By Rose Hoban

With a decision in favor of the federal government Thursday morning, the Supreme Court will allow hundreds of thousands of North Carolinians to keep the subsidies that allow them to afford health insurance.

Health care advocates, insurers and consumers breathed a sigh of relief that a clear majority of justices ruled against a challenge to the legality of subsidies for people who buy insurance on the federal online exchanges in states, such as North Carolina, that have not created their own state-based exchange.

A proponent of the Affordable Care Act celebrates in front of the US Supreme Court on Thursday morning. Photo credit: Virginia Pickering, flickr creative commons
A proponent of the Affordable Care Act celebrates in front of the U.S. Supreme Court on Thursday morning. Photo courtesy Virginia Pickering, flickr creative commons

“In a sensible legal world, this challenge never would have been taken seriously,” said Carrboro-based Sarah Somers, who works for the National Health Law Program.

“It was so clear when you read the statute that the intention was that everybody, regardless of what kind of exchange they were on, would be entitled to subsidies.”

Opponents of the law had argued that a four-word phrase, “established by the State,” nullified the subsidies for people who purchased insurance on the federal website.

“When there’s this kind of dispute of what the law means, inconsistencies such as this, they’re often addressed in conference,” Somers explained. “But Congress is so polarized, and this was such a fraught process, they didn’t have the opportunity to do that.”

That’s what members of Congress also argued in an amicus brief filed with the Supreme Court that called the plaintiff’s argument “weak.”

“[We] submit this brief to demonstrate that the purpose attributed to the statute by Petitioners was, in fact, never contemplated by the legislators who enacted the law,” the Congressional brief read, “nor by the state officials charged with deciding whether or not to establish their own Exchanges.”

A statement from Blue Cross and Blue Shield of North Carolina cited how the “uncertainty of this Supreme Court decision [is] behind us,” and state Insurance Commissioner Wayne Goodwin wrote in a press release that he was “relieved” at the ruling.

“If the court had ruled that North Carolinians are ineligible for subsidies … there would have been chaos in our market,” Goodwin wrote.

No expansion

On the ground in North Carolina, where 458,000 people receive tax credits to purchase insurance, little will change with respect to the law, said Sorien Schmidt, who heads Enroll America North Carolina, a group dedicated to getting consumers signed up for insurance.

Click on a county to see a rough estimate of how many previously uninsured consumers have bought insurance on the federal exchange. Data courtesy the N.C. Institute of Medicine (2011 data) and the U.S. Department of Health and Human Services

“There will be no stopping our efforts and we’ll be continuing to get the word out that financial subsidies are available,” Schmidt said. “We’ll continue helping people apply for tax credits.”

About 93 percent of the 497,000 North Carolinians who are signed up for insurance on the exchange and paid their premiums qualified for the tax credits, which are available for people who earn between 100 and 400 percent of the federal poverty level.

In North Carolina, that subsidy averaged about $317; nationally, subsidies averaged about $268.

“We have really worked hard to target people who need financial assistance to afford health care,” Schmidt said. “And far more of our people who enrolled were eligible for subsidies.”

Nationally, about 85 percent of enrollees were eligible for the subsidies.

[pullquote_right]Like what you read on NC Health News? Help make it possible. Make a donation today. As little as $10/ month will help keep us going![/pullquote_right]Those earning too much to qualify for Medicaid and too little to qualify for financial help will continue to be left out of the insurance pool because North Carolina remains one of 20 states that have not chosen to expand Medicaid, as allowed for under the law.

That loophole affects between 320,000 and 500,000 North Carolina consumers.

Lawmakers in Raleigh confirmed that they are in no hurry to expand Medicaid to cover more consumers. Gov. Pat McCrory said in a press release that North Carolina needed to focus on reforming Medicaid.

When asked about the possibility of Medicaid expansion in the wake of the decision, Sen. Ralph Hise (R-Spruce Pine) shook his head, indicating “no.” Hise co-chairs the Senate Health Care and Senate Health and Human Services Appropriations committees.

He’s argued that the program first needs to be reformed. But what that reform will look like continues to be a point of contention between members of the House and the Senate.

“I don’t think it will affect North Carolina,” Rep. Nelson Dollar (R-Cary) said of the Supreme Court’s decision. Dollar has been spearheading the House’s Medicaid reform plan.

“Today’s Supreme Court ruling is disappointing, but does not change the fact that this flawed policy is doing more harm than good for our State,” wrote House Speaker Tim Moore (R-Kings Mountain) in a press release.

In conversations with reporters, Moore quickly dismissed the possibility of expanding Medicaid.

Federal or state?

Initially, North Carolina was going to create its own exchange, but legislative lawmakers said no. Then the state was going to partner with the federal government, with the feds running the website while the state Department of Insurance handled consumer issues.

But in 2013, the new Republican majority in the General Assembly put an abrupt stop to any planning around the exchange.

After the problematic rollout of both the state and federal exchanges in October 2013, several states reversed course and signed onto the federal website.

Larry Levitt, senior vice president of the Kaiser Family Foundation, said that with this decision more states are likely to move onto the federal exchange.

“This will remove a major incentive for states to set up their own exchanges,” he said.

“The IT aspect of running an exchange has proved to be very difficult. And while isn’t perfect, it’s running pretty good at this point,” Levitt said.

“I think the bar will now be very high for states set up their own exchanges.”

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