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King v. Burwell Update

The Supreme Court should be releasing a ruling on King v. Burwell later this month. This decision will decide if the federal government is allowed, based on the strictest reading of the law, to give subsidies to enrollees in the Federal Exchange. While New York State set up its own Exchange and would not have to withdraw any subsidies, a ruling deeming Federal subsidies illegal would have a significant effect on how the Affordable Care Act makes insurance affordable for a large swath of newly enrolled Americans.

Kaiser has an excellent breakdown on how this ruling could affect each state,http://kff.org/interactive/king-v-burwell-effects. Imagine rates on individuals receiving subsidies going up 359% in Florida, 383% in Maine, and 650% in Mississippi – that could equate to a death blow to the ACA as a whole.

On top of this are the effects on the employer mandate. The Large Group employer is only subject to the penalty if an employee receives a subsidy. If the subsidies are illegal and done away with then the penalty to the employer is rendered meaningless.

So, could states like New York still have an employer mandate because of the State based Exchange, while neighboring States do not? Unfortunately, we only see a ruling against the subsidies being offered to those on the Federal Exchange as leading to additional legislation being added to an already huge Act.

Stay tuned, it could be another interesting summer of debates and changes!

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