Have you heard of the King v. Burwell case currently before the Supreme Court? If you’re like 70% of Americans, the case has passed you by unnoticed. But, as nurse practitioners we need to be aware of this impending ruling challenging key components of healthcare law as it carries significant implications for ourselves and our patients. Here’s a quick breakdown of the background behind the case and how it could affect healthcare in your state.
A Bit of Background
The Affordable Care Act (ACA) requires most Americans to have health insurance. As part of the effort to make health insurance available and affordable, health insurance marketplaces or ‘exchanges’ were to be set up to accommodate the comparison and purchase of health plans. States were given a choice in how to roll out these exchanges to their constituents. They could either set up their own, state run exchange or, they could let the federal government take care of this for them. The federal exchange is commonly known as healthcare.gov. 34 states opted to allow the federal government to run all or part of their exchange.
The Affordable Care Act also made subsidies available to low and middle income Americans to offset the cost of purchasing health insurance. Individuals with incomes ranging from one to four times below the poverty level are eligible to receive such subsidies. Roughly 8 million people, or 87% of those who signed up for a health plan on healthcare.gov in 2015 qualified for these subsidies.
What exactly is King v. Burwell?
The King v. Burwell case challenges the legality of six words, “an exchange created by the state”, in the 900 page Affordable Care Act. The plaintiffs (King) in the case argue that these words mean that only individuals obtaining insurance through state run exchanges, not federally operated exchanges, are eligible to receive subsidies. The implications of a Supreme Court ruling in favor of King are huge.
If the Supreme Court rules in favor of King, many of the millions of Americans relying on subsidies living in states with federally run exchanges will no longer be able to afford their health plans. Those most likely to drop their plans are the young and healthy. The older and sicker in greater need of healthcare are more likely to keep their plans universally driving up the cost of health insurance premiums.
A Supreme Court ruling resulting in the loss of subsidies begs significant logistical questions. First, do people get to keep their subsidies? Technically, individuals who have received subsidies deemed to be illegal could be forced to pay them back, but this is extremely unlikely. Second, if people lose their subsidies, how and when will this happen? To prevent a ‘death spiral’ in which millions of Americans suddenly drop their health plans driving up the cost of insurance, most likely individuals will get to keep their subsidies through 2015. This gives states time to decide if they want to set up their own exchanges.
Finally, the Supreme Court’s ruling carries implication for employers. Many employers are liable for penalties if their employees receive subsidies. It follows that in states where subsidies are no longer available, employers should not have to pay penalties. This takes the backbone out of the employer mandate, a key component of the Affordable Care Act.
How will King v. Burwell affect your patients?
If the Supreme Court rules in favor of King and you practice in a state with a federal exchange, your patients could be forced to drop their health plans. The ripple effect of this decision extends beyond just patients who purchased health insurance on healthcare.gov. When healthy patients drop their plans, the health insurance pool as a whole is effected making insurance less affordable for others with individual plans. With affordable health insurance harder to come by, we can expect to see an increase in emergency department usage and fewer patients seeking treatment for chronic diseases in the primary care setting.
What are your thoughts on the impending King v. Burwell ruling and its effects on healthcare delivery?
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