The Supreme Court's King v. Burwell decision could have an impact on healthcare spending.
King v. Burwell challenges healthcare reform's authorization of federal tax credits for low- and middle-income individuals who purchase insurance from the exchanges, according to a Constitutional Accountability Center report. King, the plaintiff, challenges "on the ground that the ACA authorizes tax credits only for individuals who purchase insurance on state-established exchanges."
According to a report from the Robert Wood Johnson Foundation, eliminating tax credits would mean more uncompensated care with less spending on hospitals, physicians and pharmaceuticals.
"This Supreme Court case potentially has far-reaching effects that will extend well beyond those losing coverage, and ripple through the entire industry," said Kathy Hempstead, who directs coverage issues at the Robert Wood Johnson Foundation. "A decision for King will have significant financial impacts, not only for patients, but also for the healthcare delivery system that relies on these patients for revenue."
Here are five key concepts on the case:
1. If the Supreme Court rules against the tax credits to lower insurance premium costs healthcare spending would fall 35 percent. Current healthcare spending is at $27.1 billion and could fall to $17.4 billion.
2. There are 8.2 million Americans who would lose healthcare coverage in 34 states if the Court rules in favor of King.
3. A drop in healthcare spending would significantly lower physician, hospital and prescription drug spending, according to an Urban Institute analysis funded by RWJF.
4. Assuming uncompensated care would be funded at historic rates, the break down on spending would be:
• Hospitals: $1.6 billion drop
• Physicians: $2.1 billion drop
• Prescription drugs: $1.6 billion drop
5. More uncompensated care would be unsustainable, and healthcare reform has lowered Medicare and Medicaid payments.