Update on House v Burwell case

On December 5, 2016, the District of Columbia Circuit Court of Appeals accepted a Congressional request to postpone further proceedings in House v Burwell pending motions due February 21, 2017, turning the continued proceedings in this case over to the next administration and Congress.

In November 2014, the House of Representatives filed suit against the current administration claiming the cost-sharing reduction payments made to issuers for silver level Marketplace enrollees, with incomes of less than 250% of the Federal poverty level, are not lawful because Congress has not appropriated the funds. Cost-sharing reductions, together with advance premium tax credits, are significant affordability measures included in the Affordable Care Act (ACA): they were established to ensure that individuals in moderate income brackets could purchase Marketplace coverage. As such, the impact of the ruling in this case has far-reaching repercussions for consumers, states and insurance issuers. It is estimated that 8.8 million individuals are currently receiving financial assistance for plans purchased through the Marketplace. According to recent statistics released by HHS1, another 11.5 million are likely eligible but are currently not enrolled in eligible plans.

If the House prevails, Marketplace withdrawal and/or large premium increases are likely without Federal appropriation to reimburse issuers for the cost sharing reduction payments (the implementation of cost-sharing reductions will still be mandated law). As we await further proceedings on this case, issuers will begin to decide whether to offer Marketplace coverage, what plans to offer and what their rates will be. State regulators are likely to see the prospective impacts from the uncertainty of many ACA-related unknowns, within the coming months.

[1] https://www.hhs.gov/blog/2016/12/02/almost-12-million-americans-stand-to-gain-financial-help.html

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