U.S. Supreme Court upholds Obama health care subsidies
About 70,000 Kansans will be able to keep their health insurance thanks to a Supreme Court ruling that reaffirmed a key part of the Affordable Care Act.
The 6-3 decision came Thursday morning in the King v. Burwell case about the federal subsidies that make insurance affordable for low- and middle-income residents.
This is the second life-or-death challenge that President Obama’s signature health care law has survived.
At the White House, Obama declared that “after more than 50 votes in Congress to repeal or weaken this law … (and) after multiple challenges to this law before the Supreme Court, the Affordable Care Act is here to stay.”
Republicans in Congress, including Sen. Pat Roberts, R-Kansas, vowed to continue the fight to repeal the law.
“The Supreme Court’s decision today does not take away from the fact the Obamacare is fundamentally broken and that the administration has recklessly implemented this law, damaging our health care system as a whole and jeopardizing Kansans’ health care,” he said in a written statement. “Every day Obamacare continues to hurt millions. … Doctors are becoming increasingly unavailable to their patients, and employers continue to cut jobs and hours.”
He noted that insurance companies in Kansas have proposed rate hikes of up to 38 percent next year for people who buy individual or small group health insurance policies on their own.
How it could have gone
Residents who buy insurance through healthcare.gov receive the subsidies in the form of tax credits. An estimated 69,979 Kansans receive an average of $210 a month, according to the U.S. Department of Health and Human Services. That totals more than $14 million for Kansans each month.
Nationally, an estimated 6.4 million people receive those subsidies in the 34 states – including Kansas – that chose not to run their own health insurance exchanges, leaving it to the federal government.
Had the court thrown out the subsidies, the impact would have stretched beyond the 6.4 million people.
Without the subsidies, many of those people could no longer have afforded health insurance. And healthy people would have been the most likely to drop their plans because of the price hike. That would leave only the sicker people in the risk pool, and it would have increased the number of uninsured people visiting hospitals.
“You would have had so many more people without subsidies, continuing to go into emergency rooms and not paying for their care because they had no insurance,” said Janet Hamous, executive director for the Wichita Business Coalition on Health Care.
That would have translated to higher health insurance premiums for everyone, she said.
The number of uninsured nationally would have jumped 44 percent, and the average nongroup premium in Kansas would have increased 35 percent, according to a report by the Urban Institute, an independent research organization.
The same report said more than 60 percent of those who would have lost insurance would be white, and 80 percent would have been low-and middle-income, but not poor.
Larry Levitt, senior vice president for the Kaiser Family Foundation, a nonprofit focusing on health care policy, said the decision brought a sigh of relief.
“Consumers mostly weren’t paying any attention to the court case but it certainly has huge consequences for the 6 million people receiving subsidies, had it gone the other way,” Levitt said.
“It would have really up-ended insurance markets and caused chaos,” he added.
Legal challenges ahead
The court’s long-awaited decision in the case does not end all legal challenges to the Patient Protection and Affordable Care Act, but it’s probably the last one that had the potential to gut the law. A ruling in the other direction would have undercut the subsidized insurance program’s financial underpinnings.
The high court previously upheld the law against an explicit constitutional challenge, in a 2012 decision written by Chief Justice John Roberts Jr. that concluded Congress had the authority to impose the so-called individual mandate. The mandate requires individuals either to buy insurance or pay a penalty.
The new challenge was focused on the text of the law rather than on the Constitution.
At issue was the legality of the subsidies for an estimated 6.4 million subscribers in the 34 states –including Kansas –that chose not to run their own health insurance exchanges. Critics contended the law as written only permitted the subsidies to go to people who use state-run exchanges. The administration says the subsidies were intended to be available in all states.
The health care law encourages states, but does not require them, to establish exchanges to offer one-stop shopping for insurance coverage. As inducement, the law offers tax credits to people qualified by income who buy insurance through an exchange “established by the State.”
The challenge turned on this four-word phrase.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter,” Chief Justice Roberts wrote in the decision.
Elected Kansans’ response
Katrina McGivern, policy and public affairs director for the Kansas Association of Medically Underserved, said she expects more health care battles to come.
“I think we’re trying to revel in this decision right now and enjoy the huge victory that we just won before we see what might come down on the horizon,” she said, adding “we’re definitely hoping this is the last battle we have to fight, but realistically, it probably isn’t.”
The majority of Kansas lawmakers sent a letter earlier this week to congressional leaders referring to the Affordable Care Act as “an ill-conceived, poorly-written law.”
Dan Hawkins, R-Wichita, chairman of the House Health and Human Services Committee, co-authored the letter to Congress with Mary Pilcher-Cook, R-Shawnee. The letter garnered signatures from 125 Kansas House Representatives and 26 Kansas Senate members stating they would not create a Kansas exchange if the Supreme Court struck down the federal insurance subsidies.
“Disappointed would be my first reaction,” Hawkins said of the Supreme Court decision. “My second reaction is the systemic problems with the Affordable Care Act aren’t going to go away.”
Contributing: McClatchy Washington Bureau
Reach Gabriella Dunn at 316-268-6400 or gdunn@wichitaeagle.com. Follow her on Twitter: @gabriella_dunn.
Kansas delegation’s reaction
Members of the Kansas congressional delegation vowed to work to repeal the health care law.
“Since Obamacare became law, America has been dealing with the ramifications of the nationalization of our health care system. The disastrous outcome of this law is due to the flawed premise that the federal government knows what is best for Kansans. Today’s ruling leaves us with a broken health care law that has increased costs, decreased access, and posed enormous economic burdens on millions of Americans. The bottom line is this: Obamacare does not work for hard-working Kansans.”
– U.S. Rep. Mike Pompeo of Wichita
“After 58 votes to repeal Obamacare in part or in whole, I call on our Republican leadership to use Reconciliation to put a full repeal of Obamacare on the President’s desk.”
– U.S. Rep. Tim Huelskamp, R-Fowler
“We don’t need to fix Obamacare, we need to fix health care.”
– Sen. Pat Roberts
Additional legal challenges
Among the pending lawsuits:
▪ House of Representatives v. Burwell: House Republicans are spearheading a challenge to some $175 billion the administration is paying health insurance companies over a decade to reimburse them for offering lowered rates for poor people. The House argues that Congress never specifically appropriated that money.
▪ Sissel v. Health and Human Services Department: A unanimous three-judge panel of the federal appeals court in Washington rejected a conservative group’s claim that Congress imposed new taxes unconstitutionally when it created the Affordable Care Act.
▪ West Virginia v. Health and Human Services Department: West Virginia says the White House has undertaken a series of illegal changes and delays to the law.
▪ Contraceptive mandate cases: Dozens of religiously affiliated colleges, hospitals and other not-for-profit groups do not like the compromises the administration has put forward to allow women covered under these institutions’ health plans to obtain contraceptives at no extra cost, while still ensuring that groups that hold religious objections to contraceptives do not have to pay for them. The government says the groups have to fill out a form or send a letter stating their objection, but non-profits say that still makes them complicit in providing contraceptives.
Source: Associated Press
This story was originally published June 25, 2015 at 9:22 AM with the headline "U.S. Supreme Court upholds Obama health care subsidies."