Tag Archives: King v. Burwell

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SCOTUS Saves Republicans in King v. Burwell

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Health insurance veteran Bob Laszweski takes a contrarian approach to the Supreme Court upholding Obamacare tax credits in at least 34 states that did not establish their own exchanges. Instead of a loss for Obamacare opponents, Mr. Laszewski believes Republicans were saved from stealing defeat from the jaws of victory in King v. Burwell:

First, as any of us who know the market can appreciate, the Court just saved the Republicans from themselves. They were in no way ready to avoid the crisis that would have engulfed the individual market––half of those people on the exchange who would have lost their subsidies and the other half off-exchange that would have seen 30% to 50% rate increases––on top of the big increases already announced––without a quick fix.

The attempt to scuttle the law through the Supreme Court was ill conceived and Republicans are very lucky it did not happen.

Now Obamacare has to stand on its own going into the 2016 elections and the growing evidence is that won’t be any easier.

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King v. Burwell: How Congress and President Obama Can Win

Perhaps within a few minutes, and certainly no later than next Monday morning, we will learn the Supreme Court’s verdict on King v. Burwell, the lawsuit alleging Obamacare tax credits in at least 34 states are illegal.

Victory for the plaintiffs will stop tax credits to health insurers covering most Obamacare beneficiaries, causing those individuals to face the full cost of their premiums. Congress and the president will have a responsibility to respond.

Unfortunately, Congressional leaders appear unwilling to accept this opportunity, publicly lamenting that the president would veto any bill passed in response to King v. Burwell.

We can do better. In a special publication published by NCPA, I propose six reform “buckets”, which should satisfy the priorities of both Congress and the president, should King prevail.

Lead more about our King v. Burwell proposal at this link.

Health Alerts

King v. Burwell: Fix Obamacare’s Job Killing Tax Credits

(A versio30-ways-to-cut-your-health-care-costsn of this Health Alert was published by Forbes.)

You read that headline right: It is not only those who pay Obamacare taxes who suffer, but those who receive them. That’s because the tax credits are calculated so perversely that people who receive them actually get punished for working more hours. In the wake of the Supreme Court’s forthcoming decision on King v. Burwell, which will determine whether tax credits paid in at least 34 states are legal, fixing this should be a priority for Congress and President Obama.

For the first time since 2012, the Congressional Budget Office has done a comprehensive estimate of the costs and benefits of Obamacare. The new estimate concludes that repealing Obamacare would increase Gross Domestic Product by 0.7 percent over the next ten years. The primary reason is the disincentive to work contained in the design of the tax credits.

Of course, President Obama is not going to repeal Obamacare. Nevertheless, in the wake of King v. Burwell, much of this problem can be alleviated without doing violence to the president’s goal of increasing coverage, as I describe in a new study from the National Center for Policy Analysis (NCPA). Continue reading King v. Burwell: Fix Obamacare’s Job Killing Tax Credits →

Health Alerts

Shrink Obamacare’s Costs by Removing Rule Driving up Young People’s Premiums

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(A version of this Health Alert was published by Forbes.)

The Supreme Court will soon decide King v. Burwell, the case that will determine whether tax credits being paid in at least 34 states without their own exchanges are legal. If the Supreme Court makes the administration follow the letter of the law, billions of dollars of federal tax credits will continue to flow to 16 states, but not the rest. This will result in a political crisis giving Congress and President Obama the opportunity to fix the worst aspects of Obamacare.

Here is one suggestion: Remove Obamacare’s rule forbidding accurate premiums by age. The difference in rates between young adults and older ones can be no greater than three to one. The actuarial consensus is that average health spending for 63-year-olds is five times that of 22-year-olds. However, instead of reducing premiums for older applicants, the rule dramatically increases premiums for younger ones. Continue reading Shrink Obamacare’s Costs by Removing Rule Driving up Young People’s Premiums →

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Top Health Insurance Expert: Republican Responses to King v. Burwell Will Fail

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Forbes colleague and insurance industry veteran Robert Laszewski has reviewed Congressional Republicans’ potential responses to a victory in King v. Burwell, the lawsuit that could upset Obamacare’s tax credits, and found them deeply wanting.

With respect to the House Republican proposal to give (what are effectively) block grants of Obamacare money to states:

I have no earthly idea how a state might opt out and build a brand new health insurance system in just a few months—and do it for what might only be two years!

With respect to Senator Johnson’s proposal (which I previously discussed), he is equally dismissive: Continue reading Top Health Insurance Expert: Republican Responses to King v. Burwell Will Fail →

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King v. Burwell Round Up

King v. Burwell, the case that challenges the administration’s illegal payments of billions of dollars of tax credits in at least 34 states without state-established exchanges, may be decided this morning or no later than June 29 (or so I learn from legal blogs).

NCPA has a list of responsible responses to King v. Burwell, that should be acceptable to both Congress and the President. Yesterday’s Health Alert described one of them. Of course, we are not the only ones. Here’s what some others have to say about it.

Let’s start with some recent polling:

Kaiser Family Foundation: Congress should act. Kaiser Family Foundation’s June poll reports that 63 percent of respondents believed that “Congress should pass a law so that people in all states can be eligible for financial help” if the Supreme Court rules for the plaintiffs. This question is framed about as gentle as it can be. Who is against “financial help”? The poll also reports that more people are opposed to Obamacare than favor it (42 percent to 39 percent). Continue reading King v. Burwell Round Up →

Health Alerts

Responding to King v. Burwell: Give Benefits to People, Not Health Insurers

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(A version of this Health Alert was published at Forbes.)

The Supreme Court is expected announce its decision on King v. Burwell soon. The case hinges on whether Obamacare tax credits can be paid in states that did not establish their own exchanges. If the plaintiffs win, health insurers will lose tax credits that allow them to offer artificially low premiums to Obamacare beneficiaries. About seven million people will suddenly be asked to pay full premiums for their plans. To be blunt, they will freak out, and many will drop out of Obamacare, putting the president’s signature achievement in jeopardy.

This gives Congress the opportunity to present the president with reforms that, while falling well short of the promise to “repeal and replace Obamacare,” can address some of its worst shortcomings. Here is one suggestion: Every single penny of Obamacare’s federal spending on health benefits goes to insurers. Not one penny goes to beneficiaries themselves. How about giving that money to beneficiaries directly, and allowing them to decide how much to spend on medical care directly, instead of premiums to health insurers? Continue reading Responding to King v. Burwell: Give Benefits to People, Not Health Insurers →

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Pa., Del. to Identify as State-Based Exchanges

There seems to be a trend in the United States of people formerly identifiable as a person with one set of easily recognized characteristics deciding that they “identify” as having another set of characteristics.

This is also happening with Obamacare exchanges. The Supreme Court will soon announce its decision in King v. Burwell, resolving the question of whether Obamacare tax credits can be paid in states using the federal exchange (healthcare.gov) or only states with their own exchanges. Some states with federal exchanges are trying to “identify” them as state exchanges.

Pennsylvania is one. Delaware is too, but it is called a State Partnership Marketplace. These State Partnership Marketplaces are not defined in the Affordable Care Act. The law defines clear blue sky between state and federal exchanges, and that tax credits can only flow through state exchanges. This difference was supposed to create the incentive for states to establish exchanges. It did not work. Continue reading Pa., Del. to Identify as State-Based Exchanges →