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One View of How the King v. Burwell Ruling Might Affect California’s Minorities

Next week, the U.S. Supreme Court will hear King v. Burwell, which could decide the fate of federal subsidies in non-state-based health insurance exchanges. At issue is the ability to expand access to insurance under the federal exchanges of the Affordable Care Act.

Although the case originated in California, this state will not be as affected as others. Since California is one of 13 states — along with Washington, D.C. — operating its own health insurance marketplace, it would not be directly affected by a ruling against subsidies in federally-run exchanges.

The Supreme Court is scheduled to hear the case March 4 and is expected to rule on it months later.

But no direct impact does not mean no impact at all, according to Iyan John, a senior policy analyst at the Asian & Pacific Islander American Health Forum in San Francisco, a consumer health advocacy organization.

In California, the subsidies wouldn’t go away because we’re a state-based exchange, so the effect would not be as direct,” John said. “But what we don’t know is how it will affect the marketplace overall. This could be something that leads to premium increases.”

It’s analogous to the relationship between Medicare and private commercial. The payment systems are completely separate, but when the federal government adjusts Medicare rates, it can have an effect on private insurer rates. That’s John’s concern.

“It could have a ripple effect within states that have their own exchanges because the insurance industry would change, the health care environment would change,” John said. “Definitely it would still have some effect on state-based exchanges.”

John said if rates do shift within California because of national trends fueled in part by the upcoming Supreme Court decision, those rate shifts would particularly hurt minorities.

“Many communities of color will be disproportionately impacted,” John said. “We would see higher rates of uninsurance among those communities.”

People getting coverage through the exchange still pay for that coverage, even if they’re also getting subsidies to help pay for it, John said.

“It’s still expensive for people to afford that coverage, even now,” he said. “Most of the people in those communities, even with subsidies, it was difficult for them to afford coverage. It does help people, but it’s still a challenge to afford it.”

Since no one knows how much of a change might be coming, there’s little to do about it from a policy point of view, John said. 

“In terms of California-specific policy, there will be ripple effects, but it’s hard to say what it will be,” John said. “So it’s difficult to say what should be done about it, because no one knows exactly what we’ll be dealing with.”

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