Court Decides Against Subsidies for Health Care Exchange

This morning the D.C. Circuit court ruled, 2-1 against the government in the case Halbig v Burwell.  The ruling effectively strikes down federal subsidies available to consumers who buy insurance in the 36 states where the exchanges are operated in whole or in part by the federal government, rather than the states.  New Hampshire has a hybrid system that does include the federal insurance exchange program and could be impacted by this ruling.

Although appeal is likely, if upheld the decision against the AoA (or Obamacare) will block $36.1 billion in subsidies to an estimated 7.3 million Americans.  That’s well over half (about 62 percent) of those expected to enroll in the federal-run exchanges by 2016.

“We conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges ‘established by the State,’ we reverse the district court and vacate the IRS’s regulation,” ~ Circuit Judge Thomas B. Griffith authored the majority opinion.

According to a U.S. Department of Health & Human Services report, New Hampshire residents who chose subsidy-eligible plans on the federal-run marketplace got premium reductions averaging 74 percent. After tax credits, those enrolled in silver plans paid monthly premiums averaging just $87, the HHS report said.

It is not clear how this will play out with New Hampshire’s recently expanded Exchange Program, however current beneficiaries will not lose the credits any time soon because the final outcome is likely to be decided by the U.S. Supreme Court. Similar legal questions are coming up before other U.S. courts in the coming months.
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“Today’s decision represents the high-water mark for Affordable Care Act opponents, but the water will recede very quickly,” said Ron Pollack, executive director of Families USA, which supports the federal health law. Pollack said. “The likelihood that today’s decision will not be implemented does not obscure the harm it could cause. It would eliminate help for almost 5 million low- and moderate-income people who currently receive subsidies so they can afford health insurance.”

 

More:

RWJ Report: http://bit.ly/1kA9JVW
cnbc.com article
Forbes article
Wall Street Journal Article