Press "Enter" to skip to content

Overturn King v. Burwell, Create Chaos in Health Insurance Industry

An eager reader reminds me that the Supreme Court has agreed to hear King v. Burwell, the selfish conservative effort to sabotage of the premium tax credits offered under the Affordable Care Act. (Recall that King v. Burwell was the case the federal government won in circuit court. Companion case Halbig v. Burwell, which selfish conservative jerks won, was vacated and will be heard by the full Fourth Circuit this week.) At stake is nothing less than exploding costs for policyholders and chaos in the health insurance market in the 36 states that have not set up their own health insurance exchanges:

If the IRS rule is invalidated — and absent effective contingency planning — a state that has declined to create its own exchange probably won't be able to stave off the immediate destabilization of its insurance market. The Court will probably release its opinion in late June; its decision will take effect 25 days later. At that point, if the challengers prevail, the U.S. Treasury will probably have to stop issuing tax credits to users of federal exchanges. Enrollees who are unable or unwilling to pay the full cost of their insurance premiums could see their coverage terminated, perhaps as soon as 30 days after they fail to make a payment. Those who retain insurance are likely to be sicker than those who drop coverage, which will skew the risk pools and expose insurers to large, unanticipated losses [Nicholas Bagley, David K. Jones, and Timothy Stoltzfus Jost, "Predicting the Fallout from King v. Burwell—Exchanges and the ACA," New England Journal of Medicine, 2014.12.10].

Republicans could nudge the Court closer to impaling the ACA on its own wording by crafting real replacement legislation to minimize the impact of overturning King v. Burwell. Republicans may slobber over the prospect of killing Obamacare, but they surely don't want to price millions of Americans out of their health insurance and hit their insurance company friends with heavy losses.

A good Supreme Court, however, will not let any political maneuvers push it closer to a naked political power play and a ridiculous ruling against the common good.

7 Comments

  1. Tim 2014.12.14

    A good Supreme Court, we have one of those? I haven't noticed.

  2. Francis Schaffer 2014.12.14

    I am one who believes words matter. If the law states that only people who live in states which have their own exchange get the tax credits so be it. The blame then is on the governors of those states without exchanges to explain the situation to their citizens. For states with small populations like SD, ND, WY, MT, NE, etc they could have pooled their money to create an exchange, so the excuse of expense of creating is mute.

  3. Don Coyote 2014.12.14

    @Francis Schaffer. I don't believe states could pool resources and create joint exchanges since the ACA didn't allow for cross state line selling of health insurance.

  4. caheidelberger Post author | 2014.12.15

    Actually, Francis's suggestion may have some legs. Idaho piggybacked on the federal online exchange to enroll customers in its state plans. There's no reason states couldn't pool their resources to build a common online exchange to handle each state's set of in-state policies. Design one online system, then adapt the same base architecture for each state. Any legal problem with that?

  5. Francis Schaffer 2014.12.15

    I believe Conneticut build it's own website then sold the rights to other states.

  6. leslie 2014.12.31

    Slate is doing a good job exposing SCOTUS as black-robed unelected, life-time tenured politicians that no longer observe precedent.

  7. jerry 2014.12.31

    You are correct Cory in that they could pool their resources into a regional pool. The Medicare Advantage plans do just that regarding regional areas of coverage. Cost plans in the Medicare supplement market also do the same. It not only is possible to have that but in those cases, the insurance that is attached to those regions are state influenced and controlled.

Comments are closed.