Do I understand how insurance rates work better than the Oklahoma Attorney General??
2019 OPEN ENROLLMENT ENDS (most states)
Time: D H M S
At first, this article in the Washington Times doesn't look like anything special...it's basically one of dozens of stories about the potential political and real-world impact of the King v. Burwell decision on a specific state...in this case, Oklahoma:
OKLAHOMA CITY (AP) - While the U.S. Supreme Court considers a key case related to the Affordable Care Act, officials in Oklahoma have taken little action to prepare for a ruling that could threaten the tax subsidies nearly 90,000 residents are using to purchase health insurance.
HOWEVER, it's the next couple of paragraphs which made me do a double-take:
Because Oklahoma opted not to create a state exchange where residents could shop for health insurance, Oklahomans instead purchased their plans through a federal exchange, but opponents who are challenging the law, including Oklahoma Attorney General Scott Pruitt, argue the law only allowed for the subsidies through state exchanges.
Pruitt maintains that if the Supreme Court strikes down the requirement that employers provide health insurance and that individuals obtain it, the cost of health insurance will plummet and the need for subsidies will diminish.
Read that last sentence again, carefully.
The first point, of course, is that the King v. Burwell case technically has nothing to do with the individual or employer mandate. Even if the plaintiffs win, both of the mandate sections of the ACA would remain in place; it's only about whether people can receive tax credits (and, in many cases, cost sharing reduction) to help them afford their policies.
However, I'm assuming that what Pruitt is referring to here is the fact that killing the tax credits in Oklahoma (and over 30 other states) would also indirectly kill the mandates as well. How? Well, one of the provisions of the ACA is that if the cheapest Bronze plan would cost more than 8% of your household income, you're exempt from the individual mandate.
Tax credits are available for households making up to 400% of the Federal Poverty Level, which is around $80K for a family of 3. The least-expensive Bronze plan in Oklahoma City, OK for a family of 3 (46, 45 and 9 years old) is currently $414 per month (I checked), or $4,968 per year. That's 8% of $62,100/year.
In other words, the vast majority of those 90K Oklahomans (actually more like 88,000 or so) would be exempt from the individual mandate if the tax credits were killed in the state.
As for the employer mandate, well, the ACA states that companies only have to pay the mandate fee if at least one of their full-time employees receive a premium tax credit via the ACA exchanges. Since killing the tax credits means that none of their employees would receive them, that leaves most of those employers off the hook (at least assuming they don't operate in any of the states with their own exchanges).
OK, so OK Attorney General Pruitt is correct, in a roundabout way, that the plaintiffs winning King v. Burwell would (mostly) kill the individual and employer mandates. Fair enough.
HOWEVER, that brings me to the second, and far more "WTF" point:
Did he just seriously argue that killing the federal tax subsidies and individual and employer coverage mandates, while simultaneously KEEPING the Guaranteed Issue provision would somehow lower health insurance costs?? (and not just lower them, but cause them to "plummet"???)
Wow. That's just...wow.
The question here: Was Pruitt being deliberately dishonest or simply delusional when he said this?