June 25, 2015

What the Supreme Court decision means for health care


The King v. Burwell case—whether health insurance subsidies are for everyone or only people in certain states—has implications for all Americans, writes Dr. Eric Larson.

by Eric B. Larson, MD, MPH

The U.S. Supreme Court just decided that providing health insurance subsidies for more than 7 million people is legal. The ruling responds to King v. Burwell, a case that challenged the part of Obamacare (the Affordable Care Act) that provides financial assistance for health insurance. As a health services researcher, health system executive, and physician, I’ve been waiting for the decision, which sets the future course of health care. Here’s some background on the case.

  • Under Obamacare, the goal is for all Americans to have health insurance. Subsidies help people buy it.
  • To buy health insurance, people in 13 states use a state system and people in other states use the federal marketplace.
  • King v. Burwell claimed that only people with access to a state marketplace could get subsidies—not people in the other states.
  • If the Supreme Court had decided the King v. Burwell claim was correct, the 87 percent of people getting insurance through the federal marketplace who receive subsidies would have lost that support.

The American insurance system is complex, so I’m leaving out nuances. To learn more about Obamacare and its impact so far, I recommend this thorough New England Journal of Medicine review. For now, here are my first impressions about the ruling.

The impact of King v. Burwell on Americans

I’m relieved that the Supreme Court decision maintains the current state of U.S. health care. Insurance subsidies will continue for all people who currently receive them. This stability in the health care and coverage system is good news for insurance and care systems, and for physicians and patients.

While we’re still making improvements to U.S. health care, more people now have health insurance—a predicted 12 million people in 2014 alone—and the King v. Burwell decision will help them keep it. This is a direct consequence of Obamacare and key measure of its success. Eliminating subsidies for millions would have forced health care systems, physicians, and patients into difficult decisions about paying for care. Our payment system is not perfect, but the Supreme Court decision avoids severe disruptions in insurance prices and coverage that would have worsened care.

The King v. Burwell decision ensures that we will continue on the path that has reduced the percent of uninsured Americans from 20 percent to 16 percent in four years. Covering as many people as possible is a worthwhile goal: it promotes the health of individuals, our communities, and our economy. Adequate, stable, widespread health insurance helps correct social disparities.

U.S. health care is undergoing rapid changes and we should all stay informed. We still have major problems with excessive health care costs and waste. This is the next challenge for Obamacare. We have some welcome good news that since Obamacare, the rate at which health care costs have risen has decreased. Although we’re not sure of the details about how and why costs are decreasing, this is another good outcome of Obamacare and I look forward to more. Follow health care developments at this blog, at the Kaiser Family Foundation, and the Commonwealth Fund