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Study: Premiums Would Rise $3,300 If Court Rules Against Affordable Care Act

PPACA ‘fundamentally shifted insurance market,’ expert says

Millions of people who buy insurance through the Patient Protection and Affordable Care Act (PPACA) could be forced to pay an average of $3,300 more in yearly premium costs if the Supreme Court strikes down subsidies this month, according to an article posted on The Hill. That steep cost increase would apply to every customer enrolled through HealthCare.gov.

A study by Avalere Health also found that four states — Mississippi, Maine, Alaska, and Wyoming — would face increases of $4,000 or more.

“Exchange enrollees are currently subsidized at a very high rate,” Elizabeth Carpenter, director at Avalere, told The Hill. “As a result, many individuals would likely find exchange premiums unaffordable without the tax credits provided under the law.”

In addition to the potential price explosion, a ruling against the PPACA could also cause major disruptions across the market. People who can no longer afford coverage but are in generally good health would be more likely to drop out. That could “materially impact the risk-pool in both 2015 and future years,” the study warns.

Moreover, many of the customers seeking cheaper options may no longer be able to re-enroll in their previous health plans.

About one-third of the people who would be affected by the ruling previously had employer-sponsored insurance. While some may be able to rejoin their plans, “reports from insurance companies indicate that many small employers may have stopped offering coverage after exchanges launched in 2014,” according to the study.

“We can’t assume that consumers will simply be able to return to previous sources of coverage if subsidies are struck down,” said Dan Mendelson, CEO at Avalere. “The [PP]ACA has fundamentally shifted the insurance market, and the elimination of subsidies would mean the vast majority of those adversely affected will struggle to maintain access to care.”

Source: The Hill; June 17, 2015.

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