Tag Archives: subsidies

Supreme Court Rules in Favor of Obama Administration

The Supreme Court ruled in favor of the Obama Administration in the controversial King vs. Burwell court case.  The 6-3 decision confirms that the Affordable Care Act allows for tax subsidies to flow through both state-based marketplaces as well as the federally organized health insurance exchange.  While the political implications are significant, this ruling should have little impact on business as usual.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

 

Estimated Cost of Affordable Care Act Reduced

The Congressional Budget Office on Monday again lowered its estimate of the cost of the Affordable Care Act, citing slow growth of health insurance premiums as a major factor.

Just since January, the budget office said, it has reduced its estimate of the 10-year cost of federal insurance subsidies by 20 percent, and its estimate of new Medicaid costs attributable to the law has come down by 8 percent.

Slower growth in health spending helps consumers and businesses, which shoulder most of the costs, and contributes to lower federal budget deficits.

The budget office now projects deficits totaling $7.2 trillion from 2016 to 2025, a decrease of 6 percent from the more than $7.6 trillion projected in January.

“The largest factor underlying that reduction is a downward revision in projected growth in premiums for private health insurance,” reflecting the fact that spending by private insurers in 2013 rose less than in preceding years and much less than expected, the budget office said in a new report.

The new estimates could help Democrats stave off Republican efforts to roll back the law. Even though millions of people have gained coverage, opinion polls show that unfavorable views of the law are still more common than favorable ones.

Josh Earnest, the White House press secretary, said the new estimates were “the latest in a long line of data points that indicate the Affordable Care Act is contributing in a very positive way to holding down the growth of health care costs.”

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Another Ruling on Subsidies by a Federal Judge

Though New York is unaffected, yet another ruling that affirms enrollees in the Federal Exchange cannot receive subsidies.

A federal judge in Oklahoma has ruled that Obamacare subsidies cannot go to residents of states that are not running their own insurance exchanges, a second blow to the Obama administration on a issue that threatens a key element of the health law’s coverage expansion.

Judge Ronald A. White said that the administration’s decision to allow subsidies to go through either a state-run health insurance exchange or the federal exchange is an improper and invalid reading of the Affordable Care Act and must be struck.

White’s ruling marks the second judgment against the government on the subsidy question and comes as the Supreme Court could decide whether to weigh in.

“The court holds that the IRS rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law,” White wrote in his ruling. The IRS had allowed people to get subsidies in all states.

Oklahoma Attorney General Scott Pruitt, who brought the lawsuit, welcomed the decision.

“Today’s ruling is a consequential victory for the rule of law,” he said in a statement. “The administration and its bureaucrats in the IRS handed out billions in illegal tax credits and subsidies and vastly expanded the reach of the health care law because they didn’t like the way Congress wrote the Affordable Care Act. That’s not how our system of government works.”

Split decisions in U.S. appeals courts came earlier this year. The 4th Circuit Court of Appeals in Richmond, Va., ruled with the Obama administration, saying the IRS had the right to allow the subsidies to go to residents of any state. The D.C. Court of Appeals ruled against that regulation but it recently vacated that decision when it decided to have the full court, not just a three judge panel, rehear the case.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary