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Friday, August 1, 2014

NC health insurance subsidies could go away

Posted by on Fri, Aug 1, 2014 at 12:37 PM

After the Affordable Care Act (ACA) barely made it out of the Supreme Court intact, the law could be heading back to the high court, putting affordable health insurance in jeopardy for hundreds of thousands of North Carolinians.

In North Carolina, the loss of these subsidies would be, as Adam Linker, policy analyst for the Heath Action Coalition at the North Carolina Justice Center, put it, devastating to the people and destabilizing to the market.

“There’s more than 320,000 people who are getting subsidies through the marketplace in North Carolina. You would basically have immediate premium increases for those people and many of them would not be able to afford insurance anymore,” Linker said.

In a ruling by the D.C. Circuit Court of Appeals, the subsidies given by the government for federally run health insurance exchanges set up by the ACA were deemed to not be a part of the law. The text of the ACA says subsidies are given to exchanges “established by [a] State,” so exchanges set up by the U.S. Department of Health and Human Services, like the one in North Carolina, do not get subsidized health insurance.

Linker called this an “absurd legal challenge,” which judges around the country seem to agree with, as other circuit courts, including our own 4th Circuit Court of Appeals, have ruled that federally-run exchanges can offer subsidies.

“I was in touch with members of Congress and staffers during the entire debate over the ACA and everyone thought and assumed and intended for people to be able to get subsidies in a federal marketplace state,” he said.

The D.C. Circuit’s ruling is not the law of the land yet, and the full D.C. Circuit Court has yet to rule on the law, but with courts disagreeing over the law’s interpretation, the chances of this challenge reaching the Supreme Court is more likely. Linker said it is not outside the realm of possibility for the Roberts court to rule against the ACA in this potential case.

“The entire structure of the ACA rests on the ability to offer subsidies,” he said. “We’re saying you can’t charge more for pre-existing conditions and we’re saying everyone has to buy insurance. For those two pieces to work, you really need to help the people who can’t afford insurance to buy it.”

A lack of insurance means a lack of access to health care, and in North Carolina, the effects are clear. North Carolina has one of the highest infant mortality rates in the country with 8.2 deaths per 1,000 live births. Nearly 30 percent of the country’s preventable deaths occur in North Carolina and surrounding Southeast states. Vaccination rates for North Carolina children have gone down over the past years. And the percentage of North Carolinians without insurance has actually grown over the past 10 years.

Now the subsidized insurance for over 1 million North Carolinians could be lost because the General Assembly did not set up a state-based exchange. When the program was set up, Insurance Commissioner Wayne Goodwin, a Democrat, advised the state to set up its own exchange, which would give North Carolina access to more insurance providers (only Blue Cross is available on the current exchange, or Coventry Health Care if you live in certain counties) for lower prices.

At the time, Gov. Pat McCrory said his opposition was based on the federal government not giving enough information on what creating a state-based exchange would cost. But before that, state Republicans like Rep. Nelson Dollar, senior chair of the House Appropriations Committee, supported a state-based exchange because solutions from the state level are better suited for North Carolina than some bureaucrat’s decisions at the federal level — strikingly similar to the General Assembly’s argument on why Common Core should be repealed.

This sentiment, however, was before other Republican governors started opposing opening a state-run exchange; a bandwagon McCrory then jumped on.

On the same subject of health care, North Carolina also rejected expanding Medicaid for more than half a million people who couldn’t afford the subsidized insurance in the exchanges. McCrory said in an interview with WFAE that he would still be open to expanding Medicaid down the road. The entire Medicaid system in the state just needs to be fixed first.

While subsidized insurance for North Carolinians may be at the mercy of an increasingly conservative Supreme Court, Linker said the definitions of what is an exchange established by the states and what is not is still a very vague term, so it’s possible that the subsidies will stay no matter what.

“Most states are, I would say, in-between partnership marketplaces, so it’s not clear to me what would end up being a federal marketplace state,” Linker said.

Aside from the court’s final ruling, the only other solution to this dilemma over what states get subsidies is for Congress to pass a bill amending the definition to explicitly include federal exchanges.

In other words, there is no other solution aside from a court ruling.

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