Up to 9.6 million people would lose their health insurance under Obamacare if the Supreme Court rules later this year that the law’s tax subsidies are not legal in the 30-plus states that use HealthCare.gov, according to a new study.
RAND Corp, a non-partisan think tank, estimated that coverage in the HealthCare.gov states would drop from an estimated 13.7 million in 2015 to 4.1 million if the Court rules against the Obama administration. The study also projected that premiums in the HealthCare.gov markets would increase by 47 percent.
The analysis puts the stakes of the latest challenge to President Barack Obama’s signature domestic achievement into stark perspective.
The Court will hear the King v. Burwell case in the spring with its ruling expected in June. The plaintiffs argue that the law’s language prohibits the law’s financial help from being administered in states with a federal exchange, HealthCare.gov. The challenge was for a long time dismissed as a serious interpretative stretch and baffled those who were involved in and followed the law’s drafting. But with the Supreme Court agreeing to hear it, it has become another existential threat to Obamacare.
More than 30 states are using the federal website in 2015, and more than 6.5 million people have enrolled through HealthCare.gov so far this year. Nearly 90 percent of them are receiving financial assistance.
Open enrollment lasts until Feb. 15, 2015, and, if the pattern from 2014 holds, the law will see a significant surge in sign-ups before that deadline. RAND is projecting 13.7 million people would be covered in the individual market in the 30-plus HealthCare.gov states, which provides the baseline for its estimate.
If the Court invalidates subsidies on the federal website, coverage would likely become unaffordable for most people, which is why RAND projects a 70 percent decrease. Those who continue to pay for their coverage would be more likely to be sick, which would in turn drive up premiums.
The law’s authors and supporters, as well as journalists who covered the Obamacare debate, have argued that it was always intended for subsidies to be available on state and federal exchanges. But its opponents have thus far gotten one lower court to agree with their interpretation and now the high court is taking the case.
The full RAND study is below.