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It’s Up to States, Congress to Help Consumers If Court Strikes Down Subsidies, HHS Secretary Says

More than 6 million people could lose marketplace payments

It will be up to state officials and Congress to help consumers who can’t afford health insurance if the Supreme Court strikes down Patient Protection and Affordable Care Act (PPACA) subsidies for millions of Americans, Department of Health and Human Services (HHS) Secretary Sylvia Burwell said on June 10.

“The critical decisions will sit with the Congress and states and governors to determine if those subsidies are available,” Burwell told the House Ways and Means Committee. The secretary told Congress earlier this year that the administration has no authority to undo “massive damage” that would come if the court invalidates the subsidies in the online marketplaces, or exchanges, which the federal government operates in about three dozen states.

By the end of this month, the court is expected to issue a ruling in the case, King v. Burwell. More than 6 million people could lose those payments and many more residents could see their premiums increase because of the “havoc” the loss of subsidies would cause in the market, Burwell said.

The challengers argue that one clause in the Act states that those federal payments would be available to consumers only in states that run their own exchanges. But the administration has argued that the legislative intent was to make subsidies available to customers in every state, regardless of how its exchange was established.

During the June 10 hearing, Republicans pressed Burwell to indicate what type of legislation President Obama might sign to restore subsidies if the court rules for the challengers. Many Republican lawmakers have acknowledged that they would like to find a way to offer a temporary option to help consumers, but they have failed to decide on a specific proposal.

Burwell said that while the administration would be open to considering alternatives that make health care more affordable and accessible, the president would not sign legislation from Sen. Ron Johnson (R-Wis). That bill would maintain the subsidies for current beneficiaries through August 2017 but would repeal the PPACA’s requirements that most individuals get coverage, that larger businesses offer insurance to their workers or pay a penalty, and that plans provide specific types of benefits.

“Something that repeals the Affordable Care Act is not something the president will sign,” Burwell said.

A recent report from the American Academy of Actuaries said some changes favored by Johnson and other Republicans, such as eliminating the individual mandate, “could threaten the viability” of the health insurance market for individual plans.

Echoing comments she made last week, Burwell said the administration will work with states to help mitigate the consequences for consumers if the Supreme Court ruled against federal subsidies.

The session was billed as a hearing on the HHS budget fiscal 2016 request, but it quickly veered to Republican attacks on the sweeping 2010 health law while Democrats rushed to defend it.

“Whatever the Supreme Court decides this month, I think the lesson is clear: Obamacare is busted. It just doesn’t work. And no quick fix can change this fact,” said Ways and Means Chairman Paul Ryan (R-Wis). “Its very linchpin — its central principle — is government control. That means higher prices, fewer choices, and lower quality.”

Rep. Sander Levin of Michigan, the panel’s ranking Democrat, replied: “What’s busted is not the [PP]ACA but [Republican] attacks on it. Endless attacks. Never coming up with a single comprehensive alternative all these years. So you sit as armchair critics while millions of people have insurance who never had it before. You’re livid because it’s getting better.”

Source: Kaiser Health News; June 11, 2015.

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