King v. Burwell Requires Addressing the Affordability Crisis
By - The Supreme Court will soon rule on King v. Burwell, a momentous lawsuit intended to essentially reverse various pieces of the Affordable Care Act (ACA) with the possibility of subsidies for 6.4 million Americans coming to an end. Although a decision was expected to roll in earlier this morning, none came; the healthcare industry waits.
Joel White, President of the Council for Affordable Health Coverage, spoke with RevCycleIntelligence.com about the greater implications of King v. Burwell for the healthcare industry.
White predicts Congress is going to act quickly. He expects Congress to move the bill through either the Committee or Congress within 30 days, likely before July. The bill may go through the House, then the Senate, and possibly land on the President’s desk, he says.
Within the next 5 years, affordability is the springboard for legislative action and reaction. “Regardless of what happens with King v. Burwell, regardless of what happens with the presidential election, we’re looking at roughly 50 percent of a typical family’s income being spent on healthcare premiums just in the next 10 years,” White states. “We will be addressing this. We will be revisiting this. We can’t ignore the affordability crisis anymore because health costs continue to outpace the economy and wages,” he says.
There will be a hearty wave of legislative activity making headway at this time, says White. “I think as soon as the ruling comes out, if it goes for King, the focus goes almost exclusively to the King dialogue,” White maintains. “If it doesn’t go to King, I think you’ll see a literal avalanche of legislation being introduced around the Affordable Care Act. Every member of Congress that I’ve talked to over the past six months has said, ‘I’m waiting for the King decision to introduce my bill.’ There’s going to be a lot of legislative activity in July,” he adds.
What the healthcare industry fails to realize, he says, is that about 2/3 of beneficiaries may drop their coverage and need to pay the full freight. “If you look back at 2014, about 78 percent of individuals who were eligible to enroll in an exchange plan did not because they didn’t qualify for a subsidy,” says White.
Subsidies are vital for beneficiaries when they sign up for coverage, says White, who predicts 2 of 3 beneficiaries will disenroll and the remainder to be either very ill or have significant chronic diseases, such as cardiovascular disease, diabetes, or cancer. “The risk pool will probably become a lot less healthy. Premiums will likely go up significantly,” he says.
“HHS has flexibility to work with states. Once the decision comes out, if it goes for King, we expect them to use the tools at their disposal to do so.” White maintains. “We expect around 2/3 of the states, such as Pennsylvania, Delaware, Oregon, Hawaii, and Virginia, to work with HHS on this.”
The remaining 1/3 of states, he says, probably did not expand Medicaid and did not desire to set up a state-based exchange, such as Alabama, Mississippi, and Texas.
The greater implications of such may prove dangerously problematic, he claims. “I think you’re going to have a real political battle in those states. It could be the new war of the South,” White predicts.
“I think Congress would work and try to address the issue by passing legislation to temporarily send subsidies to folks in those affected states,” states White. “What the administration has said is they would veto anything that had extraneous things attached to it, like repealing the individual employer mandate. It’s an unfortunate message to say we’re not even going to consider flexibility as costs are increasing, but that’s what the administration is doing,” he adds.
