The Affordable Care Act (ACA) recently celebrated its fifth birthday on March 23, but it has been anything but easy living for the law. Since its inception, the ACA’s constitutionality and legality have been tested in court numerous times, with the law victorious in some instances and defeated in others. And now, its most recent case may determine the bill’s fate or could at least start a political firestorm.
King v. Burwell is the latest ACA case that has made its way up to the Supreme Court. The plaintiff calls into question the legitimacy of the ACA’s federal subsidies program, which gives tax credits to individuals in states that do not have their own state health insurance exchange. As it is written now, individuals whose incomes are low enough and fall into a certain range can receive a subsidy to purchase health insurance “through an Exchange established by [a] State,” but that language does not clarify if the subsidy includes a federal exchange. The plaintiff contends that the law was written to pressure states to set up an exchange and, when it was clear that most states were not doing so, the IRS illegally issued a rule in 2012 providing the subsidies through a federal exchange.
What matters to private clubs are not the specifics of the case, but the political fallout if the Supreme Court rules that the ACA does not in fact include a federal subsidy program. Currently, 34 states have decided not to adopt a state exchange, therefore sending their residents—totaling 7 million nationwide— to participate in the federal exchange program to apply for subsidies.
If the Supreme Court agrees with the plaintiff, these 7 million Americans may lose their health insurance according to some estimates. In addition, the insurance market may suffer as well because without the subsidies, some of the low-income and healthier enrollees may drop their coverage resulting in insurance companies raising their prices for plans. Without the aid—on average subsidies reduce monthly premiums by nearly 75 percent—the individual insurance market would be affected as well.
For both Democrats and Republicans, removal of the federal subsidy would increase the pressure to amend the ACA, find new ways to replace the federal subsidies or remove the law altogether. In a “what have you done for me lately” political climate, those who will have had the benefit taken away could put pressure on their governors and state officials and representatives—particularly Democrats who backed the ACA—to come up with a quick fix to reinstate the subsidies (or a similar program) or be at risk of losing their next election. Meanwhile, Republicans may be able to use this momentum to rally support to repeal the act or change it to their liking.
Some Americans, beleaguered by ACA uncertainty during the last five years, could foreseeably want an overhaul to the controversial health care system. According to Gallup, just 37 percent of Americans approve of the ACA while 53 percent disapprove.
With Republicans in control of the House and Senate, it is unlikely that they would simply amend the language in the ACA to include the federal subsidy. However, some Republicans have proposed the idea of providing temporary aid to those losing federal subsidies. Also, increasing pressure on Democrats for any solution may put the ball further in the GOPs’ court, giving Republicans more power to vote to repeal the law, heavily modify the ACA or potentially propose a new health care law.
On the flip side, if Democrats can spin a plaintiff victory to be the impetus for the 34 states without exchanges to adopt them, then Republicans may be forced to continue with the current ACA model and embrace the state exchange.
King v. Burwell has once again put the heavily scrutinized health care bill under the microscope. The justices could rule in either party’s favor, but if the federal subsidy program gets removed, Americans on both sides of the aisle will want to change the status quo.
Phillip Mike is the communications manager at NCA.