Court

| March 4, 2015

The marble staircase at the U.S. Supreme Court buildiung.

The marble staircase at the U.S. Supreme Court buildiung.

The U.S. Supreme Court hears oral arguments in King v. Burwell at 10 a.m. Wednesday (March 4). The case challenges the authority of states like Florida to provide subsidies to people insured under the Affordable Care Act, because those states don’t have insurance exchanges of their own. Florida has the largest number of people enrolled in Obamacare, with more than 1.6 million, some 90 percent of whom are receiving subsidies. Should the court rule the subsidies illegal, the subsidies will be eliminated starting next year–in Florida and three dozen states–and the insurance system itself will likely fail, as it would not be sustainable in its current form. Below is a briefing on the case, including a narrative of what it means to individuals, a Q&A and a video interview. 

Five Things You Should Know

1: This case does NOT challenge the constitutionality of the health law.


The Supreme Court has already found the Affordable Care Act is constitutional. That was settled in 2012’s NFIB v. Sebelius.

At issue in this case is a line in the law stipulating that subsidies are available to those who sign up for coverage “through an exchange established by the state.” In issuingregulations to implement the subsidies in 2012, however, the IRS said that subsidies would also be available to those enrolling through the federal health insurance exchange. The agency noted Congress had never discussed limiting the subsidies to state-run exchanges and that making subsidies available to all “is consistent with the language, purpose and structure” of the law as a whole.

Last summer, the U.S. Court of Appeals for the Fourth Circuit in Richmond ruled that theregulations were a permissible interpretation of the law. While the three-judge panel agreed that the language in the law is “ambiguous,” they relied on so-called “Chevron deference,” a legal principle that takes its name from a 1984 Supreme Court ruling that held that courts must defer to a federal agency’s interpretation as long as that

interpretation is not unreasonable.

Those challenging the law, however, insist that Congress intended to limit the subsidies to state exchanges. “As an inducement to state officials, the Act authorizes tax credits and subsidies for certain households that purchase health insurance through an Exchange, but restricts those entitlements to Exchanges created by states,” wrote Michael Cannon and Jonathan Adler, two of the fiercest critics of the IRS interpretation, in an article in the Health Matrix: Journal of Law-Medicine.

In any case, a ruling in favor of the challengers would affect only the subsidies available in the states using the federal exchange. Those in the 13 states operating their own exchanges would be unaffected. The rest of the health law, including its expansion of Medicaid and requirements for coverage of those with pre-existing conditions, would remain in effect.

2: If the court rules against the Obama administration, millions of people could be forced to give up their insurance.

A study by the Urban Institute found that if subsidies in the federal health exchange are disallowed, 9.3 million people could lose $28.8 billion of federal help paying for their insurance in just the first year. Since many of those people would not be able to afford insurance without government help, the number of uninsured could rise by 8.2 million people.

A separate study from the Urban Institute looked at those in danger of losing their coverage and found that most are low and moderate-income white, working adults who live in the South.

3: A ruling against the Obama administration could have other effects, too.

Experts say disallowing the subsidies in the federal exchange states could destabilize the entire individual insurance market, not just the exchanges in those states. Anticipating that only those most likely to need medical services will hold onto their plans, insurers would likely increase premiums for everyone in the state who buys their own insurance, no matter where they buy it from.

“If subsidies [in the federal exchange] are eliminated, premiums would increase by about 47 percent,” said Christine Eibner of the RAND Corporation, who co-authored a studyprojecting a 70 percent drop in enrollment.

Eliminating tax subsidies for individuals would also impact the law’s requirement thatmost larger employers provide health insurance. That’s because the penalty for not providing coverage only kicks in if a worker goes to the state health exchange and receives a subsidy. If there are no subsidies, there are also no employer penalties.

4: Consumers could lose subsidies almost immediately.

Supreme Court decisions generally take effect 25 days after they are issued. That could mean that subsidies would stop flowing as soon as July or August, assuming a decision in late June. Insurers can’t drop people for non-payment of their premiums for 90 days, although they have to continue to pay claims only for the first 30.

Although the law’s requirement that individuals have health insurance would remain in effect, no one is required to purchase coverage if the lowest-priced plan in their area costs more than eight percent of their income. So without the subsidies, and with projected premium increases, many if not most people would become exempt.

5: Congress could make the entire issue go away by passing a one-page bill. But it won’t.

All Congress would have to do to restore the subsidies is pass a bill striking the line about subsidies being available through exchanges “established by the state.” But given how many Republicans oppose the law, leaders have already said they will not act to fix it. Republicans are still working to come up with a contingency plan should the ruling go against the subsidies. Even that will be difficult given their continuing ideological dividesover health care.

States could solve the problem by setting up their own exchanges, but that is a lengthy and complicated process and in most cases requires the consent of state legislatures. And the Obama administration has no power to step in and fix things either, Health and Human Services Secretary Sylvia Burwell said in a letter to members of Congress.

–Julie Rovner, Kaiser Health News

Julie Rovner Explains the Case:

What’s At Stake

BURNSVILLE, N. C.—It’s been a bitterly cold winter in the Blue Ridge Mountains for Julia Raye and her 13-year-old son, Charles. But despite the punishing weather, 2015 has been looking good: Raye is finally able to afford insulin and the other medications she needs to keep her diabetes under control.

She’s a self-employed auditor who relies on a $400 per month government subsidy to afford the private health plan she bought on healthcare.gov, the online federal marketplace for health insurance.

Before the Affordable Care Act made tax credits available to low- and moderate-income workers, Raye was uninsured. Back then, just one of her diabetes medications cost her $320.

“During that time, I had no insurance, and I really wasn’t taking my medicine. There were times when my sugars and things would get up to 600,” Raye said. “I remember getting to a point where the ambulance had to go take me in because I was pretty much in a diabetic shock.”

On Wednesday, the U.S. Supreme Court will hear oral arguments in a case that could cripple the Affordable Care Act and imperil financial assistance to 8.2 million health insurance shoppers like Raye in the states that rely on the federal health insurance exchange.

Since January 2014, Raye has had steady insurance, paying just $30 a month, while her son was covered by Medicaid, the public insurance program for low-income people. Treating her diabetes has improved her vision and the numbness in her feet, and, at age 48, she has gotten a long overdue mammogram.

Raye says she is watching the latest legal challenge to the Affordable Care Act with growing anxiety. If the court wipes out her subsidy, Raye says she wouldn’t be able to pay for treatment. Her diabetes would again worsen, she would be unable to work and she and her son would face financial ruin, she says.

In North Carolina, nine out of ten people who buy health coverage on the federal exchange receive a subsidy. If large numbers of people here and in other states lose financial assistance and drop their insurance, health policy researchers say insurance markets will be thrown into disarray.

“If you imagine someone who’s paying a hundred bucks a month and, all of a sudden, it’s $415 a month, which would be the average impact, then you could imagine some people are going to stop paying,” said Donald Taylor, an associate professor of public policy at Duke University. “You would imagine that the ones who wouldn’t stop paying would be the people who are the sickest, who need the insurance the most. And when you have only the sick people enrolled, that’s when you have what’s called death spiral.”

Health care economists say that would likely happen across the country. In three dozen states, the insurance marketplaces are run by the federal government because state lawmakers opted not to set up their own. If the Supreme Court wipes out financial help for those shoppers, the number of uninsured is expected to rise by 44 percent. The fallout would be heavily concentrated in the South: estimates show that of those who could become uninsured, 62 percent live in Southern states and 61 percent are white.

The Supreme Court last considered the Affordable Care Act three years ago in a case challenging the law’s constitutionality. Some court watchers say the fact that the justices agreed to hear this case—which many legal scholars considered a trivial statutory flaw—shows a renewed desire by the Court’s conservatives to upend the health law.

The lawsuit arose after a group of conservatives dissected the law after its passage. They noticed a six-word phrase that said financial assistance would be available to those who bought health plans through “an exchange established by the state.”

Michael Cannon, director of health policy studies at the Cato Institute, a conservative think tank, says the lawsuit “is about is the latest and most dangerous in a long line of false promises that the president had made about Obamacare. And this is not just a false promise, it’s also an illegal one.”

For its part, the Internal Revenue Service concluded Congress never intended to limit subsidies to shoppers only in state exchanges, and it issued a rule making them available in all states.

“With a colleague, I blew the whistle on this, and we complained the administration had no authority to do this,” Cannon said. “We began doing the legal research, we found out that this was actually an intentional feature of the law that the president was trying to rewrite.”

Rep. Sandy Levin, a Democrat from Michigan who chaired the Ways and Means Committee during passage of the health law, disputes Cannon’s assertion.

“That is just totally wrong,” Levin said. “I think the letter of the law, when you read the entire law, says that these credits were to be available to everybody, whatever exchange they were in.”

Even those who objected to the law never raised those concerns, he said. “What the opponents are trying to do is to look for any hook they can find, and the court should not allow them to find a hook that isn’t in existence that would tear apart the entire law.”

In Raleigh, N. C., that is exactly what Anna Beavon Gravely hopes will happen. Gravely is a community activist at North Carolina Family Action, a conservative political group. Now 26 years old, she has had to buy insurance on her own for the first time and was shocked by the cost.

“I don’t really see the return on it,” Gravely said. “It’s one thing to have [to] pay a monthly amount for cable or for Netflix, or HuluPlus, or a gym membership, because you’re getting something out of that. I feel like I’m not really getting anything out of my virtually $200 a month.”

Gravely says she rarely visits a doctor and doesn’t want the added benefits that the health law requires insurers to offer, including mental health and maternity coverage. She hopes the Supreme Court declares North Carolinians ineligible for financial assistance.

“I think that will help a lot of people understand the true cost of health care and what this does, how it’s driving up costs,” Gravely said. “It’s increasing the burden on middle-class families, on individuals like me who just want to have a plan that fits them and where they are in their life.”

More than four hours west of Raleigh, in the Blue Ridge Mountains, Julia Raye says health insurance was plenty expensive before the health law, when pre-existing conditions, including her diabetes, were not covered.

“I want to be able to go out and buy insurance,” Raye said. “But when they come back with figures like $800 a month, that is not logical. It’s half of what I bring in a month. I need this subsidy. This is what makes me be able to subsist. And there’s just no way I could function without it.”

After the Supreme Court hears oral arguments on Wednesday, a decision is expected by the end of June.

–Sarah Varney, Kaiser Health News and PBS Newshour

Print Friendly

22 Responses for “Subsidies For 1.4 Million Floridians In the Balance: What You need To Know as ACA Heads Back to Court”

  1. Obama 2015 says:

    Tell me again why this went to the Supreme Court? How does this help Americans? Sounds to me yet another it wasn’t my idea so I will kill it stance of the GOP. I can’t see one positive outcome for anyone but some 1%ers that have too much money anyway.

    • sw says:

      Its called taking your $$ and giving it to some one else.

      • Obama 2015 says:

        So what you’re saying giving the middle class a tax cut to buy insurance so they don’t go the ER and never pay for their care is a bad idea? Give me a break. Stop using talking points and use logic.

  2. confidential says:

    GOP push to doom Obamacare even while endangering people’s right to affordable Health Care. GOP governs only for the wealthy. Too bad that most GOP’s that vote these dudes in office believe too “they are wealthy and not affected by these feudal lobbying and negativity”. They will also take in the wrath sooner or later. Only the 1% benefits from opposing this President executive orders and proposals …and dudes you are not that wealthy! You dream and go around waving your featherless tails while bowing to the mighty barons and they won’t ever let you in to their exclusive circles…laughable.
    Here you have your also powerful buddy Netanyahu coming here on the back of the current elected POTUS demanding we go to work “for them” and pay for it too after they received over 20 billions of our hard earned taxes in the last 3 years or so alone. Meanwhile our dearest Conservatives the same ones that rolled their red carpet for him, demanding to denied health care for the very taxpayers that fund their pay checks and the foreign aid into the billions to that man’s country. What about we take away the luscious government health care funded by us to the whole GOP Congress and Senate? Just pathetic. Feudalism at its best…maybe even a new form of communism too? Hey this is supposed to be America.

  3. karma says:

    Maybe Nancy Pelosi should have read the bill before she passed it with all her fellow democrats. And now everyone on the left wants to blame Republicans. Go figure!!!

    • Obama 2015 says:

      If the GOP just set up exchanges in their states so their poor white voters could buy insurance this wouldn’t be an issue. Now the same people that voted for Ric Scott could lose their insurance because the tax break they received is now back in the pockets of the Insurance companies. .

  4. Sherry Epley says:

    To ALL those against paying taxes to share costs with other citizens of the USA. Let us see you live your life paying for your own private hospital/doctor/nurse/fire person/police/food and medicine inspector, etc. etc. Let’s see you create your own personal roads/power grid/educational system/clean water & air/protection against terrorists, etc. etc. etc.

    It certainly IS the “Republicans” who have brought this case to the Supreme Court and are doing everything they can to unravel the ACA and take away health care for millions of Americans simply to OBSTRUCT our twice elected President Obama.

    Again REPUBLICANS . . . Where oh where is your BETTER health care plan?????? Where is your PERSONAL hospital built with your own personal money. . . to serve only YOU???? When I see that, I will personally write a letter to the IRS asking them to excuse you from paying taxes. Until then, please do try to “get real”.

  5. Lancer says:

    “Established by a state”, seems pretty simple. When Prof Gruber opened his mouth and described the lies, deceit and fraud that needed to be perpetrated to pass ACA…he also detailed that for all this to work, states had to be MANDATED to open exchanges. This was just before he admitted the “stupidity of the American (democrat) voter” is ultimately what passed this horribly written, never fully read and understood bill. “It’s not a tax”, we were told. Then when before the supreme court we hear, “it’s a tax”. Lie after lie.

    90% of ACA enrollees are subsidized by taxPAYERS. Premiums have went up, another lie. 0bama gave “opt out” advantages to his corporate supporters. 0bama, himself, has changed the law over 30 times…without ever going through the legislative body of the US…congress.

    Then….there’s the actual costs of ACA…which they missed by 400%. The website catastrophe that cost over $50 million. The millions who lost their insurance. The 8 million” enrollees that we’ve been told for decades should be well over 40 million.

    Here’s the supreme courts chance to deliver on THE LAW, not the loose, “we meant it like this” interpretation.

    • Obama 2015 says:

      The law states :

      as of the first day of such month the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act,

      No where does it say the Government can’t set up the state exchange because the GOP governor refuses.

      Obama said it wasn’t a tax, the GOP pushed the law to the Courts and they deemed it a tax and it was confirmed as law. Thank you.

      90% of ACA enrollees are subsidized by taxPAYERS. Premiums have went up

      That is 90% of people now paying a premium and adding to the economy . You cry about cutting taxes, what is the difference? Would you rather have someone pay to have insurance with a tax credit then go the ER for free and never pay? Premiums are never going to go down they are always going to increase. That is how the economy works. What has happened it has increases at the slowest rate in years.

      here’s the actual costs of ACA…which they missed by 400%
      This is a lie. They costs are actually down

      New York Times: “Budget Office Slashes Estimated Cost Of Health Coverage.” As The New York Times explained on January 26, the CBO “significantly lowered its estimate of the cost” of the Affordable Care Act. According to CBO director Douglas W. Elmendorf, the new estimates show a 20 percent cost reduction from 2010 projections when the health care law was signed:

      Any other lies?

      • Lancer says:

        This is really how easy it is….

        https://www.youtube.com/watch?v=tQMkOScXctY

        if you keep believing and telling LIES about conservatives, I’ll keep telling the truth about socialist democrats. Deal?

        • Obama 2015 says:

          The video proves nothing. Your taxes and my taxes haven’t gone up one cent because of Obamacare. Also even socialists say Obama isn’t a socialist .

      • Lancer says:

        0bama-bot…

        1. The law is interpreted by what it says, not by what it doesn’t say. Gruber said that states had to be mandated to have exchanges or the bill doesn’t work. The federalis just didn’t count on that and democrats should have actually read the bill they passed.

        2. If someone else, taxPAYERS, are funding 90% of the program’s costs, the subsidized aren’t paying for it. It’s an entitlement program, a vote buying scheme.

        3. “Costs are actually down”?? First, 0bamacare had a $2 trill price tag in 2010 and $2.6 in 2012. Only in dem lal-la land would someone talk about costs being down when it COSTS just to have this bill as law. Did you account for the $500 million the IRS asked for just to oversee 0bamacare? This dog squeeze of a bill has raised the cost of government across the board just in implementation, 0bama-bot…are you denying that or ignorant of it? Have 0bamacare costs been cut by the repub controlled house since it was implemented?

        4. “Any other lies?”

        well…there is this:

        http://swampland.time.com/2013/12/12/lie-of-the-year-obama-quote-on-keeping-your-healthcare/

        5. If 0bamacare is so “wonderful” why does anyone have an exemption???

        6. If 0bamacare was so “wonderful” why has 0bama, himself, changed the law 47 times?
        http://www.galen.org/newsletters/changes-to-obamacare-so-far/

        7. If 0bamacare is so “wonderful” why have 50% of the democrats who voted for it been voted OUT OF OFFICE?

        “Medicine is the keystone of the arch of socialism.”
        – Vladimir Lenin

        • Obama 2015 says:

          1st of all it is OBAMACARE. Keep the 0 for your terms in the white house in 2016 to 2020.

          1 Wrong again. enrolled in through an Exchange established by the State. Doesn’t say the government can’t run the exchange.

          2 If someone else, taxPAYERS, are funding 90% of the program’s costs, the subsidized aren’t paying for it. It’s an entitlement program, a vote buying scheme.

          If it is a vote buying scheme why are so many republicans on Obamacare in Kentucky and other RED States? Also does this mean schools, police and fire are also entitlement programs? Also people that have Obamacare pay state and sales tax so they are paying for it.

          3 Your numbers are wrong. Stop copying and pasting from Newsletters and blogs.

          4 Obama quote was right. Anyone who had a policy BEFORE the law was signed where able to keep their plan. What happened was the insurance companies changed policies each year sold bad policies that did not follow the guidelines of the ACA thinking the courts would kill it and once the law was found constitutional they were forced to stop selling ‘Junk” policies at the end of the year.

          That then forced some people to lose their policies. You should be pissed they sold lemon policies to poor americans when they knew they didn’t conform with the law. But you can go ahead and blame Obama.

          5 Exemptions are given to companies that already have policies that meet the law. If you have an insurance policy or medicare you have nothing to worry about. If you don’t, stop being a leach and get covered or pay a fine. Also you don’t have to buy a policy from the ACA you can walk into any Health insurance company and buy a policy. You just have to have a policy.

          6 If 0bamacare was so “wonderful” why has 0bama, himself, changed the law 47 times.
          Laws get amended all the time. So has the Constitution. Are you saying is something is wrong or not clear it shouldn’t be fixed? Are you saying women shouldn’t vote and Alcohol should still be illegal? Should the Red light cameras stay up since they are not really breaking the law?

          7 If 0bamacare is so “wonderful” why have 50% of the democrats who voted for it been voted OUT OF OFFICE?

          Pretty simple, Voters like you are fools to the lies of the Republican party. Also having Citizens United money behind you as a GOP candidate it’s hard to complete in a fair election as a democrat. As long as we have the BIG veto pen in the white house, I am not worried about the Congress and Senate in fact I think it is good you have both houses, maybe you can pass something worth the people’s time. Dems try and work with you. That is why Reagan was so successful.

          Just remember what you’re fighting and upset about.

          Allowing middle and lower class AMERICANS (Like Vets, single parents, children and anyone in the early 60’s that has retired from their job) a way to afford to see a doctor.

          YOu have no issue with spending a billion dollars on a weapons system that is obsolete when it goes to the middle east and it sits on a base for years unused but you can’t let a few bucks of your tax dollars to keep health care affordable.

          Almost $500 million dollars has been wasted to fight this law.

          There are only 319 million people in the United States.

          If guys like the KOCH brothers gave everyone a million dollars of that Fighting money they would still have 181 million to live on.

          Think about who is really pulling the strings..

  6. Lancer says:

    Sherry…

    The republican’s plan sat on Harry Reid’s desk with 400+ other initiatives that he never bothered to even bring to the floor to debate.

    • Obama 2015 says:

      You mean the plan to defund it and put it back the old way. Also the 400+ other initiatives had hidden riders that raised taxes, made abortion illegal, stopped gay marriage and other sneaky ways to push an agenda instead of passing a budget or a fixing a road.

  7. Sherry Epley says:

    Now that the Republicans have a majority in the Senate as well as the House, where is that fabulous health care plan? Bills can be written and voted on in either house. Why wasn’t the fabulous Republican plan introduced in the House of Representatives years ago?

  8. Anonymous says:

    Certain people would prefer to ignore the annoying truth, which is that our healthcare system was in critical condition due to ever-rising costs that are in part a result of too many insured individuals placing too much of a burden on a system designed to serve the providers of care, not the consumers of care. And a lot of these ignorant individuals are receiving Medicare which is placing the largest burden on our healthcare system than anything else. They get the benefit of a system that can negotiate rates for service and they continue to enjoy full benefits even after the amount they paid into the system (if they ever paid in anything at all) PLUS interest has expired. They are selfish hypocrites whose paranoia is fed by their own sense of entitlement.

    • Lancer says:

      Actually…your complete assertion is based on the falsehood: “that our health care system was in critical condition”.

      That is completely, utterly false and therefore, your argument has no basis.

      Government has been sticking its nose into healthcare for over 30 years…and it has made things worse. That’s the simple fact.

  9. confidential says:

    The GOP push to end Obamacare even while endangering people’s right to affordable Health Care. GOP governs only for the wealthy. Too bad that most GOP’s that vote these dudes in office believe too “they are wealthy and not affected by these feudal lobbying and negativity”. They will also take in the wrath sooner or later. Only the 1% benefits from opposing this President executive orders and proposals …and dudes you are not that wealthy! You dream and go around waving your featherless tails while bowing to the mighty barons and they won’t ever let you in to their exclusive circles…laughable.
    Here you have your also powerful buddy Netanyahu coming here on the back of the current elected POTUS demanding we go to war “for them” and pay for it too after they received over 20 billions of our hard earned taxes in the last 3 years or so alone. Meanwhile our dearest Conservatives the same ones that rolled their red carpet for him, demanding to denied health care for the very taxpayers that fund their pay checks and the foreign aid into the billions to that man’s country. What about we take away the luscious government health care funded by us to the whole GOP Congress and Senate? Just pathetic. Feudalism at its best…maybe even a new form of communism too? Hey this is supposed to be America.

    • Obama 2015 says:

      Well said.

    • Lancer says:

      …and yet it’s Harry Reid who has 5 lobbyist sons. Please, spare me the “democrats are for the poor and downtrodden” lie.

      Democrats want to buy votes with taxpayer dollars using entitlement programs. At least have the intellectual honesty to own up to it.

      How else can ANYONE defend the fact that after 50 years, trillions spent and over 100 entitlement programs later…the poverty rate hasn’t been lowered a SINGLE percentage point.

      • Obama 2015 says:

        Do you “entitlement programs.” do you mean tax breaks for the 1% on yachts and their overseas money?

        Also you’re wrong about the poverty rate hasn’t been lowered.

        In 1959 22.4% of America was in poverty. It went as high as 15% under GWB and has dropped to about 13% since Obama has taken office.

        Also the real entitlement programs help the economy, I believe for each dollar spent the economy makes 3 dollars back.

        Show me one thing the GOP has done in the past 6 years that has helped this country? Just one. Go ahead I’ll wait here.

Leave a Reply

Read FlaglerLive's Comment Policy | Subscribe to the Comment Feed rss flaglerlive comment feed rss

More stories on FlaglerLive
Loading

ADVERTISEMENTS

support flaglerlive palm coast flagler county news pierre tristam
news service of florida

Subscribe to FlaglerLive

Get immediate notification of new stories.

Advertisement
Log in
| FlaglerLive, P.O. Box 354263, Palm Coast, FL 32135-4263 | 386/586-0257

FlaglerLive.com