In early March, the Supreme Court will hear oral argument in King v. Burwell regarding the legality of federal exchange subsidies. Should the ruling favor the plaintiff, nearly 6.3 million Americans could lose access to affordable health coverage overnight, particularly in the South and Midwest.** Without leadership from our elected officials, such a ruling could have deep and lasting consequences for Americans trying to do the right thing.
Five years ago the federal government passed the Affordable Care Act (ACA). Since then, billions have been spent to implement this massive mandate. Millions of Americans followed the letter of the law – even if they didn’t agree with it – enduring the ACA’s well-documented growing pains to purchase coverage as required. Today, many have a greater degree of comfort that, if illness strikes, they can get the help they need.
Every day, our customers ask the more than 3,000 agents we support: “What happens if I lose my subsidy?” “How’s this going to work?” As millions of Americans around the country wonder if they will be able to afford health insurance without federal subsidies, an even bigger storm is looming: the economics of the insurance industry guarantee that pulling one thread – subsidized coverage – will cause the rest of the existing landscape to quickly unravel driving up prices for everyone buying coverage in the individual market.
Without strong leadership from our government to ease the potential disruption, two-thirds of the 9.3 million Americans who bought on the federal exchange with subsidies will be priced out of the market, and another 1.2 million purchasing outside the federal exchange will be at risk in future years.** Because even those with a long history of illness can now be covered, those who remain insured would represent a risk that many of the markets’ smaller carriers will be unable to absorb. As a result, individuals and carriers will exit the market, further driving up costs.
Industry and political insiders understand the severe ramifications of doing nothing. No one knows for certain what the Supreme Court will do, and as a result, lawmakers and regulators need to reassure the country that they will quickly coalesce around a strategy for the nation and a plan to engage. A soft landing is needed, and our leaders, with the support of the business community, should have a plan and be on the front lines articulating specifically and by what method a ruling overturning federal exchange subsidies would be addressed. They must make clear that the system may look different in the wake of King v. Burwell, but that coverage will still be affordable.
Regardless of where you stand on the Affordable Care Act, it is the law of the land and Americans took the U.S. Government at its word, purchasing health insurance for themselves and their families as required. Five years ago, the ACA was new and poorly understood. Today, while still extremely complex, it is reality for the country. Congress and the Administration must develop a workable solution to King v. Burwell, should it be needed. In the meantime, Americans will wait to see if our leaders deliver what we expect from our government – a solution.
**Source: “Characteristics of Those Affected by a Supreme Court Finding for the Plaintiff in King v. Burwell.” The Robert Wood Johnson Foundation and Urban Institute, 2015
Kenneth J. Fasola is President and Chief Executive Officer of HealthMarkets, Inc.