An Oba­macare warn­ing

Of­fi­cial: Strik­ing down sub­si­dies would be ‘a hor­ri­ble moral prece­dent’

Los Angeles Times - - BUSINESS BEAT - By Chad Ter­hune chad.ter­hune@la­times.com Twit­ter: @chadter­hune

The head of Cal­i­for­nia’s Oba­macare ex­change says the U.S. Supreme Court risks set­ting a “hor­ri­ble moral prece­dent” if it strikes down health-law sub­si­dies across much of the coun­try.

Peter Lee, ex­ec­u­tive direc­tor of Cov­ered Cal­i­for­nia and a for­mer Obama ad­min­is­tra­tion of­fi­cial, said a court rul­ing against the Af­ford­able Care Act “sig­nals that sub­si­dies don’t mat­ter.”

“I think it would set a hor­ri­ble moral prece­dent if the Supreme Court was to find that we can leave Amer­i­cans with­out that fi­nan­cial leg up,” Lee said in an in­ter­view. “I think it’s a fun­da­men­tal flaw to not un­der­stand how ev­ery Amer­i­can needs a leg up.”

A court rul­ing against the Obama ad­min­is­tra­tion in the King vs. Bur­well case would have no im­me­di­ate ef­fect on Cov­ered Cal­i­for­nia and its 1.2 mil­lion con­sumers re­ceiv­ing sub­si­dies be­cause it’s a state-run mar­ket­place.

The legal chal­lenge brought by con­ser­va­tive ac­tivists ar­gues that a strict read­ing of the health law makes sub­si­dies avail­able only in states such as Cal­i­for­nia that es­tab­lished their own ex­change.

That means jus­tices could elim­i­nate health in­sur­ance sub­si­dies in as many as 37 states that use the fed­eral Health­Care.gov mar­ket­place. A de­ci­sion is ex­pected later this month.

Michael Can­non, direc­tor of health pol­icy stud­ies at the Cato In­sti­tute, said Lee and other health-law al­lies have it all wrong in their legal anal­y­sis. “It would be immoral for the Supreme Court to let the pres­i­dent get away with break­ing the law,” Can­non said. “The pres­i­dent’s al­lies are pan­ick­ing be­cause they are afraid peo­ple will learn how much the Af­ford­able Care Act costs.”

Lee said he is con­cerned that an ad­verse court rul­ing could trig­ger re­vi­sions to the health law that would af­fect all state ex­changes and pos­si­bly re­duce the amount of fed­eral as­sis­tance avail­able to con­sumers.

Peo­ple can qual­ify for sub­si­dies if they make less than about $47,000 an­nu­ally for a sin­gle adult and $97,000 for a fam­ily of four.

“Any re­vi­sions to the Af­ford­able Care Act that back away from giv­ing folks the fi­nan­cial help they need is back­ing away from giv­ing peo­ple the care they need,” Lee said.

More than 1.3 mil­lion Cal­i­for­ni­ans are en­rolled in the state ex­change and nearly 90% re­ceive some level of fed­eral sub­sidy. About 120,000 en­rollees pay less than $10 a month af­ter ac­count­ing for that as­sis­tance.

Over­all, Cal­i­for­ni­ans re­ceived $3.2 bil­lion in pre­mium sub­si­dies dur­ing the roll­out of the in­sur­ance over­haul last year.

Gary Fried­man Los An­ge­les Times

COV­ERED Cal­i­for­nia chief Peter Lee, shown in Novem­ber, says a U.S. Supreme Court rul­ing against Oba­macare would sig­nal that “sub­si­dies don’t mat­ter.” Cal­i­for­ni­ans re­ceived $3.2 bil­lion in sub­si­dies last year.

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