The Affordable Care Act (ACA), better known as Obamacare, is currently facing its most recent challenge from political opponents. In the Supreme Court case King v. Burwell, funded by the conservative advocacy group The Competitive Enterprise Institute, challengers of the ACA are questioning the legality of the use of the federal healthcare exchange (via healthcare.gov) in states that opted out of creating their own, individual exchanges. Opponents to the legislation believe that it is unconstitutional for citizens of non-exchange states to receive government subsidies through the federal exchange, and by the beginning of summer, the Supreme Court should be ready to deliver their verdict on the matter.
If the challengers do indeed emerge victorious, what does this mean for the people who rely on the federal subsidies in non-exchange states?
Well, it would mean that millions of Americans would lose their federally-funded healthcare subsidies, making coverage unaffordable for many. According to the Wall Street Journal, only sixteen states and the District of Columbia have established their own exchange systems. The other 34 states are at risk for having their citizens lose their government aid.
For most, losing their funding will leave them unable to afford health insurance at all. This has, without a doubt, caused a great deal of concern in non-exchange states. Citizens will lose their access to medical care within a few months of a challenger’s victory.
According to the Wall Street Journal, over one million people in both Texas and Florida would lose their coverage in the event of a challenger’s victory. Nearly half of a million recipients would lose subsidies in Ohio, Pennsylvania, North Carolina, Georgia, and Missouri, to name a few.
As previously mentioned, without the federally-provided subsidies, many won’t be able to afford healthcare at all, which comes with its obvious drawbacks.
However, one thing that those who could potentially lose their financial aid do not need to worry about is being punished under the ACA’s individual mandate for not having coverage. The Wall Street Journal reveals that, while it is illegal not to have health care if you can afford it, most of the people who would be losing their subsidies amass an income that is so low that the individual mandate does not apply to them.
So, the diagnosis seems to be that if the challengers win this Supreme Court case, millions will lose their federally-granted subsidies, and with it their ability to purchase a healthcare plan—clearly a negative for those that it applies to. However, the aforementioned population can take some solace in that they most likely will not be facing any tax penalties for not having a coverage plan, seeing as their income level will exempt them from the ACA’s individual mandate.
Also, many speculate that a challenger-victory will result in the ultimate elimination of the ACA’s authority in non-exchange states, a feat which political conservatives have been striving for since the legislation’s incipiency.