Dive Brief:
- A federal judge has refused to dismiss a lawsuit that, if successful, could cause more than 110,000 state residents to lose federal subsidies used to purchase health insurance bought on the federal marketplace.
- The suit, which was brought by Republican Gov. Mike Pence and Attorney General Greg Zoeller, asserts that Indiana citizens are not entitled to the subsidies because the state did not establish a state-run health exchange. According to the plaintiffs, a literal reading of the law limits subsidies for health insurance policies to those bought on state-run exchanges.
- Observers note that the case is unlikely to go to trial, as one or both of two other cases addressing the same issue should go before the Supreme Court before the Indiana case is resolved. The Indiana suit follows on the heels of ideologically-similar cases Halbig v. Burwell (which overruled the IRS regulation that provided subsidies to individuals purchasing plans on the federal exchange) and King v. Burwell (which ruled in favor of the federal government), decided last month.
Dive Insight:
According to federal health data, 132,423 Indiana residents bought policies through March 31 via federal health marketplace HealthCare.gov, which residents used because the state chose not to establish its own marketplace. The governor is now using that failure to establish a state exchange to forward his larger agenda; He has publicly said, as recently as last month, that he's still against the ACA and believes it should be repealed.
If the state officials win their case, it could come at a high price to those currently insured through the federal marketplace. 89% of Indiana residents signing up for policies through the federal exchange have received federal subsidies averaging $4,000 per person to help them afford coverage. It's likely that nearly all of the younger residents who bought coverage through the exchange will lose their coverage without the subsidies.
Want to read more? You may enjoy this story explaining the implications of the Obamacare rulings in one graphic.