Within the next 15 days, almost 460,000 North Carolinians will learn whether they get to keep the federal subsidies that help them pay for health insurance.
A ruling on King v. Burwell, a lawsuit challenging Affordable Care Act subsidies in 34 states, is expected by the end of June. Only two states, Florida and Texas, have more people at risk than North Carolina.
If the court upholds the federal program that provides roughly $145 million a month to help North Carolinians buy private insurance, the lawsuit will fade to a footnote in the history of the American health care reform.
But if it overturns that aid, North and South Carolina will be hit by financial shock waves and political turmoil that will touch almost everyone. Everyone with insurance will eventually pay higher premiums, even if they don’t buy it through the federal marketplace, experts say.
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Unless a divided federal government or resistant state lawmakers come to the rescue, about 459,000 people in North Carolina and 154,000 in South Carolina would lose federal aid. On average, their insurance bills would more than quadruple, forcing them to find the money or lose coverage as early as this summer.
The subsidies, which are only available to people who don’t have qualified workplace coverage, are based on household income, with the most aid going to people who are least able to pay for insurance on their own. As people drop their coverage, the anticipated ripples range from rising premiums for everyone to growing numbers of patients seeking charity, skipping medical care and incurring bills they can’t pay.
And polls indicate that if this happens, many people will be blindsided. For all those who haven’t been following the case, here are five things you need to know.
Q. How fast would things happen?
A. If justices agree with the plaintiffs’ case, which contends subsidies are legal only in exchanges established by states, the ruling could take effect in 25 days.
If customers who lose subsidies don’t pay the higher premiums, insurance companies can cancel policies in 30 days.
Q. What can the federal government do?
A. Democrats in Congress are expected to propose revising the ACA to remove the words “exchanges established by the state,” allowing the current system to continue uninterrupted.
Republicans, who control both houses and have repeatedly tried to repeal the ACA, aren’t likely to go along. Instead they’re expected to propose extending subsidies in exchange for dropping key provisions of the act, such as the mandate for everyone to buy coverage.
Even if the Republicans agree on a plan – they haven’t yet – President Obama is expected to veto any proposal that would gut his signature health care reform.
Meanwhile, Secretary of Health and Human Services Sylvia Burwell says her office has no authority to undo the “massive damage” that would result from a ruling for the plaintiffs.
Q. What can the state do?
A. States could create their own exchanges to take over the task of selling private policies and distributing federal subsidies. But that’s a complex task. Money the federal government provided to set up state exchanges in 2014 is gone now.
And if North Carolina leaders are making contingency plans, they’re keeping it quiet. The Observer asked Gov. Pat McCrory, Senate President Pro Tem Phil Berger and House Speaker Tim Moore about preparations for the possible overturn of subsidies. McCrory and Moore didn’t respond. Berger’s office said it’s too early to speculate.
A recent analysis in Health Affairs Blog called North Carolina’s preparation “minimal” but said officials and observers the writers spoke to “were somewhat optimistic that North Carolina would move to create a state-based exchange.”
Q. How would this affect care?
A. Some have speculated that a ruling for the plaintiffs would spark an immediate rush for preventive care, medications and elective procedures from patients who expect to lose their coverage.
If the subsidies go away, people who lose insurance may forgo care and/or fall back on emergency rooms and charity clinics in a crisis. If, as predicted, the sickest people find a way to pay higher premiums while the healthiest drop their coverage, insurance companies will see costs soar. Hospitals, doctors offices and health-care stocks are all expected to take a financial hit as well.
Q. Who would get the blame?
A. If subsidies are overturned, Republicans are sure to cite it as an “Obamacare” failure. But they’ll be under the gun to come up with a better plan, which is no small task. Democrats, of course, will blame any upheaval on Republicans who undermined the current plan.
It’s hard to tell how citizens will respond. Five years after the ACA was approved, there’s still a lot of confusion about what it does. A recent poll for ABC News and the Washington Post found that support for the ACA is at a record low, but a majority of Americans hope the Supreme Court doesn’t overturn the subsidies.
What’s at risk?
Here’s the scope of Affordable Care Act subsidies being challenged in King v. Burwell.
6.4 million people in 34 states using the federal exchange
$272 a month
$316 a month
$281 a month
Average increase if
subsidies are eliminated
What they’re saying
From the left
“You can’t exaggerate the catastrophe this would be on the insurance market if this were struck down. No one’s going to be allowed to stand back and say, ‘Too bad. It’s somebody else’s fault.’”
Adam Linker, health policy analyst for the progressive N.C. Justice Center.
From the right
“If people lose subsidies it doesn’t necessarily mean they’re going to lose their actual health insurance.”
Katherine Restrepo, health policy analyst for the conservative John Locke Foundation.
From the state senate
“While we are awaiting the court’s decision, it is still too early to speculate.”
Shelly Carver, spokesman for N.C. Senate President Pro Tem Phil Berger, when asked what state lawmakers are doing to prepare.