The King case is fairly straightforward. At issue is whether the IRS overstepped its authority when it drafted a rule to permit subsidies in federal exchanges. On its face, the Affordable Care Act (ACA) does not provide for subsidies on federal exchanges. At issue is whether the term “state exchange” includes “federal exchanges.”

Thirty-four of the 51 exchanges are run by the federal government. If the Court agrees with the petitioners, millions of individuals living in those 34 states will lose their federal subsides - unless the President and Congress compromise to fix the law.

On March 4th, the Supreme Court was again the venue for the third (and probably not the last) round in the ongoing boxing match that is the Affordable Care Act. The government’s main argument is about the context and is that while the four word ACA provision at the heart of the controversy only mentions “state” run exchanges, in the context of the rest of the statute, this really means something along the lines of “exchanges at the state level run by either the state or federal government.”

The justices argued but all recognized that it served a critical function in the law.There were no decisions made last week and we will have to wait until June for an outcome. In the meantime, here’s what it could mean to you if subsidies are only available in a state exchange:

  1. If you are in a state that only has a federal exchange (34 states), there will no longer be financial assistance available to individuals who have purchased insurance on these exchanges; More than 8 million Americans will likely lose their insurance. 

  2. According to a RAND Corp analysis, those that could pay for insurance would face higher premiums and would have a smaller choice of plans, networks and hospitals

  3. With so many losing coverage, other major provisions of the law could impose unexpected burdens on patients and the health care community

  4. Hospitals and insurance plans that have counted on revenue from all the new members may not be reimbursed for those costs and could find themselves in financial disarray.

  5. It could be the start of the unraveling of the Affordable Care Act as we know it today.

For now, it’s business as usual. If you are an individual who has purchased insurance on a Federal Exchange and are getting financial assistance, continue to see your doctor. Take your medication. Take advantage of your no-cost preventive services. We will know more in June.

Washington has a state exchange and in Oregon, while the Cover Oregon State Exchange is going away, Oregon is using the federal exchange technology as the State Exchange. Neither WA or OR members would be directly affected by this decision.