Supreme Court Saves Affordable Care Act Subsidies

 

Texans enrolled in the Affordable Care Act health insurance marketplace can continue to receive federal subsidies thanks to a decision Thursday by the U.S. Supreme Court.

The court ruled against a claim challenged whether residents of certain states can receive the help. Texas and 33 other states that did not set up state-operated marketplaces could have been affected by the decision.

“I think this is a huge victory for Texas consumers, and it will ensure that health coverage remains affordable for hundreds of thousands of Texans,” said Stacey Pogue, senior policy analyst with the Center for Public Policy Priorities.

About 832,000 Texans were at risk of losing premium tax credits, according to the Kaiser Family Foundation (KFF), a national health care research organization. Claudette Newsome is one of those Texans.

Newsome, 42, is self-employed and receives a tax subsidy that helps pay for health insurance for herself and her two children. With the King v. Burwell decision, she will get to keep the $585 federal subsidy she receives each month for her family, which brings her monthly payment to about $183.

Newsome recently found a lump in her neck and is going through preliminary testing to determine what it is. She said that if the court had ruled against Texans like her, she would have had to change doctors, restart testing, and find alternative financial assistance for her care.

“I’m just happy that the answer came through like it did today in favor of so I can keep my health insurance and I can go to the doctor and take care of this,” said Newsome, a Houston community leader with the Texas Organizing Project.

Eighty six percent of Texans enrolled in the federal marketplace receive financial assistance in the form of premium tax credits or cost-sharing subsidies.

Eighty-six percent of Texans enrolled in the federal marketplace receive financial assistance in the form of premium tax credits or cost-sharing subsidies. They would have seen a 305 percent increase in the average premium without tax credits, according to Kaiser.

If the court had ruled that customers in states without their own marketplaces were not eligible for the subsidies, analysts say it could have dealt a serious blow to the Affordable Care Act, better known as Obamacare.

The exodus of Americans from the marketplace would have caused premiums to skyrocket since insurance companies would still need to cover pre-existing conditions, according to Pogue. This would lead to higher insurance costs for anyone who buys insurance coverage directly from insurers, and ultimately, to more people giving up insurance.

Top government leaders in Texas have spoken against Obamacare and the recent ruling.

Gov. Greg Abbott penned an editorial earlier this week calling for Congress and governors to sound Obamacare’s “death knell.” Following the ruling, he called for the election of a president who would repeal the law.

Attorney General Ken Paxton called Obamacare “one of the broadest overreaches of federal authority in our nation’s history,” and said Washington leaders should work against it.

Some Democratic state lawmakers supported the court’s decision.

“It’s time for opponents to face facts,” said Donna Howard (D-Austin). “The Affordable Care Act (ACA) is the law of the land, and it’s working. Since its enactment, the rate of uninsured has dropped significantly, the growth in health care costs has slowed, and provider choice through the online health insurance marketplace is increasing.”