If the Supreme Court rules in favor of the plaintiffs in King v. Burwell, a case questioning the constitutionality of federal subsidies found within the Affordable Care Act, healthcare providers face an uphill battle that may include some serious déjà vu.
According to a detailed analysis by the Urban Institute, if the Court rules in favor of the plaintiffs, 8.2 million Americans will become uninsured and premiums could increase by 35%.
Linda J. Blumberg and her colleagues at the institute looked closely at how the ruling could potentially affect the 34 states in which exchanges are run by the federal government. They found both direct and indirect effects of the potential ruling, and it does not paint a pretty picture for healthcare providers.
“If tax credits and cost-sharing reductions are eliminated, the cost of purchasing coverage will increase for those with incomes up to four times the federal poverty level,” Blumberg and her colleagues said.
This possible future certainly makes it difficult for healthcare providers to look ahead—how do you prepare for a year when you don’t know what the law will be?
According to Mike Lappin, the chief administrative officer for Aurora Health Care in Wisconsin, it’s hard to even get any work done when the future of so many Americans—289,000 in Wisconsin alone—is up in the air. “The uncertainty and the instability make it difficult for systems just to plan,” Lappin told Modern Healthcare.
Lappin also said that once patients lose their subsidies, it will result in more unpaid medical bills and an increase in financial aid requests—basically reversing two of the most positive aspects of the ACA. “That’s not a great situation for anyone,” Lappin said in the same interview.
Florida, North Carolina and Texas are among the states with the greatest number of people who were eligible for subsidies on the federal healthcare exchange, according to an article in the Wall Street Journal that analyzed Affordable Care Act figures released this week.
Overall, 7.7 million people who purchased their health insurance on the federal exchange qualified for an average subsidy of $263 per month. In Florida, 1.6 million people who purchased insurance on the federal exchange qualified for financial assistance. Another one million were eligible in Texas; 550,000 received subsidies in North Carolina; and more than 430,000 received subsidies in Pennsylvania.
An infographic from The Commonwealth Fund suggests that Georgia, Tennessee, Virginia and Ohio also face significant losses.
Approximately 28% of the 8.8 million people who purchased insurance at the HealthCare.gov site were in the key demographic of 18 to 34 years old. This number was relatively unchanged since 2014, the WSJ reported.
Not surprisingly, hospital association leaders paid close attention to the proceedings.
Sean Connaughton, president and CEO of Virginia Hospital & Healthcare Association, was blunt when describing the mood among he and his colleagues.
“Everyone I've talked to, on no matter what side of the political spectrum, is worried,” Connaughton told Hospital and Health Networks. “Even people who opposed the ACA have got to see the practical impacts if the administration loses.” In Connaughton’s home state of Virginia, an estimated 300,000 Americans could lose coverage.
Facing the consequences
Andy Carter, president and CEO of the Hospital & Healthsystem Association of Pennsylvania, told Hospital and Health Networks exactly why hospital association leaders are so fearful. “We’d be left with the most chronically ill, desperate folks who will hold on to their insurance with a death grip,” Carter said. Premiums will increase, insurers will leave the market and the state risks Medicaid expansion, he added.
Technically, if the Court rules in favor of the plaintiffs, healthcare providers do have one last hope: the states using the federal exchange could change existing policies and set up their own exchanges. According to the Urban Institute’s findings, this is highly unlikely.
“The deadline for states to apply for federal grants to assist the development of [state-based marketplaces] expired in November 2014, leaving the financing of such a change squarely on the states’ shoulders,” Blumberg and her colleagues said. “In addition, at least in the near term, the political environments in most of these states are not conducive to participating.”
A decision in King vs. Burwell is expected by June.