Health plans, exchanges and associations share their reactions to the Supreme Court's King V. Burwell ruling.
In a win for President Barack Obama, the U.S. Supreme Court affirmed that it’s legal for federally-run exchanges to offer health insurance tax subsidies under the Affordable Care Act (ACA).
The 6-3 decision in King v. Burwell upheld a Fourth Circuit Court of Appeals ruling that language in the ACA did not distinguish between state-run and federally-run exchanges.
Plaintiffs argued that wording in the statute meant tax credits could only be offered through exchanges run directly by 16 states as opposed to those offered through the federal marketplace (34 states). Had subsidies on the federal exchanges been ruled illegal, over 8 million would have been in jeopardy of losing their health insurance, resulting in up to $36 billion in lost premium revenue for health plans, according to PwC.
Health and Human Services (HHS) Secretary Sylvia Burwell lauded the ruling that she defended to the high court. “Over 6 million Americans and their families will sleep easier knowing they will still be able to afford health coverage,” said Burwell in a statement. “Millions more won’t have to worry about an upward spiral in their premiums because of today’s decision, even if they didn’t buy their insurance through the Marketplace.”
Next: How Health Plans/Exchanges are Reacting
Independence Blue Cross
"Today's Supreme Court ruling helps ensure that we can continue to provide the security and stability that our members have come to expect from Independence Blue Cross, no matter how they purchase their health insurance coverage,” said Daniel J. Hilferty, Independence Blue Cross chief executive officer and Managed Healthcare Executive advisory board member.
“The decision provides consumers with continuity of coverage in a healthcare environment too often punctuated by uncertainty,” said Cigna spokesperson Joseph Mondy. “We will continue working with all relevant stakeholders to build a stronger healthcare system that consumers can depend upon-one that eliminates their fear of losing coverage or where they face expensive treatment that could threaten their financial future.”
Related: Oral arguments in King v. Burwell
"The Supreme Court’s decision to uphold the nationwide tax subsidies under President Barack Obama's healthcare reform reflects a common-sense approach to a complex, at times divisive, issue,” said Joseph Berardo, chief executive officer of MagnaCare. “As stakeholders continue to fine-tune the nation’s healthcare system in response to reform measures, we must continue to remain focused on ‘Total Cost of Care.’ Today’s ruling goes a long way to foster these efforts.”
“Today the Supreme Court made the right decision,” said Peter V. Lee, executive director of Covered California. “With the Affordable Care Act, millions of Americans join those with employer-based coverage in getting health insurance in part because of federal tax subsidies. The subsidies have helped millions of Americans, including individuals I have met whose lives were saved as a result of the care they received.”
Next: How Policy Organizations/Associations are Reacting
Association for Community Affiliated Plans
Margaret A. Murray, chief executive officer of the Association for Community Affiliated Plans (ACAP) and a Managed Healthcare Executive advisory board member, said the ruling means safety net health plans can now turn their focus to improving the law.
“Hopefully, this ruling sets the stage for constructive conversations about the way we can continue to improve on the ideas in health reform and continue to bring affordable health coverage to all of our fellow Americans regardless of income,” said Murray. “We have several ideas to better inform consumer choice and assure a level playing field for Safety Net Health Plans that we will share with Congress and [the Center for Medicare and Medicaid Services] regulators in short order.”
National Academy for State Health Policy
Trish Riley, executive director of the National Academy for State Health Policy, said states can now begin to move forward again. “The wait and see period is over… Leaders in the 34 states that rely on the [federal marketplace] can examine and improve coordination between their Medicaid and CHIP programs and the [federal marketplace] to ensure a seamless coverage experience; consider ways to make coverage more affordable in their markets; design new exchange models to offer states more flexible roles; and carefully review opportunities to seek significant waivers in 2017 that will allow for more state experimentation in providing affordable, quality coverage.”
America’s Health Insurance Plans
“With the certainty provided by the Supreme Court’s decision, now is the time to focus on what matters most to consumers-ensuring access to affordable coverage and high-quality healthcare,” said Dan Durham, interim chief executive officer or America’s Health Insurance Plans (AHIP).
American Benefits Council
In contrast, the American Benefits Council, a national trade association for companies concerned about employee benefits, said in a statement the ACA needs to be amended on a number of fronts. It called for an end to the 40 percent excise tax on expensive policies, also known as the "Cadillac tax"; a simplification of IRS employer reporting requirements for health insurance; and a repeal of the requirement that employers automatically enroll new full-time employees in health plans.
American Heath Policy Institute
Tevi D. Troy, president of the American Heath Policy Institute, said that, while the ruling preserves subsidies through the federal marketplace, other problems with the law still need to be addressed. “Today, 169 million Americans currently receive healthcare from their employer, but it is questionable if this trend will continue in the years to come with the increasing lack of affordability of average family premiums and deductibles as well as the looming healthcare excise tax, which will hit the average value plan come 2031,” said Troy.
National Center for Policy Analysis
John Graham, senior fellow with the National Center for Policy Analysis, said the six-member majority admitted the law was sloppy. “Nevertheless, relying on the so-called Chevron doctrine, the Supreme Court decided the administration is free to continue to spend billions of taxpayers’ dollars in tax credits that are not clearly authorized in the statute,” said Graham. “This is a dangerous notion. It encourages Congress and the president to write laws as ambiguously as possible, so that the President can bend the law this way and that way without interference.”
Next: How Consultants are Reacting
“I believe that Justice Roberts is delivering a message that SCOTUS is not going to be used to parse a bill that was approved by Congress and has been law for three years,” said Don Hall, healthcare consultant and Managed Healthcare Executive advisory board member. “His wording on the ruling is insightful about the approach the court will take on future non-ACA issues.”
Manat Health Solutions
Joel Ario of Manat Health Solutions, former director of the Office of Health Insurance Exchanges at HHS, said the ruling might result in renewed efforts to expand Medicaid in states that have so far declined to do so. “States that have not yet expanded Medicaid may choose to re-visit their decisions and work with the Federal government to develop state-specific approaches, now that the Court’s decision appears to remove the last remaining threat to the Affordable Care Act,” said Ario.
Anne Phelps, U.S. Health Care Regulatory Leader at Deloitte, said that the ruling “brings stability-the ground is no longer moving underneath their feet as much. Health organizations can move forward with their strategies knowing that individuals will be able to maintain coverage for the remainder of the 2015 plan year. It also allows them to prepare for the next open enrollment period this fall and remain focused on their consumers and growing individual markets for 2016.”
John Barkett, director of policy affairs, Exchange Solutions, Towers Watson, said the ruling is notable for what it won’t do. “It won’t disrupt the individual insurance market. It won’t force millions of people off their plans. It won’t deprive managed care organizations of millions of customers. The Affordable Care Act is here to stay. Healthcare providers and purchasers should focus on how they can best leverage the ACA in their business strategies."