July | August 2017






States Brace for Fallout in King Case Ruling

Debra Miller, CSG Director of Health Policy
The future of federal tax subsidies and, perhaps, ultimately health insurance coverage for nearly 8 million Americans are at the heart of the King v. Burwell case argued before the Supreme Court earlier this month. Some state leaders are starting to talk about the potential fallout of the case.
In 34 states, 7.7 million people enrolled this winter for health insurance and qualified for tax subsidies to reduce their monthly premiums through the federally run exchange, HealthCare.gov, according to the latest federal data. The average monthly premium for those individuals fell by nearly $300, leaving an average monthly bill of $101.
“In West Virginia, we are hoping the Supreme Court comes down the right way,” said Sen. Ron Stollings, a practicing physician who also serves as co-chair of CSG’s Health Public Policy Committee. West Virginia established a state-partnership market, but that partnership with the federal government might not be enough to preserve the tax subsidies, he said.
If the court sides with the plaintiffs, Stollings said, he hopes a transition period is allowed for his state to move to a state-based exchange and save the tax subsidies for the nearly 30,000 West Virginians who are expecting them to make health insurance affordable. Among potential solutions, he speculated, is West Virginia joining with a neighboring state that already has implemented a state-based exchange.
Wyoming Gov. Matt Mead says his state will be in a tough spot if the court rules that subsidies can only be offered in states with their own exchanges. In Wyoming, more than 19,000 residents currently receive tax subsidies to lower health insurance premiums.
“If on June 30, if that’s when the case comes down, and they say no more subsidies for federal exchanges, it is going to cause a lot of turmoil. Not just for the state, and for those people, but for the private sector as well,” Meade said in a recent article published in the Casper Star-Tribune. It is unrealistic, he said, to set up a state-run exchange in a short period of time.
“I think we will be one of many, many states that will be scrambling, trying to find an answer and seeing whether Congress can provide the statutory fix that would be needed,” Mead said.
In Kansas, Rep. Barbara Bollier, who is a retired physician, said there has been very little discussion of the possible implications of the ruling due from the Supreme Court. “There is a huge budget crisis in our state. That’s what’s at the forefront.”
Bollier shared Meade’s opinion that the fix facing states would be daunting.
“From my perspective, the disruption to our country if King wins is just tremendous, and not in a good way,” she said. But she admits her opinion is in the minority in Kansas.
“I would say that the majority of legislators in office currently are opposed to the ACA and would like to see it fail, so a solution like that isn’t what they are looking for. They want failure,” Bollier told CSG.
Bollier said she doesn’t believe the ACA is perfect, but that it is meeting certain needs.
“In my opinion, we need to keep it to figure out what is working and not working,” she said, “and keep what is working.”
In Kansas, the latest federal health exchange data show that nearly 77,000 people will receive tax subsidies to bring the average premium to $90 per month. CSG calculated the annual value of those tax subsidies as $194 million dollars.
Bollier said she hopes people would become engaged politically if the subsidies are put at risk by the Supreme Court ruling. But, she says, realistically that may not happen.
“The people receiving subsidies are hard-working people,” Bollier said. “They don’t have time to try to come to lobby. They don’t have the money to hire their own lobbyists. They don’t have the Koch brothers’ backing. They are in a tough place.”
Stollings agreed there has been little attention to the possible fallout of the Supreme Court decision in West Virginia.
“There is too much uncertainty to get worked up,” he said. “Everybody hopes for a transition period.”
Bollier says people in Kansas have talked about an interesting approach if the court rules against the subsidies in states without a state exchange. 
“One thing that has been floated in the state–could we declare our participation in the federal exchange as our state plan?” she said.
“West Virginia would work to make it work [if the Supreme Court rules against the administration],” Stollings said. “We think that access to health care is important.”
As evidence, Stollings pointed out that West Virginia was an early Medicaid expansion state. But, Stollings said, if the subsidies are lost, healthy people will leave the exchanges, perhaps not purchasing any health insurance. Sicker individuals will be left behind and premium prices will rise, especially for those at highest risk.
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