The Supreme Court agreed Friday to consider a major new challenge to Obamacare, threatening the second year enrollment period which starts this month.
Opponents of Obamacare celebrated as the justices agreed to consider the the law’s system of subsidizing the insurance coverage it requires, USA Today reported.
The controversial law is facing legal challenges charging that billions of dollars in subsidies can only be offered in health care exchanges run by states. The federal government currently operates more than two-thirds of the exchanges.
The challenge comes from the specific language of the law, which states that subsidies, offered in the form of tax credits, will be offered in exchanges “established by the state.” Opponents believe that this nullifies the subsidies offered since the program began in 36 states that did not set up their own exchanges.
If the Supreme Court rules against this system of subsidies it would also eliminate tax penalties imposed on people and companies not in compliance with the law, essentially striking down the framework that Obamacare needs to work.
White House press secretary Josh Earnest said during Friday’s press briefing that the Obama administration believes the law will be upheld.
“This will work its way through the legal process,” Earnest said. “We continue to have high confidence in the legal argument, as a legal matter but also from a common-sense perspective.”
But Tom Goldstein, the co-founder of SCOTUS blog, told The Hill that the administration is not taking this seriously enough. He said they hold a “vision that ObamaCare’s legality is settled,” but there are still many parts that have not been looked at by the courts.
“Supporters of the law have been too dismissive of the case. It is a very serious argument and it threatens a death blow to the statute in most parts of the country,” Goldstein said.
For the healthcare industry and people looking to enter into the Healthcare.gov exchanges in mid-November, the Supreme Court case raises a lot of questions and doubt for the future.
At least $36 billion in subsidies could be at stake, according to the nonpartisan Robert Johnson Wood Foundation. As many as 7.4 million people could face a loss of subsidies by 2016 as a result of this decision.
Healthcare economist Chrissy Eibner also told The Hill that without these subsidies the law could cease to function.
She said the removal of subsidies would cause premiums to spike and subsequently cause enrollment to drop. That would likely create a cycle of increasing costs, forcing the government to rework the law entirely.
“We could have a situation here that the individual market is even less functional than before the [Affordable Care Act],” she said.
The White House and Enroll America both released statements Friday trying to assure people planning to sign up next week that “nothing has changed” yet.
But Elizabeth Carpenter, director of the healthcare consulting firm Avalere Health, told The Hill, that this creates an even bigger “cloud of uncertainty” for people.
“In some ways, stakeholders and key industry groups were beginning to kind of settle into some of the rhythms of the [Affordable Care Act], and certainly, this adds just another unknown variable,” she said.
