SCOTUS decision could increase premiums by up to 2,000%. That's not a typo, even if the lawsuit's about one.
2018 MIDTERM ELECTION
Time: D H M S
Over at The New Republic, Jonathan Cohn has a must-read which summarizes, state-by-state, just how ugly things could get if the Supreme Court 1) does indeed rule in favor of the plaintiffs in King v. Burwell; 2) does rule that all ACA tax credits in the 36 states not running their own marketplaces (or possibly as low as 34 or as high as 37, depending on how the court defines "NOT established by the state") have to stop immediately; and 3) neither my own "Denny's Grand Slam Breakfast" solution nor the "State Exchange Two-Step" workarounds end up coming to fruition.
How ugly? This ugly:
The most extreme increase, by far, would be in Mississippi, where the average monthly premium would go from $23 to $438. That's an increase of almost two thousand percent. The likely reason is that Mississippi is a particularly low-income state, with many people who qualify for very large subsidies, deeply discounting the premiums they pay. The smallest increase would be in Arizona, where the average monthly premiums would go from $113 to $272, an increase of "just" 241 percent. The average increase in monthly premiums, across all states, would be from $82 to $346. That's a 422 percent hike. And, remember, projections show that most people now getting subsidies will not be able to pay the higher prices.
But wait, it gets worse:
Keep in mind that the map and the table significantlyunderstate the impact of removing the tax credits, because of a secondary effect that would take place. If large numbers of people drop coverage, insurers would have a much harder time keeping a stable balance of healthy and sick people. That would force them to raise underlying premiums, scaring off yet more people. A version of the infamous actuarial “death spiral” would follow: Lower enrollment would lead to yet higher premiums—which, in turn, would lead to even lower enrollment.
Yes, that's right. It's conceivable that the Supreme Court of the United States could effectively destroy the entire healthcare system over 4 missing words in a single sentence in a single paragraph in a single subsection of a 2,000+ page federal law:
"...established by the state". vs. "...established by the state or the federal government."
OR, of course, the Republican Party, which has control over both the U.S. House of Representatives and (in 2 months) the U.S. Senate could take 5 minutes out of their day to scribble those 4 words into the law. They could then have a PR bonanza, crowing from the rooftops about how they fixed the Democrat's incompetence, bla bla bla.
But that would involve having a sense of decency or humanity.
In the absence of that possibility, let's just hope that a) SCOTUS rules against the plaintiffs; b) a fair number of states set up their own "bare bones" state exchanges and/or c) the "two-step" workaround is able to mitigate the damage.