Blog & News
King v. Burwell: Impact Varies by StateMarch 03, 2016:
June 18, 2015: The Supreme Court is expected to issue its decision in King v. Burwell before the end of the month. Should the Court reject the Obama Administration’s interpretation of the Affordable Care Act (ACA), there will be major coverage impacts in 34 states.
The case is hinged on the Advanced Premium Tax Credits (APTCs) provision of the ACA. These credits are applied to an enrollee’s premium each month with the intent of reducing the premium and making the cost of health insurance more affordable. Language within this provision states that tax credits will be available to consumers who purchased their insurance from “an exchange established by the state.” For this reason, King has argued that these subsidies only apply to states that formed their own state-based marketplaces (SBM).
If the Court rules against the federal government (in favor of King), the Treasury would be prohibited from providing subsidies to individuals in the 34 states that rely on the Federally-Facilitated Marketplace. This would affect 6.4 million APTC enrollees who are receiving an average tax credit of $278 per month.
There is large variation in terms of the state impact. More than 50% of APTC enrollees reside in just 5 states: Florida, Texas, North Carolina, Georgia, and Pennsylvania. APTC enrollees in 10 statees would lose an average premium subsidy of over $300 per month. But the impact on premiums varies by state. For example, in Alaska the average premium subsidy is $536 per month, and in Arizona the average subsidy is $158 per month.
For a more robust discussion of the implications of King v. Burwell, we recommend this blog post by Lynn Blewett , SHADAC Director, and Jean Abraham, Associate Professor, University of Minnesota, Division of Health Policy and Management, School of Public Health.