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Washington — Millions of Americans, including more than 300,000 Michiganians, could pay more for health care coverage depending on how the U.S. Supreme Court rules in a case challenging the legality of federal subsidies for health premiums.

The High Court heard oral arguments Wednesday in the case King v. Burwell over whether the subsidies can only go to states that built their own insurance exchanges and not to the 34 states, including Michigan, where the federal government stepped in to run the exchanges.

The Obama administration maintains that Congress intended the subsidies to be available in all 50 states. The 4th U.S. Circuit Court of Appeals agreed, finding the subsidies are “essential” to fulfilling the primary goals of the 2010 Affordable Care Act.

But opponents say the plain language of the law makes clear the subsidies aren’t allowed in states without their own exchanges, noting the law’s creators were trying to create an incentive for states to avoid the federal exchange.

The conservative American Enterprise Institute’s Joel Zinburg argued in a Tuesday article that the disputed section of the law authorizes subsidies for enrollees “through an Exchange established by the State.”

U.S. Sen. Gary Peters, D-Bloomfield Township, said it’s “clear” the intent of Congress was to provide affordable care for all, and the High Court would be “hard pressed” to invalidate the subsidies.

“It would be extremely damaging,” Peters said.

Roughly 88 percent of the 340,900 consumers who have bought insurance through the Michigan Health Insurance Marketplace receive subsidies to lower their monthly premium, according to federal data. The average tax credit for Michigan consumers is $240 a month.

The Urban Institute estimates that the foregone premium tax credits in Michigan next year would amount to $905.8 million.

But Rep. Fred Upton, R-St. Joseph, co-wrote a Wall Street Journal opinion piece Monday with GOP Reps. Paul Ryan of Wisconsin and John Kline of Minnesota proposing an “off ramp” to the Affordable Care Act if the court strikes down the subsidies. Their plan would kill the mandate to buy health insurance but give consumers more control over alternative tax credits they could choose for coverage.

“No family should pay for this administration’s overreach,” they wrote in the Monday op-ed.

The Michigan Health & Hospital Association, which represents the state’s community hospitals, is concerned eliminating the subsidies would result in rising, unaffordable costs of coverage for those in the exchange.

“We are hopeful that the ultimate outcome — no matter the court’s decision — is that the 341,000 Michiganians who are enrolled today in private coverage through the exchange will be able to maintain that coverage,” said Ruthanne Sudderth, the association’s senior director for communications and strategic affairs.

Dizzy Warren, program director for Enroll Michigan, part of a national outreach campaign, said that without the tax credits, it’s unlikely affected consumers would qualify for other financial assistance or for Medicaid. “It would be a significant spiral downward for the whole health care community,” said Warren, whose program is affiliated with Michigan Consumers for Health Care.

Kathe Koja, a writer and producer who lives in the Detroit area, says she won’t be able to afford her health care premiums through the exchange if she loses her subsidy.

She traveled to Washington to demonstrate outside the high court with others affiliated with the nonprofit group Families USA.

“I hope the Supreme Court will be able to see this case is baloney,” she said Wednesday outside the Supreme Court building. “I don’t know what my other options would be.”

Highland Park resident Vanita Johnson said she went without insurance for about three years after she was laid off in 2010. She had worked as public safety officer for 40 years, last serving at Kettering High School in Detroit.

Now a security officer at the College of Creative Studies, Johnson has health insurance through the Healthcare.gov marketplace but wouldn’t be able to afford the unsubsidized premiums, which she estimates would be around $400 a month for herself and her 21-year-old daughter. Johnson currently pays $102 a month toward her coverage, she said.

“Being without insurance causes anxiety, which is not healthy,” said Johnson, who spoke to a crowd of demonstrators outside the court.

“What I don’t understand is you’ve given us something, and now you want to snatch it back?”

But anti-Obamacare protesters said they wanted the court to uphold the language of the law and not leave it to the arbitrary interpretation of the Internal Revenue Service. The Tea Party Patriots held signs reading, “I didn’t elect the IRS” and “IRS control makes me sick.”

“We’re here to uphold the rule of law,” said group member Diana Reimer of Lansdale, Pennsylvania.

“Congress is supposed to make the laws and not the administration.”

In a related case before a federal appeals court in Washington, Michigan Attorney General Bill Schuette last year signed on to a brief with counterparts in Kansas and Nebraska, arguing against the federal tax credits in states that opted not to set up an exchange. “Allowing the IRS to repurpose premium assistance tax credits — contrary to the plain text of the act and unequivocal purpose of the credits — deprives states of a choice Congress gave them,” according to the brief.

“We will not know the exact impact until the court rules, so it would be premature to speculate on any actions we may or may not take on this matter,” said Dave Murray, a spokesman for Gov. Rick Snyder.

For the states, it’s unclear what the options will be if the justices bar the subsidies, said Jennifer Tolbert, director of state health reform for the Kaiser Family Foundation. “The easy answer is that states will have option of creating their own marketplace,” Tolbert said. “It’s not clear how quickly that could be done, and in many states it would require action by not only the governor but the state Legislature.”

Michigan’s Republican-controlled Legislature rejected Snyder’s plan to create a Michigan exchange.

mburke@detroitnews.com

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