Magazine article Medical Economics

ACA Supreme Court Case: Officials Working on Tax Subsidy Workaround

Magazine article Medical Economics

ACA Supreme Court Case: Officials Working on Tax Subsidy Workaround

Article excerpt

** SHOULD THE U.S. Supreme Court deny tax credits to newlyinsured Americans in 34 states where the federal government runs the Affordable Care Act (ACA) health insurance marketplaces, some policy wonks in Washington, D.C. and across the country think there might be a reprieve.

Last month the nations highest court heard arguments in the case of King v. Burwell, which challenges the legality of offering tax credit subsidies to low and middle-income individuals through federally-facilitated exchanges. The subsidies are applied to health insurance premiums, lowering their overall cost.

Plaintiffs argue the language of the statute allows subsidies to only be offered through staterun exchanges. Currently, 13 states plus the District of Columbia run their own health insurance exchanges.

In addition to dealing a blow to a health law that conservatives still are trying to overturn, an adverse ruling could result in millions of enrollees suddenly being unable to afford insurance coverage, thereby destabilizing the health insurance market.

The U.S. Department of Health and Human Services (HHS) has said that it doesn't have a plan for an adverse ruling, but according to several reports, the agency has produced a 100-page document that includes "various contingency plans" detailing potential actions it could take if the court rules that the tax credits aren't available to enrollees in federally-run exchanges.

One "Plan B," could involve encouraging those states to declare that they are using the agency as a subcontractor, wrote Avik Roy, a senior fellow at the Manhattan Institute for Policy Research in an opinion post at Forbes, com. …

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