Healthcare reform dangles on the edge: Supreme Court hears King v. Burwell today

The Supreme Court is hearing King v. Burwell today, which could have a huge impact on the healthcare industry.

The case challenges federal subsidies to states with federal exchange programs as opposed to state-run programs. The Affordable Care Act gives subsidies to individuals who can't afford healthcare coverage through "an exchange established by the state"; King argues this excludes states where the federal government runs the exchange. There are 37 states falling into this category where people currently receive subsidies to purchase health insurance from the exchanges.

There are several consequences that could come from finding in favor of King, says the National Academy for State Health Policy Executive Director Trish Riley, including:

• 10 million people losing their subsidies, subsequently losing health insurance
• Health insurance exchange collapses in states with federally-run exchanges
• Higher insurance premiums as companies scramble for members
• Healthcare providers could lose billions

There are several states considering plans for exchange coverage in the future and the outcome of this case could make a difference. There are 10 states with new legislative proposals pending a transition from federally-facilitated to state- or partner-based models. Another 10 states have proposed bills that eliminate state-based exchanges or prohibit them.

"You wouldn't go out on a cloudy day without your umbrella and states cannot wait until June to find out they are without alternative coverage plans for their citizens," said Ms. Riley. "While we don't know what the Court's decision will be, it's clear states will continue to consider their options."

Two National Center for Policy Analysis Senior Fellows, Devon Herrick and John R. Graham, suggest if the federal subsidies are overturned, Congress should:

• Nix exchanges and allow individuals to purchase health insurance how they please;
• Eliminate individual and employer mandates;
• Give tax credits to individuals to purchase health insurance
• Re-scale subsidies to reduce work disincentives

The decision could turn the Affordable Care Act on its head and many sources question whether Republicans have a viable alternative. In the past, the Supreme Court upheld the law's nationwide subsidies in 2012 in a five-to-four vote, according to the New York Times.

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