As the U.S. Supreme Court prepares to announce its decision in a lawsuit that threatens federal health insurance subsidies for more than 6 million Americans, health-care economist Timothy D. McBride, PhD, is confident the high court will side with the Obama administration.
“This will be the second major victory the Obama administration’s Affordable Care Act will have received in the Supreme Court,” predicts McBride, professor in the Brown School at Washington University in St. Louis.
“This would mean that the law can continue to provide health insurance through Medicaid and through marketplaces, preserving a program that since its implementation in 2010 has helped some 16 million Americans gain access to health insurance and lowered the nation’s uninsurance rate by more than 30 percent,” he said.
The case, King v. Burwell, challenges the legality of federal tax credits offered to low- and middle-income Americans who buy health insurance coverage through the federal online health insurance marketplace. The Supreme Court is expected to announce its decision in the case before the end of June.
“If the Supreme Court rules against Obamacare,” McBride said, “one of my big concerns is that we will continue to create major gaps in health-care insurance between the states. In many adjacent states, such as Missouri and Illinois, we could see big differences in access to affordable health insurance coverage.”
The court’s decision won’t change much for residents of the 24 states that set up their own state-based marketplaces for Obamacare health insurance purchases. But in other states where residents access Obamacare through the federal marketplace, a decision finding federal credits to be illegal would leave low-income residents with few options to obtain affordable care, McBride said.
Current estimates suggest that about 6 million people are receiving subsidies in the federal marketplaces (out of the roughly 11-12 million covered by marketplaces across the U.S.). More than 85 percent of people receiving coverage through the marketplaces are receiving subsidies, McBride said.
In Missouri, more than 250,000 people have used the federal marketplace to sign up for Obamacare, and about 88 percent of these people are receiving federal subsidies, McBride said.
“This case may represent the last chance the Obamacare opponents have to reverse Obamacare in the courts,” McBride said. “If the court rules on behalf of the plaintiffs and against the administration, and there is no ‘fix’ to the law or plan B, this would represent a major blow to Obamacare, in my opinion — not fatal, but very significant.”
While an adverse ruling would not require people to give up coverage, it would mean the end of subsidies for about 6 million low-income residents in 27 federal marketplace states. If required to pay the full premium price, insurance coverage would likely become unaffordable for people with incomes between 100 percent and 399 percent of the poverty level, McBride said.
While these scenarios may seem bleak, McBride is hopeful that the Supreme Court will uphold the legality of the federal tax credits and issue a decision that avoids the need for a politically charged battle over possible congressional fixes or presidential workarounds.
He lays out support for his prediction that the court will rule against the plaintiffs and for the Obama administration, noting that four liberal justices are likely to support Obamacare and they need to pick up only one more vote to turn the tide.
And, as far as the legal arguments put forth in the case, McBride said that he and “nearly every legal scholar and health policy analyst” thinks the case is “weak on the merits.”