King Could Root Out the Tax Credit Recipients

The latest hurdle for the Patient Protection and Affordable Care Act (“PPACA”) comes on the King v. Burwell decision.  The case directly challenges the tax credit both families and individuals receive to, you guessed it, make healthcare more affordable.  In a recent poll by The Robert Wood Johnson Foundation two predictions were made: (1) 9.6 million people would lose coverage if the tax credit disappears after the King decision; and (2) the total number of people who are both uninsured and nonelderly would increase to 8.2 million.  Dan Cook, King ruling would reach beyond subsidies, benfitspro.com, January 23, 2015,

http://www.benefitspro.com/2015/01/22/king-ruling-would-reach-beyond-subsidies?eNL=54c16db6160ba03b139cc3c0&utm_source=BenefitsProNewsAlert&utm_medium=eNL&utm_campaign=BenefitsPro_eNLs&_LID=174299334. 

So why is this a big deal for everyone?  Insurance premiums are generally based on the number of people in the pool.  Think of insurance like buying pens for the office.  If you call the office supply company and want order one pen it could be a $1.00.  However, if you agree to order 500 pens the cost per pen could be reduced to 50¢.  It all has to do with the number of people in the pool.  Less people in the pool means higher premiums for everyone.  Higher premiums equal more people, those beyond the cusp of receiving or needing a tax credit, simply will not be able to afford healthcare insurance.  Moreover, this equals higher premiums for people and businesses who are able to provide health insurance for themselves and their employees.  This cycle could, and may, go on forever.  Until the King decision is released, all we can do is speculate. 

This is not intended to be legal advice and does not form an attorney-client relationship with any reader.