The Obama Administration may have won the first round of healthcare reform, but there are still many others to come.
Starting in 2014, the law requires most Americans to have health insurance, and offers subsidies to help people pay for insurance bought through markets known as insurance exchanges. But several states have declined to issue the exchanges, and the question is whether or not the subsidies will be available through the federal government in states that fail or refuse to establish their own exchanges, now that the Affordable Care Act holds.
Critics say only those who obtain coverage through state-run exchanges will be eligible, according to Robert Pear of The New York Times. But the White House says “the law can be read to allow subsidies for people who get coverage in federal exchanges as well,” according to Pear.
The law requires that each state shall establish an exchange. But in the way the law is set up, Washington could be running the exchanges in one-third to half of all 50 states, where local officials have been moving slowly or openly opposing the idea.
Pear noted that the Congressional Budget Office predicts 23 million uninsured people will gain coverage through exchanges and that all but five million of them will qualify for subsidies – averaging more than $6,000 a year per person.
That is, subsidies, in the form of tax credits, will be available to people with incomes from the poverty level up to four times that amount ($23,050 to $92,200 for a family of four), according to Pear. The law says those funds will be offered to residents of a state to help cut the cost of health plans offered “through an exchange established by the state.”
The Christian Science Monitor describes the exchanges as “a sort of online bazaar in which insurers would hawk different kinds of plans.” The article noted that of the 25 million who will shop for coverage in these exchanges, about 19 million will qualify for financial aid.
James F. Blumstein, a professor of constitutional and health law at Vanderbilt University, told Pear that the dispute over subsidies “involved a serious legal issue.”
“The language of the statute is explicit,” Blumstein said in an interview with Pear. “Subsidies accrue to people who obtain coverage through state-run exchanges. The I.R.S. tries to get around that by providing subsidies for all insurance exchanges. That interpretation will almost certainly be challenged by someone.”
Edited by
Braden Becker
