“Obamacare’s” Annual Enrollment Period for 2015 has ended but the arguments over the controversial law have not stopped.
In March the Supreme Court of the United States, SCOTUS, will hear arguments in the case of King v. Burwell.
The question that will be decided is over a poorly written part of the Patient Protection and Affordable Care Act. When Harry Reid wrote the law, he said that the federal tax-credits would only be available through state-based health insurance exchanges.
At issue is whether the IRS can legally “subsidize” health insurance for people who use the federally built Healthcare.gov.
A ruling in favor of Burwell means that SCOTUS is ruling in favor of the spirit and intent of the PPACA.
However, King insists that the law must be applied exactly as written. If SCOTUS bases its ruling on the letter of the law, King will win.
That will mean that the confusing section of the PPACA will be sent back, to congress, for a total rewrite. The problem is that when the PPACA was originally passed, the Democrats controlled both the House of Representatives and Senate. In 2015, the Republicans control both houses of congress. It is doubtful that a rewrite of the controversial PPACA will be a high priority for congress.
If that happens, the IRS will stop paying “subsidies” until congress rewrites, and passes the law. People who have bought health insurance through Healthcare.gov and chosen to have their tax-credit advanced to help them afford their health insurance premium, will have to make a choice this summer.
They may either allow their policy to lapse for non-payment, or pay the full price of their health insurance.
In light of the Individual Mandate, under the current rules, a lapse of health insurance will not cause an additional tax problem for people whose household income is 128% of the Federal Poverty Level or lower.
However, unless the White House changes the rules again, and grants and exemption to all Americans who are affected by King v. Burwell, it can screw up any tax planning, for 2015, that people have made if they live in a state serviced by Healthcare.gov.
WHITE HOUSE PLAN B
As of now, Mr. Obama is convinced that Burwell will prevail. The White House has not made public any plans to help Americans if SCOTUS rules in favor of King.