insurance exchanges

Kentucky Democratic legislators have passed legislation to try to maintain that state's Kynect health care exchange and its Medicaid expansion, the Courier-Journal's Tom Loftus reports. However, the legislation doesn't have a chance of passing the Republican-controlled state Senate.

Republican Governor Matt Bevin is doing away with Kynect and shifting to the federal healthcare insurance exchange. Bevin is also asking for a waiver from federal regulators for how Kentucky runs its Medicaid expansion.

The U.S. Supreme Court is considering whether low-income taxpayers can only receive subsidies for health insurance if they purchased their policies on state-run insurance exchanges, not federal exchanges. The four words at issue in the Affordable Care Act? "Established by a state." The New York Times' Robert Pear reports that the two dozen Democrats and Republicans involved in writing the law say those four words were not meant to make tax subsidies in the law available only in states that established their own health insurance marketplaces.

For example, former Senator Jeff Bingaman, Democrat of New Mexico, said the words in dispute are a "'drafting error."' Christopher E. Condeluci, who was a staff lawyer for Republicans on the Finance Committee, told Pear that, when senators drafted a backup plan to allow the federal government to establish an exchange in any state that didn't have its own, it was an oversight to not include a cross-reference to the section of the tax code providing subsidies.

But Pear notes that some Supreme Court justices, including Justice Antonin Scalia, interpret laws based not on "'what Congress would have wanted, but what Congress enacted.”'

Half of the 17 state-run insurance exchanges set up under President Barack Obama's health law are struggling financially, The Washington Post's Lena H. Sun and Niraj Chokshi report. The exchanges are facing financial distress because of "surging costs, especially for balky technology and expensive customer call centers — and tepid enrollment numbers." Federal funding for state-run exchanges has ended and exchanges now have to require their own costs of operation.

Some states are considering handing exchange functions over to the federal government but they are holding off until the U.S. Supreme Court rules by the end of June on whether the only way subsidies for health insurance can be provided to taxpayers is through coverage bought on state exchanges.

The U.S. Court of the Appeals for the Eighth Circuit has ruled that Missouri can't limit the ability of insurance navigators in helping consumers sign up for coverage through the federally run online exchange, the St. Louis Post-Dispatch's Samantha Liss reports. Missouri legislators passed legislation barring navigators from providing advice to consumers about health plans sold outside of the federally-run exchange.

The consensus about the latest Supreme Court case involving the Affordable Care Act is that the two key votes are Justice Anthony M. Kennedy and Chief Justice John G. Roberts Jr. The rest of the Supreme Court justices appeared to be split along ideological lines during oral arguments yesterday over whether the statutory language in the health law only allows federal subsidies to consumers who bought their health insurance through a state-run exchange, not the federal exchange.

The Washington Post's Robert Barnes reports that Kennedy said there was a constitutional problem with the interpretation of Obamacare that states had to create their own exchanges or the federal government would "'send your insurance market into a death spiral'" by taking away their subsidies. That is coercive pressure that the federal government is not allowed to apply, Kennedy said. Barnes further reports that "Kennedy brought up the 'standard of constitutional avoidance.' That means that if there are two possible interpretations of a statute, judges should choose the one that is plainly constitutional instead of the one that raises constitutional questions."

Roberts, who was the swing vote in upholding the constitutionality of Obamacare, did not ask any questions that provided insight into his leanings on the case, Barnes reports.

A ruling against the Obama administration would result in 7.5 million Americans losing their subsidies, Barnes also reports.

Next month, the US Supreme Court is going to hear a case over whether the Affordable Care Act authorizes the federal government to give subsidies to people who purchase health-insurance policies through the federally run insurance exchange. The argument against allowing the subsidies is that the law may have been drafted to only authorize subsidies given to people who buy their policies through state-run exchanges. If the justices rule in favor of that argument, Florida could lose $441.9 million in subsidies, Texas $247.5 million, North Carolina in $163.2 million and so on, the Washington Post's Greg Sargent blogs.

Sargent also notes that a number of states have argued that they had no notice that their decision not to set up their own exchanges would imperil the tax subsidies: "Thus, they argue, if the Supreme Court guts subsidies, it would impose a “dramatic” hidden punishment on them and their residents for their decision not to set up an exchange, despite the fact that they had no clear warning of the consequences of that decision. This raises serious Constitutional concerns, and as a result, the states argue, the Supreme Court should opt for the interpretation of the statute that doesn’t raise those concerns — the government’s interpretation that subsidies are universal."

Linda Greenhouse, writing in her regular column for the New York Times about the U.S. Supreme Court, suggests that the latest challenge to Obamacare may also fail before the justices because they would have to upend traditional ways of interpreting federal statutes in order to find for the challengers. At issue is "the validity of the Internal Revenue Service rule that makes the tax subsidies available to those who qualify by virtue of their income, regardless of whether the federal government or a state set up the exchange on which the insurance was bought. The challengers’ argument that the rule is invalid depends on the significance of two sub-clauses of the act that refer to 'an exchange established by a state,' seemingly to the exclusion of the federally established exchanges." A coalition of Democratic and Republican attorneys general argued in a brief that, finding that tax subsidies are only available on state-run exchanges, would surprise states with "'a dramatic hidden consequence of their exchange election.”' There is much Supreme Court precedent that Congress must give "'clear notice'" to states of the consequences of their choices in federal law, Greenhouse said, and a narrow reading of the exchange language in Obamacare would undermine that.

The U.S. Supreme Court has taken up another existential challenge to Obamacare. The plaintiffs in King v. Burwell allege that the Affordable Care Act doesn't allow the federal government to provide tax credits and subsidies to low-income and moderate-income consumers shopping for insurance on the federally-run insurance exchange, The Huffington Post's Jeffrey Young reports. The Obama administration argues that Congress intended to provide tax credits to people shopping for health insurance whether an exchange is state-run or federally run, but the plaintiffs allege the Affordable Care Act only allows subsidies for insurance bought on an "'exchange established by the state,'" Young also reports.

If the Supreme Court rules in favor of the plaintiffs, "absent financial assistance, many fewer people would be able to afford coverage and likely would drop their insurance or never purchase it. Higher prices also would discourage healthy people who are cheaper to insure from buying policies, leaving a sicker pool of customers on insurers' books," Young further reports.

Oracle Corp. has asked legislative leaders to defund a lawsuit Oregon has brought over the failed health insurance website the company built for the state, the Associated Press reports. Oracle contends that the insurance portal Cover Oregon failed because of mismanagement by the state. The state is suing Oracle for false claims and other causes of action, while Oracle has sued for state for breach of contract and alleged violations of its copyrights, the AP further reports.

The U.S. Supreme Court is facing a circuit split on whether the federal government can provide tax subsidies to low-income workers to obtain health insurance on the federally-run insurance exchanges, SCOTUSBlog's Lyle Denniston reports. The U.S. Court of Appeals for the D.C. Circuit has said no (but the en banc court is going to hear the case in December). The Fourth Circuit has said yes. U.S. District Judge Ronald A. White, who sits in Oklahoma, added to the list of 'no' rulings yesterday.

According to the New York Times, White's ruling appears to increase the likelihood that the Supreme Court will resolve the issue. SCOTUSBlog's Denniston reports that White "relied on what he found to be the clear language of the ACA on that point — that is, subsidies are only to be available on an exchange 'established by the state.'  It was not his option, the judge said, to read the entire health care law to find reasons to make sure that the subsidy system worked in all exchanges across the country, federal and state."