A top hospital executive believes a "death spiral" could occur if the Supreme Court rules against the health insurance subsidies in Obamacare.
In an interview with CNBC's "On The Money," Mount Sinai Health System President and CEO Kenneth Davis said about 80 percent of the patients who are on health-care exchanges get subsidies—an average of about $300 a month or $3,600 a year.
"If the subsidies are eliminated," Davis told CNBC those patients are "going to say, 'I can't afford this', so they're going to drop out."
Without those monthly subsidies, Davis estimates about 8 million people could leave the exchanges. He adds that exodus "changes the insurance pool and puts it in what's called a 'death spiral.'"
He explained there are three pillars that are essential for the risk pool in Obamacare to work: guaranteed insurance, subsidies and mandates. "If you take away the subsidies, but leave the mandate, and leave the essential component of not denying coverage, the Affordable Care Act (ACA) won't work."
In a study released Thursday, The Congressional Budget Office estimates a repeal of Obamacare would increase the U.S. deficit by $137 billion over the next 10 years. That runs counter to the claims of many Obamacare opponents that say ending the ACA would save the government money.
Davis said hospital systems like his could take a major financial hit as well.
"When this bill was all being put together, there were compromises from everybody on all sides." Davis says hospitals agreed to "take $300 billion less over the next 10 years, with the assumption that we'd be picking up all these new patients that would no longer come to the emergency room and be in the hospital for uncompensated care."
Davis told CNBC the $300 billion in government money is "cuts across the board from various aspects of the Medicare formula that reimburses hospitals." He added, "We agreed to $300 billion less with the assumption there were going to be a lot more insured people."