When the Affordable Care Act (ACA) was signed into law in 2010, it ignited a seismic shift in the United States’ healthcare system, and some might argue the greatest transformation of the industry in generations. The landscape for healthcare has been forever changed, and we cannot go back. Nearly 17 million more Americans have health insurance today than before the law was enacted.[i] Nearly 12 million people now get their healthcare through federal and state-run exchanges, and nearly nine million Americans now can afford healthcare through the help of federal subsidies.[ii] Another critical change has been the creation of health insurance Consumer Operated and Oriented Plans (CO-OPs).
CO-OPs were designed to increase competition in the marketplace. Currently, there are 22 CO-OPs operating in the United States, and according to a recent survey, states with operating CO-OPs had health insurance premiums 8 to 9 percent lower on average than states without.[iii] Health Republic Insurance of New York – the CO-OP that I lead – is one of the largest in the country. Last year, we received the highest market share amongst plans operating on the New York State of Health Exchange for individuals and small groups. Today, we have over 200,000 members, on and off the Exchange. Approximately 67% of Health Republic’s on exchange individual members receive a subsidy, and because of that subsidy, many thousands of New Yorkers have been able to access quality healthcare – some for the first time ever. According to the National Alliance of State Health CO-OPs (NASHCO), there are one million effectuated CO-OP members across the country.[iv]
However, there is a very real fear that affordable healthcare may soon be but a short-lived memory for more than six million Americans who receive subsidies and live in states with federal-run exchanges.[v] Within the next 30 days, the Supreme Court will rule on King v. Burwell – a case brought on a rather flimsy notion that Congress did not intend to provide subsidies to Americans in 34 states that chose to utilize the federal exchange rather than set up their own.
New York and 13 others, including Washington D.C., opted to create their own exchanges, and thus will not be directly impacted. However, depending on the Supreme Court’s outcome, this could mean that a majority of Americans will lose the premium assistance tax credits to help pay for their health insurance, and therefore may be forced to drop it. The implications will be staggering and the costs for individuals to access healthcare will increase exponentially.
If the Court sides with King – and subsidies disappear – there will be unintended consequences that lead to the growth of healthcare costs. For instance, the loss of subsidies will drive an increase in both premiums and deductibles, and subsequently many young, healthy people will decide to pay the Individual Mandate penalty rather than obtain health coverage, making the overall insurance pool sicker and thus driving healthcare costs even higher for everyone else.
As a healthcare industry veteran, I have navigated many of the healthcare fluctuations over the last two decades. Witnessing all the progress that has been made in recent years – from more Americans having health coverage than ever before, to people accessing preventative care that has contributed to 50,000 fewer deaths[vi] – has been remarkable. However, if the Supreme Court should rule in favor of King, it is likely that a widening chasm will be created in America, where the people with the greatest healthcare needs will have the least amount of access due to it being prohibitively expensive.
The Affordable Care Act and the programs it has created – including CO-OPs – are changing the face of healthcare in this country for the better. Now is not the time to turn back the clock or erase the progress that has been made.
Clarification: This column has been updated to reflect that the Supreme Court is expected to rule on King v. Burwell at the end of this month or in early July.
Debra Friedman is the president and CEO of Health Republic Insurance of New York, and currently sits on the Boards of the New York Health Plan Association and the National Alliance of State Health CO-OPs (NASHCO).