Posted on March 9, 2015
A new Health Affairs blog examines the oral arguments in King v. Burwell, focusing on the plantiffs’ reading of the Affordable Care Act (ACA) regarding states establishing their own exchanges for the benefit of federal subsidies. Under this interpretation,the law was intended to encourage states to create their own exchange, or else receive no federal subsidy funds, which may be viewed as coercive by the Court. The blog draws parallels between the Medicaid coercion argument in NFIB v. Sebelius, where the Supreme Court ruled that requiring states to expand Medicaid under the ACA at the price of withdrawing federal funding would be unconstitutionally coercive, and the similar argument of coercion brought up in the King case. The author contends that potentially the Court will realize the deeper constitutional implications of upholding the plantiffs’ reading of the law and allow federal subsidies to continue flowing through federally facilitated exchanges.
Posted on March 4, 2015
A perspective piece published in the New England Journal of Medicine predicts potential fallout from a ruling in favor of King in the King v. Burwell case currently being decided by the Supreme Court. If the challengers prevail, the U.S. Treasury will likely have to stop issuing tax credits to users of federal exchanges. Enrollees who are unable or unwilling to pay the full cost of their insurance premiums could see their coverage terminated. The authors suggest that states could choose to set up their own exchanges and delegate some responsibilities to private contractors, in order to avoid some of the technological challenges. However, the authors also note that some states may be unwilling to set up their own exchanges, in the same way they chose not to expand Medicaid. This could lead to substantial coverage gaps for many Americans.
Posted on March 4, 2015
The Supreme Court of the U.S. heard oral arguments today in the King v. Burwell case, which challenges the availability of tax subsidies for individuals who purchase their health insurance on a marketplace created by the federal government. The case centers around language in the Affordable Care Act (ACA) which states that an individual is eligible for a premium subsidy, via a tax credit, if he or she is “enrolled through an exchange established by the State.” Based on this statutory language, those in state based exchanges are not at risk of losing their subsidies. The Supreme Court’s decision will apply only to the 34 states that have federally facilitated exchanges. The oral arguments featured two high-profile lawyers, Michael A. Carvin of the Washington, D.C., law firm of Jones Day, for the challengers, and U.S. Solicitor General Donald B. Verrilli, Jr., defending the Administration.
Posted on July 22, 2014
Today, two federal appeals courts issued contradictory decisions regarding the availability of advanced premium tax credits, or subsidies, for federally-facilitated marketplaces (FFM). In a 2-1 decision in Halbig v. Burwell, the US Court of Appeals for the DC Circuit ruled that the Internal Revenue Services (IRS) did not possess the authority to issue subsidies for qualifying individuals enrolling in FFM. In a similar case entitled King v. Burwell, the Fourth Circuit Court of Appeals in Richmond unanimously upheld that subsidies may be offered by the IRS in both federally-facilitated and state-based Marketplaces. Under the Affordable Care Act (ACA), individuals earning 400% or less of the federal poverty level may receive subsidies in order to offset some of the premium costs for obtaining health insurance through the ACA Marketplaces. The differing opinions issued today indicate that this issue will likely be taken up by the Supreme Court.
Posted on January 15, 2014
A DC federal court judge ruled today that premium subsidies are permissible in federally-facilitated Marketplaces (FFM) established by the Affordable Care Act (ACA). In the case, Halbig v. Sebelius, the plaintiffs argued that premium subsidies, or advanced premium tax credits, to help individuals earning between 100-400% of the federal poverty level purchase insurance were only intended for states operating state-based marketplaces. The court, however, found that congressional intent was to offer premium subsidies for individuals enrolling in all marketplaces. Similar cases are still pending throughout the country.
Posted on August 13, 2013
In a ruling issued yesterday, Judge Ronald A. White of the US District for the Eastern Division of Oklahoma said that Oklahoma may proceed with their case challenging the legality of the Internal Revenue Service (IRS) provision allowing individuals to receive subsidies from federally-facilitated Marketplaces. Oklahoma is arguing that as the Affordable Care Act (ACA) is written, only residents of states that are running their own state-based Marketplace are eligible to receive federal subsidies to offset premium costs. The ruling stated that Oklahoma had standing to challenge this portion of the ACA, as the state qualifies as a large employer that will face higher costs due to the law.
Posted on July 1, 2013
DC District Court Justice Beryl Howell dismissed a lawsuit against the Affordable Care Act’s (ACA) individual mandate. The lawsuit was brought forth under the Origination Clause, which states that all bills designed to raise revenue must originate in the House of Representatives. Justice Howell ruled that the ACA’s individual mandate was not created for the intent of raising revenue, and any shared responsibility penalty received by the government is a result of entities choosing not to obtain coverage, thereby “symbolizing the government’s failure to obtain its stated goal of universal coverage.”
Commonwealth Fund study finds insurers spend less than 1% of premium dollars on health care quality improvement
Posted on March 22, 2013
The medical loss ratio (MLR), a requirement within the Affordable Care Act (ACA), states that insurers must spend either 80% or 85% of their premium dollars on medical claims or quality improvement. A new Commonwealth Fund study found that in 2011, insurers spent less than 1% of their premium dollars on quality improvement measures, which translates to a combined spending of $2.3 billion, or $29 per subscriber. The study describes how different insurer types (publicly traded, nonprofit, provider-sponsored, etc.) allocate their premium dollars, specifically focusing on measures for quality improvement.
Posted on December 27, 2012
Hobby Lobby, a Christian-run arts and crafts chain, filed for an emergency injunction on December 21, 2012 with the Supreme Court to block President Obama’s birth control coverage rules. Hobby Lobby’s complaint surrounds the Affordable Care Act’s (ACA’s) requirement that most employers cover contraception without copay.
Yesterday, the Supreme Court today denied Hobby Lobby’s request, which was joined by the Christian book company, Mardel. The U.S. Supreme Court said it will not decide the case before lower courts have ruled. Justice Sonia Sotomayor argued that the petitioners did not meet the standards requisite for a preliminary injunction. The court also denied the request that the court take up the entire case, in which they argue that the ACA’s contraceptive coverage requirement forces them to violate their religious beliefs.
The case will return to the district court for a ruling on the merits of whether the Obama administration can require employers who have religious objections to contraceptive coverage to provide said insurance coverage in their employer plan.
Posted on November 26, 2012
The Supreme Court on Monday ordered the Fourth Circuit Court of Appeals to examine the constitutionality of the Affordable Care Act’s (ACA’s) employer requirement to cover contraceptives without a co-pay. This move could put the ACA in front of the Supreme Court again as early as next year. The order was in response to a request from Liberty University, one of the groups that sued over the mandate in 2010. After the June ruling, the Supreme Court dismissed Liberty’s entire lawsuit. Over this past summer, Liberty asked the Supreme Court to reopen the arguments pertaining to the employer mandate and the contraceptive coverage mandate. The court agreed to the request and today’s order instructs the Fourth Circuit to review both pieces of the argument.