A Loophole Could be Obamacare’s Biggest Enemy

The Affordable Care Act: we’ve all heard the name, and we’ve all undoubtedly read numerous articles about this controversial bill. The ACA has been associated with speculation, rumors, and intentionally misleading information since long before the bill was actually enacted. Unfortunately, even after that the policy has been in place for several months, the fog hasn’t exactly cleared. Healthcare providers and administrators face constant frustration as they try to untangle the webs in thousands and thousands of pages of legislation.

And now, we have another concern – loopholes. About a year ago, David King and three other plaintiffs from Virginia brought a case against Obamacare to the Supreme Court that may have substantial consequences not only for the policy itself, but for healthcare on a nationwide scale.

So what’s the problem? The case, labeled King v. Burwell, hinges on a crucial interpretation of an ambiguous passage in the ACA. Essentially, the plaintiffs are trying to defund federal subsidies for dozens of states based on the choice of only a couple words. Whether this wording was carefully or carelessly chosen is up for discussion.

The issue at hand has to do with “marketplaces.” The purpose of these marketplaces is to allow the unemployed, self-employed, and others who don’t receive insurance through their workplace to shop for a policy. Because the federal government can’t force individual states to establish their own marketplaces, they formulated a federally run marketplace to provide coverage for residents of the 34 states that declined to participate.

But interestingly, a literal interpretation of the law suggests that federal subsidies are only legal in states that have established their own marketplaces. As there is no reference to federal marketplaces in the passages that cover subsidies, some (including King) claim that the government can’t use federal funds to support a nationwide marketplace that would compensate for the 34 non-participant states.

The exact portion of the bill reads:

“(2) (a) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 [1] of the Patient Protection and Affordable Care Act, […]”

The italicized section is the wording under dispute. Taken literally, it maintains that only state-established exchanges can provide the essential subsidies that make ACA policies affordable for lower- and middle-income people who do not get insurance through their employers.

Of course, practically speaking this wouldn’t make any sense, as the entire point of a federal marketplace is to provide service to residents of the states that don’t have their own “shopping” venues. But in legal terms, it’s a different story – one that shines light on why legislation often comes down to just a few strategically worded phrases and can end up bearing more pages than Tolstoy’s War and Peace.

Just recently, the Supreme Court agreed to hear the case. And although the dispute is minor, the consequences of the decision in July are huge. Beyond the stress the government will bear, hospitals and private practice doctors will have to shoulder the burden of the outcome as well. Sources predict that without federal subsidies, millions of people will be unable to afford insurance. Other predictions include a nearly 50% jump in insurance premiums and nearly 10,000 preventable deaths as legislators split hairs over semantics.

For those who work in medicine and simply want to do their jobs, it might not be so easy. Healthcare practitioners may have to adjust their pricing structures, insurance policies, new patient acceptance terms, billing procedures, and more to accommodate the outcome of this case. And that’s just until someone finds another loophole!

Sources:
The Day after King v. Burwell
SCOTUS Blog
King v. Burwell Fallout

About the Author:
Iris Stone is a freelance writer, editor, and business owner who has written on a range of topics. She has experience covering content on medicine, healthcare, and career training, as well as education. Iris is also interested in science and mathematics and is currently studying to be a physicist. Check out her Google+ Profile.