The Supreme Court’s decision on Friday to take up another ObamaCare challenge is the latest headache for a healthcare industry that has already struggled for years with complicated legal challenges to the law.
The court’s ruling in King v. Burwell threatens to dismantle a core provision of the healthcare law that provides subsidies for nearly 5 million people. While that decision won’t come until next spring, experts say that waiting period could throw ObamaCare in flux ahead of its second full year of implementation.
“I think it does create a cloud of uncertainty,” Elizabeth Carpenter, director of the healthcare consulting firm Avalere Health, told The Hill. “In some ways, stakeholders and key industry groups were beginning to kind of settle into some of the rhythms of the [Affordable Care Act], and certainly, this adds just another unknown variable.”
The court’s announcement came as a surprise to lawmakers who helped craft the law, many of whom dismissed the GOP-driven legal challenge as a partisan attack.
But veteran Supreme Court watcher Tom Goldstein said the administration should have expected the move – and should take it seriously.
“Supporters of the law have been too dismissive of the case. It is a very serious argument and it threatens a death blow to the statute in most parts of the country,” said Goldstein, who co-founded the widely read legal website, SCOTUS Blog.
Goldstein said many hold a “vision that ObamaCare’s legality is settled,” though there are many pieces of the law still up in the air, such as the employer mandate.
The Supreme Court’s announcement also raised new questions for healthcare experts who have already said the case could gut the core of ObamaCare. At least $36 billion in subsidies could be at stake, health researchers at the nonpartisan Robert Johnson Wood Foundation warned in July. Their report also said that as many as 7.4 million people could face a loss of subsidies by 2016.
Without subsidies, the law could be so damaged that it ceases to function, said healthcare economist Chrissy Eibner, who works for the nonprofit research group called RAND Corporation.
Eibner, who has conducted research for the Department of Health and Human Services, said the removal of subsidies would cause premiums to spike, causing enrollment to drop. That would likely create a cycle of increasing costs, forcing the government to rework the law entirely.
“We could have a situation here that the individual market is even less functional than before the [Affordable Care Act],” she said.
The decision also comes at a difficult timing for the Obama administration, which will launch its second year of enrollment on Nov. 15.
The White House released a statement Friday offering an assurance for people planning to sign up next week that “nothing has changed” and that “tax credits and affordable coverage remain available.”
Enroll America, a nonpartisan group dedicated to healthcare, also released a statement Friday that said customers should not be "dissuaded from signing up for coverage."
Still, Carpenter, the healthcare adviser, said the court’s decision “certainly could cause some confusion” around open enrollment.
“It causes confusion among people who work in healthcare day in and day out,” she said. While she believes a ruling against the subsidies would be unlikely, Carpenter said businesses “are going to have to take some kind of consideration” that it could happen.