In an attempt to make Obamacare more palatable numerous compromises were built into the law attempting to give states choices in running their own health insurance exchanges rather than participaitng in the national Health.gov. The chickens have come home to roost ! Inconsistencies in the writing of the law has opened up a Pandora's box of conflict.
This has now fallen to SCOTUS to decipher the intent of the wording of the ACA and it's subsidies.
Nearly 8 million Americans could lose subsidies that help them afford Obamacare plans if the Supreme Court strikes down the administration’s interpretation the 2010 law, according to data released Tuesday.
The Health and Human Services Department says roughly 7.7 million people in 37 states received tax credits to offset the cost of plans from HealthCare.gov, the federal insurance portal for states that did not set up their own health exchanges under the Affordable Care Act.
The taxpayer-funded subsidies had an average monthly value of $263 per person, meaning the government would pay out roughly $24 billion for the year when multiplied across the current number of enrollees.
“The figures released today tell a story of health coverage consumers rely on for financial and health security — and of coverage they don’t want to lose,” HHS Secretary Sylvia Mathews Burwell said. “Millions of marketplace consumers in HealthCare.gov states qualified for tax credits to make their coverage affordable and accessible.”
The justices last week heard oral arguments in the case known as King v. Burwell, with challengers saying the administration is breaking the law by paying the subsidies to customers in states that rely on the federal HealthCare.gov exchange. The law says subsidies can be paid to customers in exchanges “established by the state.”
In other words those in the Federal Exchange would not be eligible for subsidies.
If the court rules against the administration, customers in two-thirds of the states would be cut off from subsidies, which would create a crisis for both Congress and the White House.
To further illuminate the complexity. follow this logic.
Nearly 1.5 million people in Florida would lose monthly subsidies that average $294 per person, more than 1 million in Texas would lose subsidies averaging $239 and more than 515,000 in North Carolina would forfeit assistance worth $310.
The administration said it has no fix for the “massive damage” that would result in affected states.
Republican lawmakers are hoping to fill the void with a patchwork of proposals that freeze health coverage and financial assistance in place for Americans affected by the ruling, but only for a limited time as the GOP forges a replacement to Obamacare ahead of the 2016 presidential election.
HHS released the subsidy stats as part of an official enrollment report on signups through Feb. 22 — the cutoff date for people to finish up applications they started on HealthCare.gov by Feb. 15, the formal closing date for the 2015 enrollment season that began in mid-November.
All told, nearly 11.7 million people signed up for coverage on HealthCare.gov or exchanges set up by 13 states and the District of Columbia.
If unclear how many of them will effectuate their coverage by paying their premiums, and uninsured American subject to a penalty for lacking insurance can still sign up between March 15 and April 30.
The administration had predicted that 9.1 million Americans would maintain their coverage in 2015.Copyright © 2015 The Washington Times, LLC. Click here for reprint permission.
Even now there are questions about how subsidies are being handled by CMS
CMS Poorly Manages ACA Exchange Subsidy Payments, Report Finds
CMS has unsuccessfully managed the Affordable Care Act's subsidies to help U.S. residents purchase exchange coverage,according to an HHS Office of Inspector General report released Tuesday, Modern Healthcare reports.
Report Details
For the report, OIG looked at a sample of the $2.8 billion the federal government paid in ACA subsidies to health insurers during the first four months of last year. According to Modern Healthcare, OIG was unable to examine individual subsidies because payment data are only available in aggregated form.
Report Findings
According to the report, payments totaling billions of dollars made to health insurers could be incorrect because CMS does not have a proper process in place to calculate and disperse the subsidies. The report noted, "Without effective internal controls for ensuring that financial assistance payments are calculated and applied correctly, a significant amount of federal funds are at risk." Further, the report stated CMS "did not always follow its guidance for calculating" the subsidies.
The report cited CMS' lack of electronic systems to communicate with state-run exchanges as part of the issue. To solve the problem, OIG suggested CMS:
According to Modern Healthcare, CMS agreed with the report overall and said it is working to reconcile subsidy payments that already were made. An HHS spokesperson said, "Cost-sharing reductions and premium tax credits are a key part of providing more Americans with access to quality health care they can afford," adding that "CMS takes seriously our responsibility to make sure this financial assistance is paid accurately and that taxpayer dollars are protected" (Herman,Modern Healthcare, 6/16).
GOP Could Have Tough Time Addressing King Fallout
Meanwhile, Republicans in Congress could have a tough time addressing the potential fallout if the Supreme Court later this month strikes down federal exchange subsidies, the reports (Pear, New York Times, 6/17).
The subsidies are being challenged in the case King v. Burwell. At issue in the case is that while the Affordable Care Act says subsidies are available to help certain U.S. residents purchase coverage offered "through an exchange established by the State," a May 2012 IRS rule allows the subsidies to be used in an exchange administered either by a state or the federal government. The Supreme Court heard oral arguments in the case in March and will release a decision by the end of June. If the court rules against the federal government, it would eliminate about $28.8 billion in subsidies to 9.3 million individuals in 34 states in 2016, according to an Urban Institute analysis(California Healthline, 6/4).
Republican Lawmakers Working Toward a Plan
Some Republicans aides on Tuesday said House and Senate leaders are nearing a backup plan that would allow individuals to temporarily keep the subsidies. For example, Donald Stewart, a spokesperson for Senate Majority Leader Mitch McConnell (R-Ky.), said Republican leaders have been working toward "a responsible approach to protect families."
However, other observers have said GOP lawmakers have not come to an agreement on such a proposal.
According to the AP/San Francisco Chronicle, GOP House and Senate leaders on Wednesday will meet with members of their party to discuss potential contingency plans. Stewart said the meetings will be "the latest in a series of briefings with our members" (Fram, AP/San Francisco Chronicle, 6/16).
Some Worry About Potential Election Effects
According to the New York Times, some GOP lawmakers have expressed concern over the effects a ruling striking down the subsidies could have on the party in the 2016 election.
To address that issue, many Republican lawmakers have said they would support a backup plan that temporarily extends the subsidies until larger reforms can be put in place. Sen. John Barrasso (R-Wyo.), who is leading the Senate GOP's main effort to draft a backup plan, said, "Our goal is to protect people, not the law." He added that a contingency plan would not be "a long-term solution," noting, "We want to provide a temporary transition while this is relitigated in the 2016 elections -- and give the new president time to come in and bring a new solution forward" (New York Times, 6/17).
SCOTUS Ruling Invalidating Subsidies Would Mostly Hit Southern Residents
In related news, a Supreme Court ruling striking down the subsidies would have the greatest effect on U.S. residents living in the South, according to data released Tuesday by Families USA, theWashington Times reports.
According to the data, a ruling against the subsidies would have the largest effect on Florida, where about 20% of the 6.4 million U.S. residents who have subsidized federal exchange coverage live.
In addition, the report noted:
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