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Supreme Court overturns ACA subsidies in states using federal insurance marketplace

Today, the Supreme Court decided the case of King v. Burwell, eliminating subsidies for the purchase of insurance in states that rely on the federally run health insurance marketplace. A little bit about the case: This case (or actually cases, the court put together a number of cases asking the same question) asked whether the Affordable Care Act (ACA) allows for subsidies for the purchase of insurance when a state relied on the federally run exchange. The language in the law allows subsidies in exchanges “established by the state;” however, IRS rules provided for subsidies in the federally operated exchange (healthcare.gov). It will take some time before we fully know what today’s decision will mean for rural health. But we do know rural Americans tend to be older, sicker and poorer than their urban counterparts. So they are more likely to be in need of health care and less likely to have employer-provided insurance to help pay for that care. While the National Rural Health Association did not take a position on ACA, we have continued to fight to ensure access to health care in rural America. Because so many rural Americans live in states with state exchanges and are in the income bracket eligible for subsidies, NRHA is concerned that a disproportionate number of rural Americans stand to lose the subsidies they need to afford health insurance. Currently, 18 percent of rural Americans are uninsured. And about three in four rural uninsured are eligible for premium subsidies. Only those living in states that rely on the federal insurance exchange are impacted by this decision. However, nearly 80 percent of rural Americans live in states using the exchange (vs. 60 percent for urban). Thus, the impact of this decision is felt particularly acutely in rural America. According to a 2014 Kaiser Family Foundation report, 50 percent of rural residents (vs. 43 percent of urban residents) have family incomes between 100 percent and 400 percent of the federal poverty level (FPL). It is in this income range where people are potentially eligible for subsidies to purchase of health insurance. While some of these people receive insurance though their employer, Kaiser reported rural residents are less likely to have coverage though a job (51 percent of rural Americans vs. 57 percent of urban residents). Those without insurance though their employer face higher out of pocket costs for their premiums, which means many in this income bracket may simply not be able to afford coverage without subsidies, according to the report. NRHA will continue to examine the potential rural impacts of this decision. Join us at 11 a.m. CDT June 30 for a call regarding the Supreme Court ruling, the latest Senate Appropriations news impacting rural health and our recent #SaveRural Hospitals Rally. We will also update this blog with more details as we break down the decision and the accompanying dissent.

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