This was the key finding made by the Supreme Court, in its landmark decision this morning upholding that the ACA requires that premium subsidies apply in all 50 states. The 6-3 decision, written by Chief Justice Roberts, ensures that the Affordable Care Act is here to stay for the duration of President Obama’s term in office. Even more importantly, it ties the hands of any future administration from re-interpreting the statute to deny the subsidies in states that have let the federal government run their exchanges.
The Supreme Court could have ruled more narrowly, upholding the subsidies as a reasonable exercise of the IRS’s administrative authority to implement a statute when the wording it unclear. Had it gone that way, a new President and his or her administration could have reinterpreted the statute so that the subsidies would no longer apply in states with federally-facilitated marketplaces. Instead, it issued a definite ruling that the law requires that the premium subsidies apply everywhere.
“This is not a case for the IRS,” wrote Justice Roberts on behalf of the court. “It is instead our task to determine the correct reading of [the statute].” And the statute, the justices found, “compels the Court to reject petitioners’ interpretation because it would destabilize the individual insurance and likely create the very ‘death spirals’ that Congress designed the Act to avoid.”
The court’s concern about the impact on patients, if it had overturned the subsidies, is evident from this paragraph in the ruling:
“So without the tax credits, the coverage requirement would apply to fewer individuals. And it would be a lot fewer. In 2014, approximately 87 percent of people who bought insurance on a Federal Exchange did so with tax credits, and virtually all of those people would become exempt . . . If petitioners are right, therefore, only one of the Act’s three major reforms would apply in States with a Federal Exchange. The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. One study predicts that premiums would increase by 47 percent and enrollment would decrease by 70 percent. E. Saltzman & C. Eibner, The Effect of Eliminating the Affordable CareAct’s Tax Credits in Federally Facilitated Marketplaces (2015). Another study predicts that premiums would increase by 35 percent and enrollment would decrease by 69 percent. L. Blumberg, M. Buettgens, & J. Holahan,The Implications of a Supreme Court Finding for thePlaintiff in King vs. Burwell: 8.2 Million More Uninsured and 35% Higher Premiums (2015). And those effects would not be limited to individuals who purchase insurance on the Exchanges. Because the Act requires insurers to treat the entire individual market as a single risk pool . . .premiums outside the Exchange would rise along with those inside the Exchange. It is implausible that Congress meant the Act to operate in this manner.”
Touche! This is precisely what ACP argued, in an amicus brief we submitted to the court along with 17 other health advocacy organizations. Our brief noted that tax credits (premium subsidies) established in the ACA as well as the insurance market reforms have enabled millions of Americans to purchase health insurance. If the Court decides in favor of the plaintiffs, millions will lose their health insurance subsidies. This will likely lead many to drop coverage or elect to go uninsured, driving up health insurance premiums for those that remain covered. If health insurance subsidies for federally-facilitated marketplace (FFM) plans were eliminated, enrollment in ACA-compliant individual market plans would drop by 9.6 million, according to the RAND Corporation. The Urban Institute/Robert Wood Johnson Foundation estimates the number of uninsured would increase by 8.3 million.”
So the Supreme Court ruling is a big win for patients and their physicians, and for ACP advocacy on their behalf. ACP President Dr. Wayne Riley, in a statement issued this morning, said that “we are thrilled and gratified by the Court’s ruling, which affirms that the citizens of all 50 states will have the opportunity to access either a state or federal exchange to obtain subsidies to purchase health insurance policies which benefits themselves, their families and loved ones.”
The Supreme Court decision doesn’t mean the end of the Obamacare wars, of course. Congressional Republicans will still try to get changes, although the court’s decision takes away their leverage to try to force President Obama to agree to repeal of major provisions of the law in order to keep the subsidies going. I now predict that there will be no major legislative changes in the ACA until President Obama leaves office.
The voters could elect a president in 2016 that is committed to changing or repealing Obamacare, but because the Supreme Court took away the next President’s option to reinterpret the statute to discontinue the subsidies, they would need Congress to amend or repeal the law, no easy task. And by then, millions more Americans will have coverage from the ACA.
“The Patient Protection & Affordable Care Act of 2010 is now more than ever, the law of the land and we urge the Congress to work with this and future administrations to improve it in the years ahead” said Dr. Riley in his statement on the court’s ruling.
Let’s hope that there comes a time when this reality sets in, and the debate shifts to improving the law, not destroying it.
Today’s question: what do you think of the Supreme Court ruling?