The Urban Institute recently estimated that almost 10 million fewer people would be covered in the individual insurance plan market if the subsidies are eliminated for HealthCare.gov customers, largely due to people ceasing to buy insurance altogether because it would no longer be affordable.
Nearly 9 out of every 10 Obamacare customers nationally gets federal tax credits to help pay for their monthly insurance premiums. The subsidies are available to households that earn between one and four times the federal poverty level, or $23,850 to $95,400 for a family of four.
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In the Supreme Court case set to be orally argued next Wednesday, plaintiffs claim such financial aid cannot be granted to customers of a federally run Obamacare exchange such as HealthCare.gov because the ACA does not, as written, authorize those subsidies.The plaintiffs say the ACA only explicitly authorizes those grants for customers of Obamacare exchanges run by an individual state.
The Obama administration rejects that argument as absurd. And for now, the administration is leaving it to Republican opponents of Obamacare in Congress to decide if they will come up with a plan to deal with the potential loss of affordable insurance plans for most HealthCare.gov customers.
The Avalere analysis comes after Health and Human Services Secretary Sylvia Burwell told Congress that the Obama administration has no contingency plan if it loses the case.
"We are confident that we will prevail" at the Supreme Court "because the text and structure of the Affordable Care Act demonstrates that citizens in every state would be entitled to tax credits, regardless of whether they purchased their insurance on a federal or state marketplace," Burwell wrote Congress in a letter Tuesday
"While we are confident in our position, a decision against the Administration in the King case would cause massive damage," wrote Burwell, citing the fact that millions would be unable to afford their plans, healthy people would be much less likely to buy insurance and states that were not operating their own Obamacare exchange would see insurance costs rise to deal with the effects of more uninsured people receiving uncompensated hospital care.
"We know of no administrative action that could, and therefore have no plans that would, undo the massive damage to our health-care system that would be caused by an adverse decision," she wrote.