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TripleTree Blog – “Despite the King v. Burwell Distraction, Healthcare’s Leaders and Innovators Move Forward”

See an excerpt from the post below and read the full blog here.

“The Supreme Court made headlines last week as it heard oral arguments in King v. Burwell, the second marquee legal challenge to the Affordable Care Act.  The lawsuit centers on the legality of providing subsidies to the federally-run exchange as opposed to only state-run exchanges.  The plaintiffs argue that the law, as it is written, only explicitly allows federal subsidies for exchanges ‘established by a State’.

“The ruling has the potential to jeopardize insurance coverage for the ~7.7 million individuals who purchased plans through in the 34 states that did not set up a state-based insurance exchange.  The worst case scenario for the law as it stands today would effectively wipe out the individual mandate and undermine the core of the ACA.  This means the cost of insurance for those ~7.7 million individuals would spike as subsidies (which offset ~75% of the total cost of premiums) are eliminated.  The healthiest individuals would likely opt-out and pay the mandated fine, whereas the sickest individuals would keep their coverage.  The result would be gross adverse selection and a highly acute pool of insured individuals, which would dramatically increase premiums, creating a vicious cycle.”