CHARLOTTE, N.C. 鈥� Roughly half a million North Carolinians could soon lose money they depend on for health insurance. The U.S. Supreme Court will rule soon聽on a key part of the Affordable Care Act. It governs federal subsidies for insurance in states like North Carolina that did not set up their own exchange or marketplace. The result could be disastrous for many low-income Americans and for insurance markets in about three dozen states.
Harlena Harris pays about $20 a month for health insurance, but the subsidy to help her afford coverage is in jeopardy.
(Photo by Michael Tomsic/WFAE)
A few years ago, Harlena Harris lost her health insurance after she stopped working to care for her husband, who was battling lung cancer.
鈥淗e couldn鈥檛 even raise his hands or do anything for himself,鈥� she says. 鈥淚 had to feed him. I kept him clean. I did everything for him.鈥�
As he got better, her own health deteriorated. The 62-year-old has Type 2 diabetes and high blood pressure. Without insurance, she couldn鈥檛 afford her medications.
鈥淲hen I did get to go to the doctor, I was very, very, very ill,鈥� she said. 鈥淢y doctor told me that she didn鈥檛 know how I was still standing.鈥�
That doctor鈥檚 visit was the first thing Harris聽did after getting insurance on the Obamacare exchange in 2014. Since then, she鈥檚 been doing much better with the help of doctor鈥檚 visits and medication.
She can afford it because of a federal subsidy that leaves her paying about $20 a month for insurance. Across North Carolina, more than 90 percent of people insured through healthcare.gov receive a subsidy.
But the Supreme Court case has put those subsidies in jeopardy.
鈥淚 think there is a reasonable argument that the statute is ambiguous,鈥� said Neil Siegel, who teaches constitutional law at Duke University in Durham, N.C.
In one section of the Affordable Care Act, it reads that subsides are available through 鈥渁n exchange established by the state.鈥� But North Carolina and about three dozen other states decided not to establish an exchange. They use the federal healthcare.gov instead.
Siegel says here鈥檚 where it get complicated.
鈥淭here are other provisions of the law that don鈥檛 really make a lot of sense if the subsidy is invalidated,鈥� he says. 鈥淭here are reporting requirements that require federal exchanges to report on the subsidies that individuals are receiving.鈥�
Also, the whole point of the exchanges is to make it easier to buy health insurance.
Sara Collins is vice president of the research group The Commonwealth Fund. She said聽if the Supreme Court strikes down subsidies in states like North Carolina, 鈥渋t would likely completely eliminate the gains that we鈥檝e seen in insurance coverage over the past five years.鈥�
North Carolina ranked for the percentage of people eligible for ACA聽insurance who actually signed up. Across the state, would lose subsidies. Collins said that would make insurance unaffordable for most of them.
As they drop their coverage, Evan Saltzman of the RAND Corporation said聽premiums would go up considerably.聽鈥淲e estimated that premiums would go up 47 percent,鈥� he聽said.
That鈥檚 across states that use the federal exchange.
Here鈥檚 why: healthier people drop out of insurance pools first, then insurance companies raise premiums to cover the costs of the remaining, sicker customers, 鈥渨hich then leads to more people saying I don鈥檛 want to pay those premiums, and you can get sort of this spiraling effect or death spiral that leads to the collapse of the market,鈥� Saltzman said.
To be clear, that鈥檚 the individual market, which includes people buying from the exchanges or directly from an insurance company.
Most people get insurance through their jobs, and their premiums shouldn鈥檛 be affected, sayd聽anaylst聽Collins of Commonwealth.
鈥淭he employer market is pretty much walled off,鈥� she said.
Think of it as a separate pool. Insurance companies set premiums for each based on only the costs for that pool.聽The bottom line is this: for anyone not covered through work, Collins and Saltzman say health insurance could become exorbitant.
The decision could also have a large impact on hospitals.
鈥淚f suddenly a lot of people who are currently insured become uninsured again, that really leaves hospitals in the crosshairs,鈥� says Caroline Pearson of Avalere Health, a consulting firm.
The health law聽included payment cuts to hospitals since, in theory, more people would have insurance and therefore be able to pay for their care. Those cuts don鈥檛 go away if the Supreme Court strikes down the subsidies and insurance rates plummet.
Pearson said the result could be some hospitals with thin margins closing.
鈥淭hese are the providers of last resort, and they are often the only place that low-income uninsured people can go to get care 鈥� I mean, that鈥檚 why folks show up in those emergency departments,鈥� she said. 鈥淎nd so to put more fiscal strain on those providers is a very dangerous thing in terms of maintaining a safety net.鈥�
In Charlotte, Harlena Harris鈥檚 subsidy is nearly $700 a month. Without that, she says she couldn鈥檛 afford insurance.
鈥淒on鈥檛 just take it away and we鈥檙e setting here in limbo,鈥� she said, addressing state and federal officials. 鈥淗ave something ready to go in place.鈥�
by creating a state-supported exchange 鈥� basically, sticking with the healthcare.gov website while taking on more responsibility on the state level such as聽regulation and consumer assistance.
When asked about a backup plan for North Carolina, Governor Pat McCrory鈥檚 administration said聽that it is closely monitoring the case.
This story is part of a partnership that includes , and Kaiser Health News.