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Editorial: U.S. Supreme Court should uphold health insurance subsidies

Just after 1.6 million Floridians signed up for health insurance through the federal marketplace, the U.S. Supreme Court will consider blowing it up.
Just after 1.6 million Floridians signed up for health insurance through the federal marketplace, the U.S. Supreme Court will consider blowing it up.
Published Feb. 27, 2015

Just after 1.6 million Floridians signed up for health insurance through the federal marketplace, the U.S. Supreme Court will consider blowing it up. The court will hear arguments on Wednesday about killing the federal subsidies received by nine of every 10 Floridians covered through the marketplace. Outlawing the subsidies would gut health care reform, leave millions of Americans without coverage — and ignore what Congress intended when it approved the Affordable Care Act. The justices should reject this desperate attempt to make the law impossible to carry out and allow the subsidies to continue to be provided.

The issue in King vs. Burwell focuses on four words in a law spanning hundreds of pages. One sentence says the federal subsidies are provided to low-income people who buy private insurance on an exchange "established by the state.'' The plaintiffs say that means the subsidies should go only to individuals who buy insurance on exchanges created by states. Residents in Florida and 33 other states who buy coverage through the federal exchange, www.healthcare.gov, would be out of luck and ineligible for the subsidies. The Obama administration and other supporters of the health care law correctly argue that would be a ridiculous interpretation and would not reflect the context of the rest of the law.

No supporters of the Affordable Care Act say they wanted to treat low-income people who sign up for coverage on the federal marketplace differently from those who sign up for health insurance on state-run exchanges. There would be no reason to provide a subsidy as an incentive to sign up on a state-run exchange but not on the federal exchange. Individuals do not have a choice of exchanges, and the federal government pays the subsidies regardless of whether the exchange is operated by a state or by Washington.

The goal of the Affordable Care Act is to create a system where virtually every American has health coverage regardless of medical condition and the cost is shared as widely as possible. That's why there is the individual requirement to have insurance, and that's why there is the requirement that all but smaller employers offer coverage. The mandates are there to get healthy people coverage so that the risk is spread among many, and the federal subsidies are available on the exchanges to make coverage affordable. Without covering as many people as possible at a manageable cost, the system will fail.

Health care reform is not the theoretical debate it was when the U.S. Supreme Court upheld the guts of the law in 2012. Now it is working, and more than 11 million Americans have signed up for coverage through the state and federal exchanges. Nearly 175,000 Tampa Bay residents have signed up for coverage through the federal exchange, and the vast majority of them receive a subsidy to help cover the cost. Take away the subsidy, and one study shows more than 7.4 million Americans, including 1.4 million Floridians, would face a terrible choice: Drop their health insurance, or pay premium increases that in Florida would average 338 percent. Ouch.

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If the U.S. Supreme Court throws out the federal subsidies for insurance purchased through the federal marketplace, the Obama administration says it has no plan to help Americans keep their health coverage. Congress could pass legislation that would restore the subsidies, but that won't happen with Republicans in control. Florida could establish its own exchange so residents could receive the subsidies, but that is not likely with a Republican governor and Legislature.

It should not get to that point. The U.S. Supreme Court should recognize that the Affordable Care Act is intended to provide federal subsidies to buy health insurance, and whether that coverage is purchased on an exchange operated by a state or the federal government is irrelevant.