Winners and Losers from King v. Burwell

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This week’s health policy news roundup curated by Jane Orient, M.D.

New entitlements tend to last forever because of the political uproar when government takes something away. If the U.S. Supreme Court decides, in King v. Burwell, that the government has to follow the words of the Affordable Care Act (ACA) and provide subsidies only through state-established exchanges, 7.7 million would lose their health insurance subsidy, of average value $3,156 annually.

The public does not pay attention to the Forgotten Man of Amity Shlaes http://www.amityshlaes.com/ –the taxpayer or the creditor who may never be repaid.

But if King v. Burwell plaintiffs win, there will be 11.1 million visible winners, who will be freed from the individual mandate and the average $1,200 annual penalty, which will increase in later years.

Most subsidized individuals will still be able to get insurance. They will be able to enroll in lower-cost catastrophic policies, without the individual mandate penalty.

Voiding the employer mandate would likely result in 237,000 new jobs, 1.2 million workers added to the labor force, 3.3 million part-time workers gaining hours, and an average pay increase of $830 to $940 per worker, according to an analysis by Brittany La Couture and Douglas Holtz-Eakin. http://americanactionforum.org/research/taking-stock-the-potential-impact-of-king-v.-burwell

Victory for the plaintiffs would clearly achieve the greatest good for the greatest number, as well as upholding the principle that the law means what it says, not what some want it to mean.

Congress might simply amend the law to apply subsidies to federal exchanges, but John Graham suggests a better way if Congress must “do something.” His proposal includes subsidizing individuals rather than insurance companies and rescaling the subsidies so that they do not punish work. http://www.forbes.com/sites/theapothecary/2015/03/05/obamacare-versus-the-affordable-care-act/

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