Latest ACA challenge puts consumers’ savings at risk

As Washington state’s elected insurance commissioner, I’ve vigorously supported and implemented the federal Affordable Care Act (ACA) and our state has seen tremendous benefits under the law.

Our uninsured rate has dropped from 13.9 percent in 2012 to 8.2 percent and continues to go down and thousands of people have access to meaningful coverage.  Prior to the ACA, nearly 80 percent of people who bought individual health insurance had plans that covered less than half of their medical costs. Now, people have access to meaningful coverage and help affording their premiums.

{mosads}One of the key ACA reforms provides citizens who income qualify with premium tax credits and subsidized cost-sharing reductions to help them buy health insurance.  These savings can be significant. About a third of enrollees pay no deductible, helping them to afford care when they need it. This means better preventative care, less costly emergency room visits, and healthier people overall.

In Washington state, nearly 70 percent of people buying plans through the Washington Health Benefit Exchange receive federal tax credits of more than $28 million.  And more than 70,000 people receive cost-sharing reductions through our exchange, at a cost of more than $5 million. 

Helping people afford coverage will eventually help drive down medical costs for everyone. More importantly, it’s the right thing to do.

This year, insurers nationwide are asking for significant premium increases. In Washington state, insurers have requested an average rate increase of 13.5 percent– much lower than many other states and far less than what was projected before the ACA – but significant. I believe we will see premiums stabilize over time as insurers gain experience with the new marketplace.

But a greater risk is lurking for consumers.

Americans could soon face much higher premiums because of a lower-court decision in House v. Burwell, a lawsuit brought by the Republican House of Representatives against the Obama administration.

It asserts that members of Congress did not appropriate money to pay for the cost-sharing reimbursements when, in fact, they quite clearly intended the permanent appropriation that covers premium tax credits to also cover cost-sharing reimbursements.

The federal government has appealed the ruling to the D.C. Court of Appeals. If the courts ultimately rule in favor of the House, insurers will still be responsible by law to reduce cost-sharing, but will not be reimbursed for doing so.

Insurers not only have a legal right to be reimbursed for cost-sharing reductions by the federal government, they also count on this money when determining next year’s premium change. Denying them any reimbursement will increase premiums for individuals buying through exchanges by as much as $1,000 per person on average.

The individual health insurance market may very well collapse in many states as insurers abandon marketplaces.

We should all be concerned about the outcome of this case. This lawsuit assails the ACA’s promise of cost-sharing reductions for low-income Americans and if it prevails, will make health insurance costlier for everyone.

In a recent Supreme Court decision that rejected another political challenge to the ACA, Chief Justice Roberts concluded: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

The D.C. Court of Appeals should follow that precedent and acknowledge that Congress clearly intended to fund tax credits and cost-sharing reductions. Better yet, the case should be dismissed altogether.  If not, consumers will face the skyrocketing premiums predicted before the Affordable Care Act.

Mike Kreidler is Washington state’s eight insurance commissioner and the country’s longest serving commissioner.