Some are calling it a potential “doomsday event.” Others argue it won’t be so bad. While the impact of the U.S. Supreme Court’s not-yet-issued final ruling in King v. Burwell remains speculative at best, one thing is crystal clear: Florida sits squarely in the cross hairs.
The issue before the U.S. Supreme Court (SCOTUS), expected to rule later this month, is whether the financial assistance to consumers in the form of premium tax credits will continue to be available in all states. Should SCOTUS rule in the negative, residents of the approximately three dozen states with federally-facilitated marketplaces will no longer receive the credit.
The premium tax credit is a unique brand of subsidy provided by the Patient Protection and Affordable Care Act (the ACA) to those who meet the state-specific eligibility standards. The credits were designed to defray the cost of health insurance for an estimated 18 million low- and middle-income households. You may recall the seminal 2012 SCOTUS case National Federation of Independent Business v. Sebelius, where SCOTUS declared the ACA constitutional under Congress’ taxing power. In that case, SCOTUS also ruled that states were not required to expand Medicaid, a blow to the ACA. Despite myriad attempts to repeal the law since NFIB, this most recent case is the only real threat to the ACA and could be the second-biggest blow to the law since the Medicaid decision.
In his lawsuit, the plaintiff, 64-year-old David King, argues that the ACA specifies that the tax credits can only be used by consumers using an insurance marketplace that was “established by the state.” Those four little words, argues King, make it illegal to offer tax credits to anyone who is enrolled in the ACA through Healthcare.gov — the marketplace established by the federal government. The government counters that it was not the intent of Congress to provide the premium tax credits only to those individuals enrolled in a state-run marketplace, and that the law must be interpreted in its entirety and not just as to four words.
Withdrawing the premium tax credits will mean millions of Americans lose out. A state-by-state analysis by the Kaiser Family Foundation found that about 6.4 million Americans in 34 states that use the federal marketplace would lose a total of $1.7 billion monthly tax credit dollars. That is an average of $272 per person. These same people would face a net premium increase of 287 percent.
What does that mean here in Florida? Florida is among those states with a federally-facilitated marketplace, so the impact of losing the tax credit would be substantial. Kaiser reports that 1.3 million Florida residents would lose an average of $294 per month in tax credits and face an astonishing 359 percent premium increase, more than the national average.
Doomsday statistics aside, many sources are reporting that SCOTUS is likely to rule in the federal government’s favor, and the premium tax credits will remain intact. Justice Kennedy, one of the “swing” votes, says he sees “a serious constitutional problem” in the idea that Congress would force states to set up a marketplace or risk their residents losing the tax credit. Chief Justice Roberts, who upheld the ACA in 2012 but could also vote either way, is more of a mystery. However, some sources argue the plaintiffs’ case is so weak and, as such, a ruling in their favor could undermine the court’s legitimacy. With the regular suspects on their respective sides, though, it could be a close one. And with SCOTUS not set to issue its final ruling for another couple of weeks, there is plenty of time for minds to change. Check back here for the decision and analysis.
