Study: Insurers to lose $1 trillion if health law struck down

Nearly one-tenth of the insurance industry's total revenue through 2020 is at stake in the Supreme Court's decision on healthcare reform, a new study by Bloomberg Government says.

That figure equals about $1 trillion, or about one-half percent of the projected U.S. gross domestic product over eight years, the report said.

"It’s a confirmation of, one, how much money we’re spending as a nation on healthcare, and two, how much is riding on this court case and the Supreme Court’s decision," Matt Barry, the study’s author, told Bloomberg.

"You’re talking [about] an amount of money here that can affect the economy, not just an industry," he said.

The $1 trillion in new revenue would come from the law's expansion of Medicaid and from subsidies to individuals purchasing insurance. 

Though most of the money would eventually flow to healthcare providers, insurers would keep an average of $22 billion per year for profit and administrative costs, the study said.

The Supreme Court is expected to issue its decision on healthcare reform before the end of June. If upheld, the law is projected to expand insurance coverage to 32 million people by 2016.

The study estimated that through 2020, the Medicaid expansion will cost $669 billion, and the private insurance subsidies $557 billion. The two represent about 98 percent of the law's total costs, it said.