King v. Burwell: Upcoming Ruling

Over the next month, roughly 6.4 million people may be losing subsidies for health insurance. The United States Supreme Court has heard oral arguments for the King v. Burwell lawsuit and a ruling is expected sometime in late June or early July.

King v. Burwell is a federal lawsuit questioning the language used in the Patient Protection and Affordable Care Act (ACA). The ACA allows individuals to access health insurance on American Health Benefit Exchanges. Currently, the legislation allows low and middle income individuals who purchase health insurance both at a state or a federal level to access a federal tax credit. However King v. Burwell argues that the language used in the ACA allows tax credits for individuals who purchase insurance on the state-run exchanges, but makes no provision for subsidies in federally established exchanges.

Presently, 34 states use the federal exchange, amounting to about 6.4 million people. Three other states, Oregon, Nevada and New Mexico, have unsuccessfully attempted to build their own exchanges and now depend on the federal government as well. If the Supreme Court rules against subsidies in the federal marketplace, then those 6.4 million people will lose the subsidies that help them pay for health insurance.

If the court rules for the plaintiffs, individuals receiving subsidies in the federal marketplace would not be the only ones affected. As a result of both an increasingly expensive health insurance market and millions of people leaving said market, the insurance pool could get smaller and sicker. Some economists have estimated that prices in the directly affected states could rise by roughly one third.

For more information on the oral arguments please see this article in the SCOTUS blog and for a commentary on the fate of ACA subsidies in the Supreme Court please see this article in the SCOTUS blog.

More information on the possible consequences can be found in this article in the The New York Times.