Dive Brief:
- Another ruling came down this week regarding tax subsidies on the federally-run health exchanges. On Tuesday, US District Judge Ronald White in Oklahoma said providing tax credits through state exchanges run by the federal government was not a correct interpretation of the law and that the tax credits were meant only for exchanges run by the states.
- White's ruling has been put on hold pending an appeal. A spokesperson from the US Department of Justice has said they will appeal the ruling. White was appointed under George W. Bush and the case was brought by the state's Republican Attorney General, Scott Pruitt.
- Two other rulings have been split on the matter and the issue will likely be put to the US Supreme Court at some point. In July, the 4th Circuit Court of Appeals in Richmond, VA found that subsidies were legal on federal exchanges and a federal appeals court for the District of Columbia ruled that they were not. In the decision in DC, the high-profile Halbig v. Burwell, the US Circuit Court of Appeals for the DC Circuit has granted an en banc rehearing. Meanwhile, a similar lawsuit is also being considered in Indiana.
Dive Insight:
Polling has found that Americans don't necessarily understand the lawsuits regarding the subsidies. What people do seem to know, however, is that if someone is eligible for subsidies, he or she should get them. A poll taken this summer of almost 2,000 registered voters found that 58% of those surveyed felt that all exchanges—no matter who runs them—should provide subsidies to help low-income people pay for premiums.
The ramifications for hospitals, if the cases are decided in favor of the plaintiffs, are huge. Approximately 5 million people are signed up for the subsidies, with discounts averaging about 75% of the face value of their premiums, according to the Department of Health and Human Services. These people may find insurance too expensive to purchase without the subsidies. And because the employer mandate applies only if employees receive federal tax credits, employers would be able to drop coverage without paying a penalty in the 36 states using the federal exchange.
Want to read more? You may enjoy this story on the Halbig case and the court decision to grant an en banc review.