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How Will The Health Care Subsidies Decision Affect Everyday Americans?

The Supreme Court is expected to rule on healthcare subsidies soon. As the country awaits the decision, NewsHour interviewed people who would be personally affected by the ruling, and Julie Rovner of Kaiser Health News answers their concerns.

GWEN IFILL: Before the month is out, the Supreme Court is expected to issue a decision that could determine the fate of much of the Affordable Care Act, often referred to as Obamacare.

That case, King vs. Burwell, will determine whether subsidies the government provides to purchase health insurance are legal. Nearly three dozen states use the federal exchange, and the case is whether subsidies used in those states are valid.

To illustrate some of the concerns at stake, we spoke to three people now receiving Affordable Care Act coverage about how the Supreme Court decision might change their lives.

JULIE HAMILTON, Resident of Virginia: My name is Julie Hamilton. I live in Richmond, Virginia. And I’m currently receiving a subsidy through the Affordable Care Act.

The subsidy is very important to me, because, about a year ago, I was diagnosed with mesothelioma, which is a very serious form of cancer and, in my case, affected my lungs. I had to see an expert at Duke University. And he prescribed treatment, which included chemotherapy and an operation to remove my left lung.

Since the treatment was prolonged, and I was sick during my chemotherapy, I was receiving short-term disability. But when that ran out, my company was forced to let me go. And I went on disability insurance.

I decided to keep my company’s insurance through COBRA, but I was having a hard time affording the premium. In November, I went to a workshop that explained the Affordable Care Act. And there were counselors there that helped me get signed up and choose a plan.

They also explained to me the subsidy that I qualified for. With my $498 subsidy, the premium comes down to $137 a month, which I can afford.

As I’m watching the Supreme Court as they’re making their decision, I’m feeling very anxious about losing my health care, because I will need follow-up care for the rest of my life.

MICHAEL KOLE, Resident of Detroit: My name is Michael Kole. I live here in Belleville, Michigan, which is a suburb of either Ann Arbor or Detroit, depending on how you look at it.

The ACA has affected me a negative way. My premiums have gone up from 300-some-odd dollars a month back in 2010, when the law was started, up to $850 a month now, for actually less insurance than I had previously. I had to make some tough decisions. And one of them was to close my office in Belleville here and move to my home office, saving about $4,000 or $5,000 in rent, insurance and utilities, so I could pay the additional premiums.

I don’t have the same choices of doctors that I used to have, can’t use the same labs for blood testing that I used to. I’m covered for things that I don’t need. And I’m paying almost $400 a month, or $5,000 a year.

The Supreme Court ruling that is coming out soon, what I’m hoping for that — out of that decision is that the Congress and the president actually sit down and negotiate a bipartisan fix for all of this.

VANITA JOHNSON, Resident of Michigan: My name is Vanita Johnson. I live in Highland Park, Michigan, along with my daughter, Candace Walker (ph). I’m a security officer at the College of Creative Studies in Detroit, Michigan.

And I receive subsidies from the Affordable Health Care. I worked for Detroit Public Schools for 10 years. And I had Blue Cross and Blue Shield, which my employer paid for. I had very — I had full coverage. I had very good health care insurance, not only for myself, but also for my children.

And as of July the 30th, 2010, my employment was terminated, and I lost all my health care insurance, not only for myself, but for my children also. I couldn’t afford the COBRA. So I had to go without insurance for three years.

It was devastating. I couldn’t go to the doctor. I needed medication to control my high blood pressure, my allergies and my acid reflux. And I couldn’t afford to go to the doctor.

When Affordable Health Care started, I signed up right away. I called the number. And they walked me all the way through it. I was able to go to the doctor on a regular basis. I was able to get my medication. I was also — and my daughter was able to have her surgery. She had this — they discovered a lump on her breast.

So she was able to get that done. So it was liberating, you know? It took a weight off of me. As I look at this, the King vs. Burwell and how it will affect me and my child, if they decide to stop the subsidies, I won’t have insurance. I will be back at step one, like I was back in 2010.

GWEN IFILL: Now joining us for a broader view of the stakes for millions of Americans is Julie Rovner, who covers this for Kaiser Health News.

So, Julie, start by telling us what those voices we just listened to are basically telling us.

JULIE ROVNER, Kaiser Health News: Well, they are representative of a couple of things.

One is that there have been winners and losers with the Affordable Care Act, and that if the Supreme Court were to strike down the subsidies in the states that are using, the federal exchange, there will be a different set of winners and losers. So it would definitely shake things up quite a lot.

GWEN IFILL: So we’re talking about three basic issues here, preexisting conditions, which, of course, is the part that the administration likes to talk about, subsidies, support for people who can’t otherwise afford to pay, and then the concern about the premiums, whether premiums are becoming too expensive.

JULIE ROVNER: That’s right.

I mean, this has always been sort of seen as a three-legged stool, as they say, that in order to allow people who have preexisting conditions to get coverage, you have to get a bigger pool. You have to get healthy people. In order to get healthy people, to be able to afford insurance, you have to give them the premium subsidies.

If you knock out any one of those, it makes the other two work not so well.

GWEN IFILL: Let’s talk — take a couple of additional questions those folks we just heard from. The first is Julie Hamilton. We just heard her talking about subsidies. Let’s hear her question.

JULIE HAMILTON: If the Supreme Court decides that subsidies can’t continue in states like Virginia, how soon will my subsidy end?

JULIE ROVNER: This is the source of a lot of debate. Generally, Supreme Court decisions take effect 25 days after they’re issued. That gives the losing party time to basically go back and ask them to reconsider.

There’s been a lot of talk about there has been a 90-day grace period for some people. But those are people with subsidies. So if you have a subsidy, then you get 90 days before they can end your insurance. In this case, though, these people won’t have subsidies anymore.

So most of them will only get whatever their state allows. That is normally 30 days. So, basically 30 days after you don’t pay your premium, which, for most people in this case would be August 1, then insurance companies would start to cancel policies. That would be September 1.

GWEN IFILL: We have an additional question from Michael Kole, the man who wasn’t so thrilled with the way this has been working.

MICHAEL KOLE: If the Supreme Court rules against the subsidies, when will the system balance out? Will it — will my premiums go down? Will somebody else’s premiums go up? Do you see an end to this, or will it create chaos?

JULIE ROVNER: Well, I think there’s pretty much a consensus that there would be chaos in the markets that would be affected by this. In the states that have their own exchanges, everything would pretty much go along as it is now.

But in states, including Mr. Kole’s state, there would be quite a mess. Most of the premiums would go up. I’m not sure anybody’s premiums would go down. What would happen is that people who could no longer afford insurance would mostly drop out. People who were sick and really need their insurance would stay in. So the group of people who are insured would be more expensive overall .

And so everybody who remains in that pool, their premiums would go up. It is hard to see whose premiums would go down in that situation. I think what people hope might happen is that Congress might get together with the president and work something out.

But even the Republicans by themselves haven’t been able to come to any consensus on what they should do if the Supreme Court acts for the challengers. The idea that they could get something they would agree on with President Obama, I think, everybody agrees may be a little farfetched.

GWEN IFILL: Vanita Johnson also had another question.

VANITA JOHNSON: Do the individual states have a plan if they decide to stop the subsidies?

JULIE ROVNER: Well, a couple of them do. But it’s not clear how quickly that could take effect.

There is a lot of uncertainty about whether states could just write a one-page letter to the federal government saying, we establish an exchange on paper, and we still want to use and we will lease it. There are those who say that if states try to do that, that they will go back and sue and they will say, no, that’s not right.

So there is a lot of uncertainty, there’s, of course, uncertainty about what exactly the court will do, what they will say, which states in particular will be affected, but generally nobody has a very good contingency plan.

GWEN IFILL: Well, that’s what I was going to ask you. She asked about the states. I’m curious about the federal government. We have all had conversations with the secretary of health and human services, and the one question she stopped short of saying, what is their plan B?

Any better indication of that?

JULIE ROVNER: No. And she’s been asked several times, including at a congressional hearing last week. The administration’s official line is, we don’t think the Supreme Court will rule for the challengers, so we don’t have a contingency plan.

It’s not clear whether that’s really the case. But, certainly, there’s not very much they could do legally in this situation. The only — It would really be up to Congress to fix it. Congress could fix it with a one-line bill, but nobody thinks they’re going to. So the question is what Congress will then do.

But it will be, I think, more in Congress’ court than it will be in the administration and the states.

GWEN IFILL: Once again, how many people are we talking about affected by this outcome?

JULIE ROVNER: Well, we’re talking about 6.5 million people in those states that could be affected who have subsidies. The Urban Institute said that there is another million-and-a-half people or so who could be affected indirectly, because they have their own insurance in those states whose premiums could spike.

GWEN IFILL: Huge consequences at the end of the Supreme Court term, as always.

Julie Rovner, thank you for helping us explain it.

JULIE ROVNER: Thank you.

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