The affordability of health insurance — both for those who receive federal subsidies and those who do not — hinges greatly on the outcome of the Supreme Court's looming decision about whether it's legal to provide subsidies to residents in 37 states that didn't set up their own healthcare exchanges.
A swath of Americans who earn too much to qualify for government subsidies have been forced to find other ways to cut corners to afford coverage, according to
The Wall Street Journal, which reports that those who purchased silver and bronze individual plans on the exchange in 2010 and 2012 have seen premiums and out-of-pocket payments jump between 14 percent and 28 percent.
Even Americans earning "modest incomes," who qualify for subsidies, have struggled to afford health insurance. If the subsidies are axed, those people could likely be priced out of health insurance coverage altogether.
In King v. Burwell, the plaintiffs argue that President Barack Obama's landmark legislation, known officially as the Affordable Care Act (ACA), only allows for federal subsidies on state-run exchanges, not for those in states that use the federal exchange.
Approximately 7.5 million people stand to lose their subsidies if the court rules in the plaintiffs' favor.
Tax credits for plans bought on the federal exchange reduce, on average, the monthly premium for those eligible to about $100, according to the Journal. But if the high court rules that the subsidies are illegal, the average monthly cost would skyrocket to about $350 for residents of the 37 states that do not have their own exchange and rely on the federal exchange.
Thirteen states and the District of Columbia would be unaffected since they have their own exchanges.
Some 87 percent of people who bought a plan or were re-enrolled in the federal marketplace this year will receive subsidies to lower the cost of premiums, according to the Journal.
"Should subsidies be lost, the formerly subsidized will face premiums and out-of-pockets that are already a reality for the unsubsidized," Kev Coleman, head of research and data at HealthPocket Inc., told the Journal.
A Rand Corp. study found that without subsidies, individual plan premiums would increase by 47 percent in the affected states, resulting in a 70 percent drop in enrollment in the individual market.
"All told, it would lead to about eight million people becoming uninsured because of higher costs, the study found," according to the Journal.
Health insurance would become cost prohibitive and Americans who are "reasonably healthy" would forgo coverage, former Kansas insurance commissioner Sandy Praeger told
The Associated Press.
"Only the unhealthy would keep buying health care," she said. "It would really exacerbate the problem of the cost of health insurance."
Even before the Supreme Court’s decision, the Journal reports that a survey taken in March by McKinsey & Co. found that a third of the uninsured — 11.9 percent of consumers did not have insurance in the first quarter of 2015 — opted to forgo healthcare coverage because they couldn’t afford it. Those people will be slapped with a penalty, $325 for an adult or 2 percent of yearly household income, whichever is more.
The broader coverage mandated by Obamacare — maternity, mental health and pre-existing conditions — has resulted in more expensive health insurance, the Journal says. Consumers also pay more in out-of-pocket medical procedures and expenses.
"The same law has very different implications depending on a person’s circumstances," Coleman told the Journal. "For some, it means new access to health care at an affordable cost, and to others it means dramatic increases in premiums and deductibles. Neither side is wrong."
Leading Republicans see the court case as a chance to replace the law, and have been working on options that keep some components of the ACA but end, for example, some of the benefits now required on health plans.
The Hill reported last week that officials in some of the 13 states that have their own exchanges — Maryland, Connecticut, Rhode Island, Vermont, Massachusetts, New York, Kentucky, Minnesota, Colorado, Idaho, Washington, Hawaii and California, as well as the District of Columbia — are considering the creation of multistate exchanges, though the idea is fraught with logistical and regulatory challenges.
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