In a final push to get Americans to sign up for Obamacare coverage, the Obama administration is dangling a carrot: government subsidies many people can use to help purchase plans.
But those subsidies could be erased this summer.
In three weeks, the Supreme Court will hear the case King v. Burwell, challenging the legality of awarding the subsidies to those buying coverage via healthcare.gov. The justices’ decision — expected in June — could result in the subsidies being blocked from residents in the 37 states using the federal-run marketplace.
That possibility isn’t stopping officials from touting the government assistance as a major selling point of the law before enrollment ends on Sunday.
Officials released estimates earlier this week that nearly 6.5 million enrollees are qualifying for enough subsidies that the average cost for a plan dropped to $105 — although that average varies widely by state, ranging from $47 in Mississippi to $172 in New Jersey.
After the credits are applied, eight in 10 of all enrollees on healthcare.gov will pay $100 or less a month, according to the estimate.
“Millions of Americans already are counting on the financial assistance the Affordable Care act provides to put quality, affordable health insurance coverage within reach,” Health and Human Services Secretary Sylvia Mathews Burwell said in a statement. “This is further proof that the Affordable Care Act is working for the middle class.”
King v. Burwell hinges on part of the law that refers to the subsidies flowing through “an exchange established by the state.” That means it’s illegal to award the subsidies through the federal-run exchanges, according to the challengers in the closely-watched case.
If the Supreme Court sides with them, it won’t just be the premium subsidies that are blocked. There are also low-income subsidies to lower the costs for doctor or hospital visits. They, too, would be blocked from the states using healthcare.gov.
So, besides having to pay a higher monthly premium, low-income Americans would also have to cover the full cost of their plan’s deductible and co-pays.
For someone earning up to $17,655, the cost-sharing subsidies lower their average annual deductible from $2,556 to $229, according to a report released Wednesday by the Kaiser Family Foundation. And their average co-pay for seeing a primary care doctor is $14 instead of $28.
The cost-sharing subsidies decrease as a consumer’s income level goes up, and phase out entirely once they reach 250 percent of the federal poverty level.
While Obamacare plans vary widely by state, many insurers have been criticized for hiking deductibles in order to keep premiums lower, making plans more expensive for consumers than they are first appear. So the cost-sharing subsidies are important for making plans affordable, consumer advocates say.
“Cost-sharing subsidies under the Affordable Care Act can substantially reduce deductibles and other cost sharing for people with low incomes,” the Kaiser report says.
