King v. Burwell: What If?

Now that King v. Burwell Week has arrived, stakeholders are speaking out about what could happen if the Supreme Court rules to terminate subsidies for residents of the 34 states that have federally run health insurance marketplaces. The broad impact has been well documented. Without subsidies – which reduce premium costs by as much as 89% for some Americans – some 7 to 8 million HealthCare.gov enrollees are at risk of losing coverage. Polls suggest that the public is in support of maintaining the subsidies. The Washington Post reported on a poll conducted by Independent Women’s Voice, an organization committed to challenging the Affordable Care Act (ACA), that found that in HealthCare.gov states 75% of respondents think it is very or somewhat important to restore subsidies if the Court rules to shut them down, and 62% of Republican respondents said it is very or somewhat important. HHS Secretary Burwell wrote a letter to lawmakers saying that HHS does not have a back-up plan to “undo the massive damage” that would ensue if HealthCare.gov subsidies are shut down. Even opponents of the ACA are starting to contemplate a back-up plan. In a Washington Post opinion column, Republican Senators Lamar Alexander (R-TN), Orrin Hatch (R-UT) and John Barrasso (R-WY) wrote that congressional Republicans will provide “financial assistance to help Americans keep the coverage they picked for a transitional period,” but details remain vague. Republican Congressmen John Kline (R-MN), Paul Ryan (R-WI), and Fred Upton (R-MI) followed with a column in The Wall Street Journal telling readers that House Republicans have formed a working group to “propose a way out for the affected states if the court rules against the administration.” The extent to which a ruling against the legality of the subsidies impacts consumers may be in states’ hands. Affected states are largely Republican-led, and The Washington Post reports that at least 6 Republican-led states may revisit their decision to forgo State-based Marketplaces. SCOTUS will likely issue its ruling in June.

IRS Will Not Require Taxpayers to Submit Amended Returns—And Will Forgive Underpayments—As a Result of HealthCare.gov Tax Form Error

The IRS is not requiring those consumers who were enrolled through the Federal Marketplace in 2014 and received 1095A tax forms with incorrect information to amend their federal income tax return if they had already filed. While some tax filers would have owed money back to the Federal government, some would have received a refund. Consumers will not receive the refund, if one is due, unless they decide to file an amended return. The Treasury Department stated that a tax filer is likely to benefit from refiling if the 2015 premium for their benchmark plan is less than the 2014 premium listed on the updated form.

More than Half of Consumers “Auto-Renewing” Actively Shopped for New Plans on Federal Marketplace

HHS announced that of the 4.2 million Federally-facilitated Marketplace enrollees who were automatically re-enrolled in the same, or a similar, plan for 2015 coverage as they had in 2014, 2.2 million returned to the Marketplace to update their information for 2015, and more than half of those who returned switched plans for 2015 coverage. Andrew Slavitt, the agency’s Acting Administrator, stated that the numbers reflect a Marketplace in which customers are more actively engaged in choosing health coverage compared to typical consumers with employer-sponsored coverage or Medicare. In total, 8.8 million people enrolled in coverage on HealthCare.gov between November 15 and February 22. In addition, after final processing of consumers’ citizenship/immigration status information, HHS reduced the estimate of the number of people who will lose coverage at the end of February due to unverified citizenship/immigration status issues from 200,000 to 90,000.

Report Finds U.S. Health System Can Absorb Increases in Use of Healthcare Services

Increases in the use of healthcare services by those newly insured through the Affordable Care Act (ACA) will not lead to strain on the service delivery system, according to a Commonwealth Fund report. The analysis demonstrates that utilization rates vary significantly across states; 7 states are expected to experience an increase in primary care visits that exceeds 5% while 17 states are expected to experience an increase that exceeds 4%, while the U.S. average increase is 3.8%. Overall, the report projects roughly 20.3 million additional primary care visits nationally, with the newly insured accounting for more than a third of these visits. For states experiencing large increases in use of healthcare services, the report recommends changes to the delivery system structure and increasing use of telemedicine.