As attorney general of California, I have vigorously defended the constitutionality of the Affordable Care Act. This landmark law has brought much-needed reform and accountability to our health care system. And despite what you may have heard, it’s changed millions of lives for the better.
Thanks in large part to the health reform law, California’s uninsured rate fell by almost 40 percent in 2013, making our state healthier and more prosperous.
Wednesday, the U.S. Supreme Court will hear arguments in King v. Burwell, a case that centers on the Affordable Care Act’s insurance subsidies. The issue is whether those subsidies are being lawfully provided in the 34 states that did not set up their own insurance marketplaces but allowed the federal government to create them instead. It’s a case with far-reaching ramifications, both nationally and in our state.
California is one of 16 states, along with the District of Columbia, that has its own, state-run health insurance marketplace. This should come as no surprise – California has long led the way in expanding access to affordable, quality health coverage. In fact, a number of Affordable Care Act provisions – for example, barring discrimination against children for pre-existing conditions – were already in place in California law. And so the more than 800,000 Californians who obtained coverage through Covered California, our marketplace, will retain their subsidies and their coverage regardless of the court’s decision.
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But millions of other Americans may not be as lucky.
According to a recent study by the Urban Institute, ending subsidies on federally run marketplaces in these 34 states will lead to more than 9.3 million people losing nearly $29 billion in tax credits to help them purchase health insurance. The effect would be devastating for low- and moderate-income families relying on these subsidies, which average $3,090 a person. As many as 8.2 million people would be unable to afford their premium and most likely be forced to drop their coverage.
The end of subsidies in those states could also have a crippling effect on the national health insurance market. As those who won’t be able to afford coverage exit the market, premiums will rise, making insurance more expensive for everyone else. What’s more, those who are most likely to forgo coverage are the young and healthy whose participation in the insurance market is necessary to keep rates low. Individuals with health conditions – those who need coverage the most – will be forced to remain in the market and pay higher rates. These individuals are also more likely to seek care, further driving up the cost of insurance. This will destabilize the insurance market across the nation, including in California.
The court’s ruling could also hit our economy hard. Health care is a key industry. Many hospitals and other providers made significant investments to adapt to, and benefit from, the Affordable Care Act. These providers are relying on an influx of new patients – many of whom are newly insured, thanks to federal subsidies. Eliminating those subsidies will have devastating effects on this market. And let’s not forget the impact on individuals: Health costs are the No. 1 cause of private bankruptcies; many individuals will lose their jobs because they are sick.
If the court rules in favor of the plaintiffs, innovation in health care would be crippled. Since the Affordable Care Act was signed, more than $14.5 billion has been invested in digital health care systems, much of it in California, the tech center of the nation. With fewer patients, companies will have less incentive to continue pumping much-needed capital into this new and promising market.
Finally, there is a massive public health cost. Diseases that would have been prevented with routine medical care will go unchecked.
Regardless of whether you are young or old, healthy or ill, insured or uninsured, every person, in every state, has a stake in King v. Burwell. If the court rules against insurance subsidies, it won’t just hurt the working-class families who are relying on those subsidies to protect their health and financial well-being, it will hurt us all.
The Affordable Care Act has brought quality, affordable coverage to millions of Americans. Let’s not take a step backward by undermining this landmark achievement.
Kamala Harris is attorney general of California and signed a multistate amicus brief defending the Affordable Care Act.