The Supreme Court’s decision about the legality of Obamacare subsidies in some states could put $65 billion in premium subsidies at risk, according to a report from Democratic Rep. Henry Waxman.
Next June, the Supreme Court will rule on King v. Burwell, determining whether the Affordable Care Act restricts subsidies to state-run exchanges alone. A ruling against the Obama administration, which argues that the ACA’s requirement that subsidies go to exchanges “established by the state” should include the federal website, would cut off subsidies and skyrocket rates for all HealthCare.gov’s customers.
Democratic staff on the House Energy and Commerce Committee issued a report Tuesday of the total amount of premium subsidies that would be eliminated if the Obama administration loses its case. Waxman, the ranking member on the committee, says taxpayers could save as much as $65 billion in subsidy payments by 2016 — markedly higher than previous estimates.
“The law’s opponents are continuing a series of legal challenges to undermine it,” Waxman said in a statement. “If the law’s opponents succeed, they will deprive Americans of $65 billion in tax credits, making it more difficult for millions of middle class families to have the health insurance coverage they need.”
The Democrats’ report suggests that the Supreme Court was wrong to decide to take the case, citing an editorial from The New Republic calling the argument that the subsidies are restricted to state-run exchanges “legally laughable.” Although King v. Burwell has made it to the Supreme Court, the administration remains adamant that it’s of little consequence.
The reasoning behind restricting subsidies to state exchanges alone, according to Obamacare architect Jonathan Gruber, was to pressure states into building their own exchanges. Gruber, of course, has since disavowed his previous comments explaining that side of the case and supports the Obama administration’s position. (RELATED: Obamacare Architect Claims Subsidy Comments Were Just A Speak-O)
Waxman has vocally supported the Obama administration’s position as well, but the report is a warning that if the Supreme Court does rule in the favor of the plaintiffs, implementing the health-care law as written will be extraordinarily difficult for states and the administration alike.
While states could move to build their own exchanges, that will likely take years and hundreds of millions of taxpayer funding to accomplish. Thirty-six states currently use HealthCare.gov.