A Lawsuit Could Destroy Obamacare In These 36 States
A lawsuit challenging Obamacare subsidies has the potential to skyrocket the health insurance costs of 5.4 million Americans.
The decision lies on the shoulders of three federal judges, who will decide the legality of subsidies served through the federal health insurance marketplaces, a decision that impacts residents of 36 states. The decision could come as early as July 21.
The Affordable Care Act, colloquially called Obamacare, established what are known as health insurance marketplaces or exchanges, where consumers can buy health insurance plans. So far around 8 million people have signed up. Sixteen states operate their own marketplaces, and the remaining two-thirds of states use the federal marketplace, Healthcare.gov.
Under the ACA, Individuals who make less than $46,075 are eligible to receive subsidies, or tax credits, towards their premiums, which means they do not pay the full monthly cost of their health insurance. Without these subsidies their costs would quadruple.
On average, premiums in the federal exchanges are $82 per month for individuals who are receiving subsidies. The average cost without subsidies is almost four times that at $346 per month, according to a report from HHS.
The U.S. Court of Appeals for the D.C. Circuit is expected to rule on Halbig v. Burwell, which challenges these subsidies. As Business Insider's Brett LoGiurato reported, the Affordable Care Act was designed with the expectation that each state would run its own exchange, and part of the law notes that subsidies may be provided "through an Exchange established by the State." The challengers to the law argue that this means that, technically, the subsidies should only be available to the state-run marketplaces.
That means more than 5 million people in 36 states who are currently receiving health insurance subsidies through the federal marketplaces could potentially be shut out, as the graphic below shows.
The case will be decided by three federal judges. One supports the challengers and one doesn't. So it seems the decision will come down to the swing vote of Judge Thomas B. Griffith, a George W. Bush appointee. From the oral arguments heard in March, it's not entirely clear whose side he is on.