Supreme Court Case Affects Millions of Health Exchange Enrollees

The latest government public health insurance exchange enrollment figures underscore the impact an upcoming U.S. Supreme Court decision on the legality of federal premium subsidies could have on reducing the number of Americans without health insurance.

Individuals eligible for health care reform law premium subsidies paid, on average, just $105 a month for coverage purchased through federal health insurance exchanges, according to a report released Monday. Without those subsidies — available to uninsured individuals with incomes up to 400% of the federal poverty level, which in 2015 is $47,080 for a family of one and $97,000 for a family of four, the average monthly premium would have been $374, according to the U.S. Department of Health and Human Services report. The report examined plans and costs in the 37 states, such as Texas and Florida, in which HHS operates the exchanges after those states declined to do so.

In all, 53% of enrollees so far selected coverage during the 2015 open enrollment season, in which they paid a monthly premium of less than $100 after federal subsidies, while 31% of enrollees opted for a plan that cost them $50 or less per month after the subsidy.

Eighty-seven percent of the nearly 7.5 million people who opted for coverage in the federal exchange from Nov. 15 through Jan. 30 used a premium subsidy to fully or partially offset the cost of coverage, according to the HHS report.

Among the 37 states, the biggest percentage reduction in premiums by those selecting coverage and were eligible for federal premium subsidies was in Mississippi, where the average premium of coverage selected through the exchange was $411 a month. On average, enrollees were eligible for a federal premium subsidy of $364 a month, which brought the monthly premium down to $47 a month, a reduction of 89%.

Federal exchange enrollees in Alaska had the biggest dollar reduction in the premiums they paid after the application of the federal subsidy. Alaska enrollees selected plans with an average monthly premium of $652. On average, enrollees received a monthly subsidy of $534, which brought down the premium they paid for coverage to $119 a month.

Those premium subsidies, though, are at stake in a suit before the Supreme Court, King v. Burwell, which is scheduled for oral arguments March 4.

Plaintiffs argue that the Patient Protection and Affordable Care Act only permits premium subsidies in states that have set up exchanges. Regulations issued by the IRS in 2012 authorized the subsidies in both federal and state exchanges.

So, far, though, just 13 states plus the District of Columbia have established exchanges.

If the Supreme Court were to strike down the IRS rules, the 6.5 million enrollees in the federal exchange who have so far received subsidies during the 2015 open enrollment season would lose the subsidies, with many then unable to afford to pay premiums.

That, in turn, would lead to a big increase in the number of uninsured, unless Congress were to act.

A Supreme Court decision is expected by the end of the current term in June.

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