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Healthcare Subsidies At Stake For Many Texans As Supreme Court Prepares To Rule

U.S. Supreme Court buildling in Washington, D.C.

A U.S. Supreme Court ruling expected as early as Monday morning  could result in hundreds of thousands of Texans losing their health insurance. 

The reason is the King v. Burwell case Justices on the court are poised to decide. 

Plaintiffs in the case have argued that subsidies which help lower-income people pay for insurance premiums under the Affordable Care Act should only be available in states that operate their own insurance markets. 

Texas is among 34 states that chose to have its residents use the federal government’s exchange rather than set up its own.

If the Supreme Court agrees with the plaintiffs, insurance subsidies would disappear for about 830,000 Texans who already receive them.  Over one million Texans qualify for subsidies. 

Stacey Pogue is with the Center for Public Policy Priorities in Austin, an organization that advocates for low-income Texans.  She says many Texans who rely on the assistance will drop their coverage if the subsidies disappear.

“Subsidies (in Texas) are on average about $250 a month or $3,000 a year.  That pays 75 percent of their premiums.  So the premiums for those families would quadruple as soon as those subsidies go away.  And the fact is that most of those families, most of those Texans, would have a very hard time affording that increase in their premiums,” said Pogue.

Pogue says those who give up coverage would go back to relying on emergency rooms or charities,  or they’d go without care altogether.

And those losing subsidies wouldn’t be the only ones affected.  Pogue says Texans who don’t receive health coverage through their employers but buy directly from insurance companies would see their premiums climb 35- to 50-percent.  

“As people who have subsidies leave the market, the healthy ones will leave first, and people who are more sick will hang on to their insurance and that will make the whole pool less healthy,” she explains.

“It’s something experts call the Death Spiral.  It’s a pretty dramatic term but it would mean for the remaining people who have insurance premiums would spike.”

If justices vote to strip away the subsidies in states like Texas they could delay the impact by giving Congress time to consider a remedy.   

In the recent Texas legislative session House Democrat Chris Turner from Arlington filed HB 817, a bill that would have set up a state exchange to protect those receiving subsidies, but that bill didn’t get very far.

Shelley Kofler is Texas Public Radio’s news director. She joined the San Antonio station in December 2014 and leads a growing staff that produces two weekly programs; a daily talk show, news features, reports and online content. Prior to TPR, Shelley served as the managing editor and news director at KERA in Dallas-Fort Worth, and the Austin bureau chief and legislative reporter for North Texas ABC affiliate WFAA-TV.