by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
Yesterday, two federal appeals court panels released different rulings on whether Obamacare subsidies can be distributed to policyholders who have purchased health coverage through a federal exchange.
A little background context here:
The Patient Protection and Affordable Care Act (Obamacare) allows for states to set up their own state-based exchanges. If a state fails to do so, the federal government is tasked with administering an exchange for that state. To date, 36 states have opted for federal exchanges, while 14 have set up their own.
To be brief, the plaintiffs argue that the text of the federal health law cites numerous times that subsidies shall only be allocated to state-based exchanges, NOT federal exchanges.
Therefore, no subsidies for federal exchange policyholders means that these individuals would be exposed to the full cost of bloated Obamacare plans – making their coverage not so affordable. These lawsuits (Halbig v Burwell, King v Burwell) could potentially gut the “affordable” out of the Patient Protection and Affordable Care Act.
But according to Michael Cannon, director of health policy studies at the Cato Institute and Jonathan Adler, law professor at Case Western, these lawsuits have more important ramifications other than potentially putting Obamacare on life support. The plaintiffs seek to be “freed” from the burdens of Obamacare’s employer and individual mandates, and for the Obama administration to follow its own law for once.
Here’s where things get a little “in the weeds.” Read Cannon’s blog post here. He thoroughly explains the plaintiffs’ position and potential outcomes for employers and individuals residing in federal exchange states (including North Carolina).
Much more to come on these lawsuits…