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Sarah Varney, Kaiser Health News
Sarah Varney, Kaiser Health News
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In the coming days, the Supreme Court will weigh whether states that rely on the federal health care exchange can provide subsidies to make insurance affordable. Special correspondent Sarah Varney of Kaiser Health News reports on how millions will be affected if the Court wipes out financial help in 34 states.
On Wednesday, the court will hear oral arguments in a case that goes to the heart of the Affordable Care Act.
At issue is whether the law bars the federal government from subsidizing health plans in the 34 states that rely on the federal health insurance exchange. The health care coverage of more than eight million people rides on that decision.
Special correspondent Sarah Varney begins our report in North Carolina.
This story was produced in collaboration with Kaiser Health News.
SARAH VARNEY, Kaiser Health News:
It's been a bitterly cold winter in the Blue Ridge Mountains for Julia Raye and her 13-year-old son, Charles.
Did you drink your coffee, already?
But, despite the punishing weather, 2015 is looking good. Raye has finally been able to afford the insulin and other medications she needs to keep her diabetes under control.
She's a self-employed auditor who relies on a $400-a-month government subsidy to afford the private health plan she bought on healthcare.gov. Before the Affordable Care Act made tax credits available to low- and moderate-income workers, Raye was uninsured. Back then, just one of her diabetes medications cost $320.
During that time, I had no insurance, and I really just wasn't taking my medicine. And there were times when my sugars and things would get up to 600. And I remember getting to a point where the ambulance had to come take me in because I was pretty much in the diabetic shock kind of situation.
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Since January 2014, Raye has had steady insurance, paying just $30 a month, while her son was covered by Medicaid. Treating her diabetes has improved her vision and the numbness in her feet. At age 48, she has finally gotten a mammogram.
Raye says she is watching the latest legal challenge to the Affordable Care Act with growing anxiety.
In North Carolina, nine out of 10 people who buy health insurance on the federal exchange receive a subsidy. If large numbers of them lose those subsidies and drop their health insurance, health policy researchers say insurance markets in places like North Carolina will fall into disarray.
As a snowstorm bore down on the campus of Duke University, Donald Taylor, an associate professor of public policy, considered what would happen in North Carolina if the court struck down the subsidies.
DON TAYLOR, Duke University:
If you imagine someone who is paying $100 a month and, all of a sudden, it's $415 a month, which would be the average impact, then you can imagine some people are going to stop paying.
Further, you would imagine the ones that wouldn't stop paying would be the people who are the sickest, who need the insurance the most. And when you only have the sick people enrolled, that's what you — that's when you have what's called death spiral.
That would likely happen across the country, say health care economists. In 34 states, the insurance marketplaces are entirely run by the federal government, because state lawmakers opted not to set up their own. If the court wipes out financial help for those shoppers, the number of uninsured is expected to rise by 44 percent.
The fallout would be heavily concentrated in the South. Estimates show that of those who could become uninsured, 62 percent live in Southern states and 61 percent are white.
The Supreme Court last considered the Affordable Care Act three years ago in a case over the law's constitutionality. Court watchers say the fact that the justices agreed to hear this case, which many legal scholars considered a trivial statutory flaw, shows a renewed interest by the court's conservatives to upend the health law.
The lawsuit stems from a group of conservatives including Michael Cannon, the director of health policy studies at the Cato Institute. Cannon and others who dissected the law after its passage noticed a six-word phrase that said financial assistance would be available to those who bought health plans through — quote — "an exchange established by the state."
MICHAEL CANNON, Cato Institute:
What this case is about is about the latest and most dangerous in a long line of false promises that the president has made about Obamacare. And this is not just a false promise. It's also an illegal one.
The Internal Revenue Service concluded Congress never intended to limit subsidies to shoppers only in state exchanges, and issued a rule making them available in all states.
With a colleague, I blew the whistle on this. And we complained the administration had no authority to do this. We began doing the legal research. We found out this was actually an intentional feature of the law that the president was trying to rewrite.
REP. SANDER LEVIN, (D) Michigan: Oh, they're just totally wrong. I think the letter of the law, when you read the entire law, says that these credits were to be available to everybody, whatever exchange they were in.
Congressman Sandy Levin is a Democrat from Michigan who chaired the Ways and Means Committee during passage of the health law. He says there was never a debate about restricting the subsidies.
REP. SANDER LEVIN:
Even those who objected to the law never raised that. Look, what the opponents are trying to do is to look for any hook they can find. And the court shouldn't allow them to find a hook that isn't in existence that would tear apart the entire law.
In Raleigh, North Carolina, that is exactly what Anna Beavon Gravely hopes will happen. Gravely is a community activist at North Carolina Family Action, a conservative political group. Now 26 years old, she's had to buy insurance on her own for the first time this year, and was shocked by the cost.
ANNA BEAVON GRAVELY:
I don't really see the return on it. It's one thing to have — pay monthly for cable or for Netflix or Hulu Plus or a gym membership because you're getting something out of that. I feel like I'm not really getting anything out of my virtually $200 a month.
This is power from last month's, and then this is this month's, and working to get them down in cost to be able to pay for some of the things that we really care about.
Gravely says she rarely visits a doctor and doesn't want the added benefits that the law requires insurers to offer, like mental health and maternity coverage. She hopes the Supreme Court declares North Carolinians ineligible for financial assistance.
I think that that will help a lot of people understand the true cost of health care and what this does — how it's driving up costs, it's increasing the burden on middle-class families, on individuals like me, who just want to have a plan that fits them and where they are in their life.
I would be in poor shape to take care of my son.
More than four hours west in the Blue Ridge Mountains, Julia Raye says health insurance was plenty expensive before the health law and preexisting conditions like her diabetes weren't covered.
I want to be able to go out and buy insurance and to have insurance at a workplace. And I try to do so. But when they come back with figures like $800 a month, that is not logical. It's half of what I bring in. I need the subsidy. This is what makes me be able to subsist. And there's just no way I could function without it.
After the court hears oral arguments on Wednesday, a decision is expected by the end of June.
For the PBS NewsHour, I'm Sarah Varney in Burnsville, North Carolina.
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Jason Kane is a PBS NewsHour producer, focusing on health care and national affairs.
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