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A split decision by two U.S. appeals courts yesterday affecting the treatment of subsidies for individual insurance policyholders under the Affordable Care Act (ACA) could have a dampening effect on participation by the public and insurance companies in the near future, according to Wharton health care management professor Scott Harrington.
The opposing decisions revolve around ACA guidelines, which provide sliding-scale subsidies for mostly low-middle and middle income people. (The poorest Americans are eligible for Medicare.) The subsidies allow those groups to buy health coverage for under $100 per month in most cases. Participants sign on through exchanges set up either by individual states or by the federal government. Some states participate in ACA programs via the federal government’s exchange, bypassing the option of having an individual state exchange. One appeals court ruling found that model is not allowed, given the way the laws were written. The result, if upheld, would be to yank subsidies from programs in states that process policies through the federal government channels. That could affect millions of current policyholders.
Meanwhile, there is no assurance that the Supreme Court will take up the case, and it would be very difficult to predict the top Court’s decision if it does, Harrington adds. In an interview with Knowledge@Wharton, Harrington talks about what the rulings will mean for consumers and insurance companies in the interim before any final rulings are reached.
An edited transcript of the conversation will be posted shortly.