With SCOTUS out of the way, time to rethink State Exchanges
When the Affordable Care Act (Obamacare) was enacted, each state had the option to create and manage their own health insurance exchanges, or use the government platform (healthcare.gov). More than three dozen states chose to use healthcare.gov.
Through healthcare.gov, 85% of customers qualified for subsidies to help pay for coverage. These subsidies were recently challenged in the Supreme Court case King v. Burwell. The ACA language stated that the IRS could award subsidies to people buying insurance on “an exchange established by the State.”
The plaintiffs argued that the 37 states that used the federal infrastructure shouldn’t be allowed to provide subsidies, which had already been granted to about 6.5 million Americans. Last week, the Supreme Court ruled 6-3 in favor of keeping health care subsidies for the Americans in the states that didn’t establish their own health insurance exchanges.
This is a win for Americans who could only afford health insurance with subsidies – it avoids the potential calamity of all 6.5 million subsidy recipients suddenly having to drop their plans, and it demonstrates that the ACA is here to stay.
We've seen many, if not most, states struggle to financially support their own exchanges (Hawaii even closed down its exchange, for example), and for such states this ruling is a lifeline. But it's also an opportunity to examine how much of the technology and consumer experience that drives an exchange should be run by government entities. There are private companies willing to solve the meatier (more costly) challenges that still exist, and software that can help consumers makes smarter health insurance decisions.
This ruling gives us a shot to come together, as a country, and build atop a federal platform to empower more intelligent consumer healthcare investments nationwide. We hope Washington will continue building open systems that excellent technology companies can tap into for delivery of coverage and care decisions, as well as allow for integration of new technologies with the exchanges. We can now drive ahead with those initiatives with the confidence of a firmly established ruling in favor of the ACA.