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What Utahns need to know about today's Obamacare rulings

Published July 22, 2014 5:08 pm

86 percent of Utahns who got new coverage under Obama's health care law are subsidized.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The latest legal fight over the Affordable Care Act takes aim at federal subsidies given to residents of Utah and 35 other states that didn't set up their own health care marketplaces.

A panel of D.C. Circuit judges ruled Tuesday the law allows federal subsidies to flow only through state-created marketplaces and not to people who bought coverage through Healthcare.gov. But on the same day, a 4th Circuit ruling in a separate, but similar, case allows the federal government to give subsidies to those people who meet the criteria whether they bought a plan through a federal or a state marketplace.

So what does this all mean for Utahns? Here are some answers:

Why might Utah be affected by these rulings?

The new federal health law, often dubbed Obamacare, encouraged states to create their own insurance marketplaces, online portals where people could shop for coverage if they do not get insurance through their jobs. Thirty-six states, mostly led by Republicans opposed to the law, ultimately refused.

As a result, the federal government created Healthcare.gov.

Utah does have a marketplace for small businesses, called Avenue H, but Gov. Gary Herbert decided in late 2012 that he wouldn't create a marketplace for individuals searching for coverage on their own.

What is the next legal step?

The Obama administration plans to appeal the 2-1 panel decision to the full D.C. Circuit. It's possible that one or both of these cases could eventually go to the U.S. Supreme Court. If that happens, a final ruling would be months away.

How many Utahns received such subsidies?

As of mid-April, 84,601 Utahns had signed up for coverage through Healthcare.gov and more than 72,700 of them received federal subsidies. The average subsidy was around $174 per month. It's likely that hundreds, if not thousands, of Utahns have signed up since mid-April because they have changed jobs or lost their previous plans for another reason.

Nationwide, 4.5 million people received subsidies.

Do Tuesday's rulings change or stop those subsidies?

No. These rulings, while important, are far from the final word. No one's subsidies will stop at this time.

Jason Stevenson at the Utah Health Policy Project, which assists Utahns in signing up for the Affordable Care Act, says people should feel comfortable using their insurance.

"The insurance you have today is going to be good today," he said. "It is going to be good tomorrow, next week and next month."

And it may not change next year. Open enrollment in both the federal and state-based exchanges starts Nov. 15, and it is unlikely that a final ruling on this dispute would happen before then, notes state Rep. Jim Dunnigan, R-Taylorsville, co-chairman of the Legislature's Health Reform Task Force.

Stefanie Minen, a psychotherapist in Salt Lake City who bought coverage through the federal exchange, is optimistic the courts won't end the subsidy she receives.

"Things are in flux and that creates a lot of confusion and frustration," she said. "But I also believe that the changes that have taken place are really good and it's going to take change, which creates confusion and frustration, in order to get to a better place. These changes are taking us in a better direction."

Who is saying the D.C. Circuit got it right?

Many Republican officials applauded the D.C. Circuit ruling as a step toward dismantling a health care law they argue is too broad. Sen. Orrin Hatch, R-Utah, is among them.

"The plain text of Obamacare authorizes subsidies only through state exchanges, not the federal exchange," he said. "As it has on so many occasions, the Obama administration simply ignored the law and implemented its own policy instead."

Herbert's spokesman Marty Carpenter noted that the governor has long been a critic of Obamacare.

"It is a law that was deeply flawed from the beginning," he said, "and continues to show its flaws."

How does the White House respond?

Josh Earnest, the White House press secretary, said in a statement: "You don't need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs, regardless of whether it was state officials or federal officials who were running the marketplace."

Do these cases affect the debate on Medicaid expansion?

Not directly, but the threat that these subsidies may go away could rile the debate about whether Utah should accept some expansion of the program that covers the poor.

Herbert's plan, called Healthy Utah, would use the money slated for Medicaid expansion to assist the poor in getting private coverage through a state-created exchange that is now used for small businesses. Since it would be state-created, these people would have access to subsidies. But the Legislature is squeamish about any expansion, worried about potential long-term costs.

Herbert's supporters have said his plan has a fail-safe. If it becomes too costly, the state could shift roughly 50,000 people into the federal exchange, those who are between 100 percent and 138 percent of the poverty level. If the D.C. ruling is upheld, that fallback option may evaporate. It would be hard, if not politically impossible, to force those people to buy insurance on the open market without subsidies.

Dunnigan believes Tuesday's decisions will make lawmakers more entrenched in their positions.

"If there is a person supporting Medicaid expansion, they are going to say, 'We need to do it now more than ever because we can't rely on those subsidies,' " he said. "If a person is against Medicaid expansion, they are worried about long-term costs and this may mean we are committed to covering up to 110,000 Utahns long term."

mcanham@sltrib.com

Danielle Manley contributed to this report.