The Supreme Court will soon render an opinion in King v. Burwell, challenging the implementation of the Affordable Care Act which stipulates that subsidies can only be paid “through an Exchange established by the State.” If the plaintiffs are upheld, it will mean that anyone receiving health insurance through one of the federal exchanges operating in 33 states is not eligible to receive a subsidy. It will be necessary for Congress to intervene to fix a problem like this.
Three committee chairs in the House of Representatives, John Kline, Paul Ryan and Fred Upton, are proposing to take such an opportunity to improve the Affordable Care Act along the following lines:
- First of all, making health insurance more affordable by ending both the individual and employer mandates, and giving choices back to the states, individuals and families.
- Secondly, supporting Americans in purchasing the coverage of their choosing. For example, people could save money by buying insurance across state lines.
- Finally, many existing features of the ACA would be retained. Children could stay on their parents policies until age 26. Lifetime limits on benefits would be prohibited. People with existing conditions would be protected. Renewability would be guaranteed. Insurance would be decoupled from employment by offering equal (perhaps, age adjusted) tax credits for all.
There remains the practical problem of providing immediate assistance to the approximately 5 million people currently receiving subsidies through the federal exchanges, while larger scale changes are being worked out by Congress. The American Enterprise Institute has proposed a simple way for Congress to do this as follows:
- Enact a short-term extension of subsidies for current enrollees.
- States with federal exchanges could immediately set up a state exchange if they wished.
- People with preexisting conditions and/or continuous coverage would be protected.
Both quality control and cost control are badly needed to make the ACA sustainable for the long run. Given the right decision in King v. Burwell, these two plans outline a possible way to accomplish this.