This week, the U.S. Supreme Court will consider a case that could eliminate health insurance subsidies and potentially unravel the Affordable Care Act. Plaintiffs in King versus Burwell argue that the health care law only allows the federal government to provide subsidies to those who purchase insurance from state-run exchanges. The decision could affect tens of thousands of customers in Maine.
Health insurance was always expensive for Dave Clannon's family. He's a self-employed property manager in Litchfield, so he and his daughter got coverage through his wife's employer-based plan at a cost of $1,100 a month. But when she was laid off in January, the family went to the Affordable Care Act's online Marketplace and got coverage for $52 a month, after subsidies.
Clannon says now they have one less thing to worry about. "I would hate to see the subsidy go away," he says, "because I don't know if we would be able to afford the premium on our own. That would be out of reach once again."
The Urban Institute and the Robert Wood Johnson Foundation estimate that 60,000 Mainers will lose their subsidies, and 50,000 will become uninsured, if plaintiffs in the King versus Burwell case are successful. The lawsuit points to a sentence in the federal health law that says subsidies will go to consumers who buy insurance "through an exchange established by the state." This, plaintiffs argue, makes subsidies in federally-run marketplaces null and void.
"The consequences of this case are potentially devastating. I can't think of another situation where the Supreme Court has heard a case where people's benefits would be taken away in such a stark manner," says Andrea Irwin, of the group Consumers for Affordable Health Care.
Irwin says plucking one sentence out of a 2,000-page law fails to look at the whole picture. "Really, the whole intent of the law was to increase access of affordable coverage to people."
Irwin says the ACA does that in three key ways: by eliminating pre-existing condition exclusions, widening the insurance pool through the individual mandate, and providing subsidies to make coverage affordable. "If you look at whole law, if you take away any three legs of that stool, the whole law fails," she says.
Health policy consultant Mitchell Stein says if the subsidies are eliminated in states with federally-facilitated marketplaces, lots of people will drop coverage. Most will likely be healthy people. That leaves sicker people in the insurance pool, which costs more and will increase premiums.
And Stein says that will drive even more people out. "And the more - it's only the very sickest in the health system, and they need to be charged ever-escalating premiums, leading to what's called the premium death spiral."
Stein says eliminating subsidies would also, in effect, eliminate the employer mandate to provide affordable insurance, because employers are only penalized when workers can get subsidies on the Marketplace.
The end result, Stein says, is if the Supreme Court finds in favor of the plaintiffs, the country will be split in two: between the haves, and the have-nots, of health coverage. "It's undeniable there will be a huge human cost immediately if some sick people have to stop their treatment," he says. "Many people will lose their coverage."
People like Wayne Edgerly of Eastport. After he lost Medicaid coverage, Edgerly bought a Marketplace insurance plan for just a $1.64 a month. Co-pays and deductibles cost more, but Edgerly says he's able to afford to see his doctor about lingering pain after getting hip surgery last summer. Without it, he says, he'd forego the doctor's appointment. "Now I don't worry about it," he says. "It's going to be a little bit of money, but it's going to be paid off."
Mitchell Stein says if the Supreme Court finds in favor of the plaintiffs, it will be a major blow to the ACA, but it can be revived. "This may very well lead to states creating their own exchanges," he says.
Whether Maine is considering that option is unclear at this point. Gov. Paul LePage's spokesperson, Adrienne Bennett, says the governor and the state insurance superintendent are reviewing possible options and will decide how to proceed after the Supreme Court issues a ruling, which is expected in June.
