More than 400,000 in NC Keep Obamacare Subsidies

The U.S. Supreme Court has upheld the tax breaks for those who purchased health insurance through the federally-run exchange. The ruling allows more than 400,000 North Carolina residents to keep subsidies that help pay for their health insurance premiums.

The question at hand in King v. Burwell was whether a small line of text in the Affordable Care Act (ACA) prohibited the federal government from providing subsidies for health insurance to people in states without their own exchanges. North Carolina is among 34 such states. Duke University professor Don Taylor says more than half-a-million North Carolina residents purchased insurance through the ACA, and most of them are receiving the federal subsidies that were in question.

“Ninety-one percent of the North Carolinians have gotten a subsidy, and the average amount of that subsidy is about $315 a month,” Taylor said.

The Supreme Court ruled 6-3 to allow the federal subsidies to flow to all states, whether their exchange is state-run or not. Chief Justice Roberts, who ruled with the majority, said the line in question had to be read within the greater context of the ACA, which was to “improve health insurance markets.”

North Carolina Congressman David Price says he is relieved by the Court’s ruling on what he calls a “drafting error” in the ACA.

“It’s a very fortunate decision; it’s a common sense decision,” Price said. “And from what I’ve seen, Chief Justice Roberts’ reasoning in ruling this way reflects that. This is a matter of discerning Congress’ intent, despite this drafting error, and making sure that the nation doesn’t suffer the consequences of an overly literal focus on this one omission in the law.”

The ruling means more than 400,000 North Carolinians will keep their subsidies. It also puts an end to a serious threat to the future of Obamacare. Taylor says ending the federal subsidies would have forced many people to drop coverage and destabilized the entire health insurance exchange.

“If the healthy people flow out because the premiums go up, and you only have sick people left, then that’s called ‘death-spiral,’ and that insurance market is unsustainable,” Taylor said.

Now that the ACA is no longer threatened, Price says it’s important to shift focus to expanding Medicaid in the state. The U.S. Supreme Court’s 2012 ruling on the ACA allowed states to opt out of Medicaid expansion.

“It’s unfortunate that the Supreme Court left that loophole,” Price said. “It’s even more unfortunate, I think, that North Carolina and other states are taking advantage of the loophole to detriment of – in the case of our state – almost half-a-million people.”

Governor Pat McCrory has given no indication that he will call for Medicaid expansion. In a statement his office released Thursday, the Governor said quote “we must build a North Carolina-based reform plan that focuses on healthier patients at a cost taxpayers can afford.”