Supreme Court’s Health Insurance Ruling Could Upend Several States’ Budgets

The Supreme Court is expected to issue its ruling on the nation’s Health Insurance subsidies and whether or not the federal government can continue funding them either later today or early next week. After months of waiting, it’s a safe bet that people on both sides of the aisle are waiting with bated breath to see just what will happen to President Obama’s signature health insurance plan once this ruling comes down.

For the White House and Democrats, the ideal situation would be that the ruling will keep everything in place and nothing will change. Some in the pessimistic camp among that group wonders why the Supreme Court would take up King v. Burwell , the case that deals with state-based health insurance subsidies, if they were planning to leave everything as is. Others, still trying to be optimistic, have posited that the Supreme Court is just looking to end the legal challenges once and for all.

If the ruling goes the other way, and determines that the federal government cannot issue subsidies to pay for health insurance in 34 different states, it will have far reaching effects that could cut the Affordable Care Act off at the knees. Republicans have been looking for an alternative health insurance plan since President Obama got his landmark legislation passed. Because they haven’t come up with that alternative health insurance plan, the Supreme Court ruling could upend a number of different states’ health insurance plans, and in that process, quite a few budgets.

At the crux of the issue is a statement in the law that states the people get health insurance through “an Exchange established by the State.” The people who brought the suit claim this means that only exchanges that were established by the state can survive, rather than those funded by the federal government. The 34 states refers to those that do not have their own exchanges and could very well lose the federally- subsidized plans if the court rules the clause is unconstitutional. KPHO reports that one of the states that could be massively affected by the Supreme Court’s ruling is Arizona, which could lose more than $20 million in subsidies.

Arizona is far from the only state set to lose significant monies should the Supreme Court rule against the Obama administration. Around the country there are 6.4 million people who could lost their tax credits. That, in turn, means that those people will be paying more for their healthcare. The total loss is expected to top more than $1.7 billion when all is said and done. If the Supreme Court does what some think it will do, out-of-pocket premiums could go up as much as 256 percent. There are some states where the premiums will go up much more than that. This is why people who support the Obama administration’s health insurance plan are more than a little nervous that the ruling will go the wrong way.