Stephanie Armour l May 25, 2015
Subsidies that made insurance plans affordable face a crucial test with decision expected in June.
After the Affordable Care Act kicked in, Michael Kole’s monthly health-insurance premium to cover himself and his family grew to $848 from $513. Like others, he wasn’t happy about it. “It’s taking a lot out of pocket,” he said.
The 52-year-old sales and marketing entrepreneur is one of millions of Americans who earn too much to qualify for government subsidies on policies purchased through the federal insurance exchange. To save money, he said, he now works from home instead of renting an office.
Many people are paying more, and the reasons are simple: The health law requires that policies offer broad coverage and greater protection against catastrophic medical costs—and everybody is supposed to be covered. Others, thanks to government subsidies, are paying less.
But a coming decision by the Supreme Court may greatly complicate matters. The court is expected by the end of June to rule on a lawsuit seeking to invalidate subsidies to more than 7.5 million people who bought plans on the federal exchange.
If the court upholds the lawsuit, those people will land in the same boat as their more well-heeled compatriots. People with individual coverage in 2010 and 2012 who bought silver and bronze plans on the exchange after the law took effect saw total premiums and out-of-pocket payments rise an estimated 14% to 28%, according to a study last year by the National Bureau of Economic Research.
Source: Wall Street Journal