Professional Insurance Programs

BREAKING: Government Subsidy Alterations

A clause in the Affordable Care Act allowed the D.C. Circuit Court of Appeals to rule that the IRS regulation for authorizing tax credits ineligible inside federal exchanges. On July 22, 2014 in the case of Halbig vs. Burwell, the court decided that premium tax credits cannot be given in federal exchanges. The ACA mentions that premium tax credits are only available “through an exchange established by the state.” This means that in 36 states, ACA subsidies for insurance will not be available.

How does it affect me?

 An easy answer is: if you can afford private health insurance, then it won’t. Although, it may affect your community. Wisconsin is widely dependent on the federal Marketplace for subsidies. Overall, Wisconsin is ranked 17th for highest poverty rankings and thus, one of the higher states to have residents enroll in the federal healthcare system.

Although this ruling will not have any immediate repercussions on law functions or premium tax credits for those pending the “en banc” review or that of Supreme Court. The change is tightening the requirements to what it means to be a “low income household.” The law permits states to set up their own exchanges, but it is optional. If this law alteration sticks, it will throw the markets into chaos and worst case scenario- premiums will rise more than before due to an inability to underwrite. Even with expert predictions, we cannot fully grasp the implications of this statute until we record the data from the next open enrollment period.
The statute is named in favor of a conservative legal argument. This Republican-outvote is likely to force a Democratic uproar into full swing. So, we can predict that the dramatic public reaction will require the decision to be reconsidered by the full DC Circuit Court of Appeals with a total of 17 judges. For now, we will just have to see if this statute will remain.
For further questions or information, please contact your PIP agent today.


Source: Wisconsin Association of Health Underwriters