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The Consequences of Eliminating Obamacare Subsidies

Posted on November 10, 2012 by admin

Various lawsuits are challenging the legality of providing Affordable Care Act subsidies in states that purchase coverage from the federal Health Insurance Marketplace, rather than creating their own state insurance exchanges. In September, United States District Judge Ronald A. White became one such figure to rule against the legality of these tax credits outside the 14 states that have established exchanges of their own.

Judge White was not the first to declare such a position.

Back in July, a panel of three judges of the Washington Court of Appeals ruled that these subsidies should only be allowed in states that have their own health insurance exchanges. However, the panel has changed their mind and is willing to reconsider their position on the matter. Their reluctance to remain steadfast shows the importance of the case.

A recent study by the RAND Corporation examines the consequences of limiting these subsidies to states with exchanges. Their analysis indicates that the removal of subsidies in states that must purchase coverage from the federal marketplace would cause 11 million people to lose the health insurance they received under the Affordable Care Act. Given that more than seven million previously uninsured individuals received coverage last year, this would be a severe blow to the impact of the healthcare legislation.

The study also reveals that the cost of premiums in the insurance marketplaces would rise by as much as 43 percent. Due to substantially higher prices, enrollment would drop. The RAND Corporation projects a plummet of 68 percent in health insurance enrollment.

Yet, even in the face of these serious concerns, the GOP continues the fight to repeal Obamacare. Conservative law makers like Judge White, who was nominated by President George W. Bush in 2003, want to see subsidies eliminated, even though millions of Americans in need will be adversely affected.

The Obamacare debate faces many more casualties, simply because of the fact that officials cannot get beyond the politics of the matter. Clinging to their beliefs, they refuse to appreciate the good the Affordable Care Act has done.