On June 25, 2015, the U.S. Supreme Court released their decision in the King v. Burwell case concerning the provision in the Patient Protection and Affordable Care Act (PPACA), and ruled that subsidies will continue to be available in all states and not just those with state-based exchanges. Subsidies with federally-facilitated exchanges will continue, as the Obama administration intended. The ruling affirmed the earlier decision by the Fourth Circuit Court of Appeals.
California has a state-based exchange, known as “Covered California,” and this decision does not affect things in California, but the clarification is important and applicable to the residents in the 34 states that utilize the Federal Marketplace. Since nothing has changed as a result of this decision and NO ACTION is required by individuals who are currently receiving health insurance subsidies in California at this time.
The Court considered two possible scenarios in its decision:
- Adhere to the strict reading of the law that subsidies may only be available with state exchanges, OR
- rule in favor of the intent of the law for universal availability of subsidies in all states and all exchanged.
Following this ruling in favor of allowing premium subsidies to be distributed through both federal and state exchanges, the implementation of PPACA will continue and its insurance reform provision will remain in effect.
Since the continuity of subsidies, in both state and federal exchanges are no longer in question, it is our hope that legislation will make Health Care Reform more workable for both individual and business consumers. In addition, it is our hope that sate and federal policymakers will not focus their attention on efforts to reduce the cost of providing health care, as PPACA has still not fully addressed the issue. Lawmakers and regulators need to look at the portions of our health care system that are working well and keep a variety of health insurance products and options available to all consumers, and improve the areas that need adjustments. We believe the employer-based system has been reliable and effectively delivered health coverage to generations of Americans, and as a nation, we need to preserve it!
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