King v. Burwell Ruling Would Affect Nearly 7.5 Million Consumers

Individuals receiving subsidies in states which could be affected by the Supreme Court King v. Burwell ruling could see an average increase of 255 percent in their required premium contributions. That means nearly 7.5 million Americans could face a premium increase in 2015 based on “Health Insurance Marketplace 2015 Open Enrollment Period: January Enrollment Period: ASPE Research Brief”. The premium increases would be concentrated in low-income populations in red states where the Federal exchanges are established.

87 percent of federal exchange customers currently receive subsidies. If the Court declares subsidies illegal in federal exchange states:

– Average monthly premium contributions for enrollees could increase between 122 percent and 774 percent, depending on the state.
– Residents in Alaska and Mississippi will see the highest percentage increase in their premium contributions.

Under the Affordable Care Act in 2015, consumers are eligible for a hardship exemption from the individual mandate if the premium of the lowest cost Bronze Plan available to them in their region exceeds 8.05 percent of their income. Loss of premium subsidies in federally run exchanges would mean many exchange consumers will be exempt from the individual mandate.

Also, it could undermine employer responsibility requirements in those areas, because the employer mandate is tied to employees claiming a premium subsidy. The implications of the ruling concerning the individual mandate will have a larger impact on younger enrollees, who are less likely to be exempt from the mandate due to age rating differences.

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