Across the country, 87% of the 5 million people who bought coverage on the exchanges this year received an average subsidy of 76% of their total premiums, according to Avalere Health. States that relied on the federal exchanges—often where employers are less likely to provide coverage and wages are lower—require the greatest subsidies. People who bought insurance in Mississippi, for instance, received on average a 94% subsidy.
One can easily imagine the ads that will run in those states: Harry and Louise (last seen in the early 1990s in anti-reform ads sponsored, ironically, by the insurance industry) fretting at their kitchen table about whether to buy that $10,000-a-year bronze plan. The deep-voiced narrator intones, “When you're responsible for the full cost of that plan, how will you afford $10,000?”
Fear tactics such as that are basically all that reform opponents have left. They're not likely to work.
After a rocky rollout last fall, the exchanges were fairly successful at expanding coverage this year. The tradeoffs between affordability and network breadth were acceptable to the cost-conscious clientele using the public exchanges.
With the technological glitches a thing of the past, and major insurers such as UnitedHealth jumping into what has become a viable market, the best guess by most analysts is that the nation will see another major expansion of insurance coverage this fall and winter. That outcome would be warmly welcomed by most hospitals, doctors and insurers.
But the long-term fate of the subsidies is a separate question. One should never predict what the courts will do, especially the Supreme Court under Chief Justice John Roberts. Recall that liberal justices Elena Kagan and Stephen Breyer joined the conservative majority in NFIB v. Sebelius to give states the option of forgoing Medicaid expansion. At the time, many court watchers thought they did so to persuade Roberts to join the four liberals on the court in upholding the rest of the law.
The impact of a negative ruling on the validity of insurance subsidies on federally run exchanges would be far greater than limiting Medicaid expansion. Millions of people would drop coverage without subsidies. Will Roberts use Halbig and the arguments of the strict constructionists to go where he wouldn't in NFIB?
There can be no question about the intent of the Democrat-controlled Congress that passed the law. It was a shift in the political landscape that prevented Congress from correcting its language. Given the precedent set in the NFIB case, Roberts' course in Halbig should be clear.
But in an era of politicized courts and legal horse-trading, anything is possible. That will be especially true after November's mid-term elections, where low turnout and a favorable electoral map may give anti-reform politicians and pundits the opportunity to conclude that the nation has turned against reform (ignoring the fact that the 54% who tell pollsters they oppose reform includes a rump 15% on the left who oppose it because it didn't go far enough).
A lot has to happen before that unfavorable outcome becomes reality. For the time being, the subsidies will continue to flow.
The best way to ensure that the high court doesn't feel empowered to undermine this central aspect of the law is to have a second successful sign-up season. That requires a delicate balancing act by insurers and providers.
Insurers, when setting next year's rates, should think more about their long-term opportunities than their short-term fears about excess utilization that hasn't yet materialized. And insurers and providers need to work together to create networks whose adequacy hasn't been sacrificed in the name of affordability.
Follow Merrill Goozner on Twitter: @MHgoozner