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Nov. 15, 2012 Volume 34, No. 13

Ambiguity in Affordable Care Act could impact Missourians, expert says


Without the subsidies, health insurance would be unaffordable for many Missourians

When Missouri voters approved a referendum on Election Day prohibiting Gov. Jay Nixon from initiating a state-based health insurance exchange called for under the Affordable Care Act, they put $2.2 billion in federal health insurance subsidies for low-income Missourians at risk, said Philip Peters, the Ruth H. Hulston Professor of Law at MU.

Because of a “drafting error,” Peters explained, the sweeping federal health care overhaul contains contradictory language about who is eligible to receive federal assistance to buy health insurance when the main provisions of the law take effect in 2014.

The law calls for each state to create online marketplaces (called “exchanges”) where, starting Jan. 1, 2014, individuals can shop for health insurance. The states have until Friday to submit blueprints for their exchanges to the federal Health and Human Services Department (HHS). 

If a state does not create its own exchange, the federal government will set one up for it. However, the act mentions only people who are in state-based — not federally-based — exchanges. 

Peters said HHS is treating that language as an ambiguity and directing the Internal Revenue Service to make the subsidies available to everyone. However, one state, Oklahoma, is already challenging that decision in court. 

How that case is resolved could impact Missouri, which is one of many states that will miss the Friday blueprint deadline and be covered by a federal exchange.

Without the subsidies, insurance will remain unaffordable for many Americans. “If we don’t get premium subsidies, we’ll give up $2.2 billion in help for people who are uninsured or underinsured,” Peters said. “You can count that in the number of people who can’t get chemotherapy or [other treatments] — it’s directly translatable to deaths and serious bodily harm.”

If the district court in Oklahoma throws out the HHS directive allowing subsidies for federal exchanges, that decision would only impact Oklahoma. The case would have to reach the Supreme Court on appeal before the decision would be binding for Missouri. 

— Erik Potter