Category: Obama Care

The Obamacare Lawsuit & What it Means for You

When Obamacare was in the drafting stage, nobody could have guessed that a few choice words would make such a difference a year into the program. That’s what’s taking place now, with a massive Obamacare lawsuit hitting the courts in 2015, with major players on both sides of the party lines drawing their guns and firing at each other in the name of courting the American people for the next vote.

The case is called “King v Burwell” and could very possibly overturn the Affordable Care Act. It’s set to go up before the Supreme Court very soon. Let’s see what all the fuss about in this crucial matter that really affects us all.

The Phrase That Started it All…

Legislation initiating the Affordable Care Act (aka “Obamacare”) calls up on each state to create a medical insurance marketplace. These are to be central online websites for each state, run by the state, where those living in that state could find out about and register for health insurance.

The insurance of course is to be cheaper (for families) and more inclusive of things like pre-existing conditions and as far as coverage goes, these plans are required to cover more services, especially preventative services like annual exams.

The marketplaces, or “exchanges”, as they’re called are for people who don’t have access to medical insurance coverage through their jobs. The added benefit for these plans is that if income meets low threshold requirements, those paying for them also get a tax credit.

If any state were to fail to set up its own exchange, no problem…the Federal marketplace is there for anyone living in a state with no exchange of its own.

So far, so good- everything has gone as planned as far as these primary elements go. Now, the phrase in question in the ensuing lawsuit concerns doubt over who gets those tax credits. According to the verbiage in the Affordable Care Act, the federal subsidies (tax credits) are for people who purchased insurance through….

“…an exchange established by the State”

Is that meant to mean that people who didn’t purchase insurance through an exchange established by the State won’t get the Federal subsidies? In other words, if your state didn’t create an insurance exchange and you purchased your through the Federal exchange, will you be denied the tax credit?

Why Would It Be Written in Such a Vague Way?

The Obamacare lawsuit says yes, that’s what the language is intended to mean. Furthermore, they claim that the Affordable Care Act was intentionally written that way. Why?

Because it’s a veiled threat to states who planned on not providing their inhabitants a state exchange. Plaintiffs are claiming the vague language was meant as a threat to states along these lines…

“establish your state exchange or else your people won’t get the Federal subsidies”

If the case goes through and they win, it means millions of people will lose their federal subsidies…and become uninsured in the process. This would destabilize the insurance market altogether, and cause a ripple effect of “very bad things” to happen. I found a blog with a very frightening tale of what this ripple effect could look like here.