King vs. Burwell manifesto: 45 key points

The verdict on Supreme Court case King v. Burwell is expected by the end of June. The case will determine the legality of a fundamental aspect of the Patient Protection and Affordable Care Act, and a ruling in favor of the plaintiff would have profound — or what many call disastrous — effects on millions of American's ability to pay for health insurance. The outcome of the case could potentially unravel the PPACA altogether.

 Here are 45 things to know about the case.

 Background

 1. Plaintiff David King is one of four individuals behind the challenge. The other three are Douglas Hurst, Brenda Levy and Rose Luck. The four live in Virginia, which did not set up its own exchange. Although they are not the only people to challenge the PPACA — many people in similar situations in other states did the same — the Supreme Court decided to take their case.

2. King challengers argue the IRS regulation that allows subsidies to be provided to people within a certain income bracket in all states through the federal insurance marketplace HealthCare.gov is illegal because the language of the law stipulates only states that set up their own insurance exchanges can offer subsidies.

3. The Obama administration contends the language of the law clearly states subsidies are available through all exchanges, regardless of whether they are federal or state-run, and that the challenge is politically motivated.

4. In early November 2014, the U.S. Supreme Court agreed to hear King lawsuit and arguments took place in early March.

Who is David King?

5. David King is a 64-year old Vietnam War veteran, resident of Fredericksburg, Va., who works as a limo driver earning an annual income of $39,000, according to the International Business Times.

6. Mr. King didn't want to buy health insurance, and if he weren't eligible for the subsidies — which require compliance with the individual mandate — he would be exempt from the requirement. Mr. King told Politico insurance would be "unaffordable" to him under the health law if not for the subsidies.

7. Mr. King and his fellow plaintiffs filed the lawsuit based on what they argue was a misinterpretation of four words in the law: "established by the State." The plaintiffs' suit argued this wording means subsidies were only allowed for people purchasing healthcare on state-run exchanges, according to the International Business Times.

8. Mr. King's lawsuit was one of four similar cases challenging the tax subsidies in Obamacare. All were filed in 2013.

What is at stake if the Supreme Court strikes the federal subsidies?

9. If the Supreme Court rules in favor of King, PPACA subsidies for 6.4 million people in 34 states using the federal marketplace would be eliminated.

10. The 10 states with the most people currently receiving premium tax credits are on the federal exchange. These include:

  1. Florida — 1.32 million people
  2. Texas — 832,334 people
  3. North Carolina — 458,738 people
  4. Georgia — 412,385 people
  5. Pennsylvania — 348,823 people
  6. Virginia — 285,938 people
  7. Illinois — 232,371 people
  8. Michigan — 228,388 people
  9. Missouri — 197,663 people
  10. New Jersey — 172,345 people

11. A ruling in favor of the plaintiff would mean there would be approximately 8.2 million more uninsured people, according to a February study from the Urban Institute. The 8.2 million estimation includes the roughly 6.4 million people who would be losing tax credits for marketplace coverage, 1.2 million people purchasing non-group coverage without tax credits and 445,000 enrolled in Medicaid or the Children's Health Insurance Program.

12. Under current implementation of the law, the Urban Institute estimated $27.1 billion would be spent in 2016 on healthcare for individuals who receive subsidies for coverage. If the subsidies are eliminated, the newly uninsured would spend $5.3 billion on their medical care directly, and $12 billion in uncompensated care would potentially be provided for them if historic rates of uncompensated care persist. In total, healthcare spending for this population would drop 35 percent from $21.7 billion to $17.3 billion if the Supreme Court sides with the plaintiff.

13. If the Supreme Court strikes the subsidies, nonprofit hospitals would see significant effects on their credit, according to Moody's Investor's Service. Such a ruling would cause the uninsured rate in the 34 states without their own exchanges to increase, which would lead to higher rates of uncompensated care, the report said.

14. Hospitals in states that have not expanded Medicaid would be hit hardest by the an elimination of subsidies. "To date, hospitals in these states have experienced small improvements in payer mix through a reduction in exposure to self-pay," according to Moody's. If the subsidies are blocked by the Supreme Court, hospitals in these states "will lose the small payer mix gains, while continuing to absorb [ACA-related] reimbursement cuts," according to Moody's.

The Obama administration does not have a backup plan

15. HHS Secretary Sylvia Matthews Burwell sent a letter to Congress in February stating the Obama administration does not have a contingency plan if the Supreme Court rules in favor of King. "We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our healthcare system that would be caused by an adverse decision," Ms. Burwell wrote, according to The Hill.

16. White House spokesman Josh Earnest said there is "no easy fix" if the subsidies are eliminated, "particularly when you consider how difficult it has been for common-sense pieces of legislation to move through the Congress," according to The Hill.

17. If the plaintiffs succeed, Democrats in Congress will likely try to pass a one-page bill to amend the law's text to fix the ambiguities that initiated the case. However, Mr. Earnest's comments suggest the White House is not confident this would work, according to The Hill. At the same time, House and Senate Republicans both have commissioned groups to work on drafting response plans.

18. President Obama called King v. Burwell an "easy case" and said "it's important for us to go ahead and assume that the Supreme Court is going to do what most legal scholars who've looked at this would expect them to do." He also said the high court "probably shouldn't even have… taken up [the case]," in response to a reporter's question following the G7 Summit in Krun, Germany.

19. When the reporter asked him why he doesn't have a plan B, the president answered, "Well, you know, I want to just make sure that everybody understands that you have a model where all the pieces connect. And there are a whole bunch of scenarios not just in relation to healthcare, but all kinds of stuff that I do, where if somebody does something that doesn't make any sense, then it's hard to fix. And this would be hard to fix. Fortunately, there's no reason to have to do it. It doesn't need fixing. All right?"

20. Although the White House has not taken action to prepare for a loss in court, many physicians have begun devising their own backup plans if the subsidies are lost and their patients lose healthcare coverage. These plans include sending patients to free clinics, negotiating with pharmaceutical companies for discounted drugs, stocking up on free drug samples, encouraging patients to find out if they are eligible for Medicaid or other insurance programs and scheduling primary care appointments and procedures while patients still have insurance.

Legal experts' and leading health system CEOs' forecasts

21. Amy E. Sanders, an associate with the law firm of Bass, Berry & Sims, believes the decision could go either way. "It's a really close case," she told Becker's Hospital Review. "Both sides have very strong arguments." While she suggests the federal government might be more likely to win, the plaintiffs have a compelling argument. Ms. Sanders said there are a lot of conflicts and ambiguity in the subsidies and exchange provisions throughout the PPACA. Overall, she believes King v. Burwell is not a constitutional law case but a question of how the PPACA was interpreted.

22. Paul H. Keckley, managing director in the Navigant Healthcare practice, told Becker's Hospital Review he believes the Supreme Court will rule against the plaintiffs. "I think the intent of the law will prevail rather than the letter of the law," he said. Mr. Keckley believes the fact that the IRS acting as the agent of the government and concluding that the subsidies were accessible to both HealthCare.gov and state exchange enrollees is what will drive the high court's decision. He projects a 6-3 ruling.

23. Joel Ario, managing director of Manatt Health Solutions and prior Director of the Office of Health Insurance Exchanges at HHS, thinks the case hinges on whether the justices take external factors into account, such as the possibility of disrupting the marketplace and making health insurance unaffordable for millions of Americans.

After arguments, he said the case is looking more promising for the government. The reason for this: Justice Anthony Kennedy's concern about the consequences of the vote in the marketplace. "If he's paying attention to the consequences of the case in the marketplace, [Justice Kennedy] will decide for the government," Mr. Ario said. However, he added, "It may be the plain language dictates the result, and [Justice Kennedy] will feel he doesn't have the ability to pay attention to the consequences."

24. Barry Arbuckle, PhD, president and CEO of MemorialCare Health System in Long Beach, Calif., said, "I'd be shocked if the government lost the case. I think it'll be a 6-3 vote, not even a 5-4. Chief Justice John Roberts had the opportunity last time to interfere with the ACA, and he didn't. If I'm wrong, I think it'll take about 24 hours for states using the exchange to call up their attorney generals to say they will outsource the exchange."

25. Robert Wolterman, CEO of Ochsner Medical Center in New Orleans, agreed with Dr. Arbuckle. "I think [the lawsuit] is irrelevant as well. I think the button's been pushed on the rocket and it's been launched. I agree with Barry: Regardless of that decision, I don't see much of an impact or much of a change on what is already happening and how systems have already reacted."

26. On a similar note, John Jay Shannon, MD, CEO of Cook County Health & Hospitals in Chicago, said, " I have to agree. We talked a lot about things not working right, but if you look at the numbers of 14 million to 18 million more Americans who weren't insured three years ago having insurance now, while that's not a magic solution it is an absolutely minimal requirement and a step in the right direction. I don't think the president or HHS administrator is being coy when they say they don't have a plan B. It is inconceivable to have a plan B."

The Supreme Court Justices' different views on the case

27. The justices presiding over King v. Burwell are deeply divided on the matter. After nearly an hour and a half of oral arguments in the hearing March 4, Justices Elena Kagan, Sonia Sotomayor, Stephen Breyer and Ruth Bader Ginsburg "all seemed like solid votes for the federal government, defending the subsidies," while challengers "could clearly count on votes" from Justices Antonin Scalia and Samuel Alito, according to live coverage of the arguments from SCOTUSblog.

28. Shortly after the hearing, Justice Anthony Kennedy has said he sees "a serious constitutional problem" in the idea that Congress would force states to set up exchanges or run the risk of their residents losing tax credits. According to live coverage, during opening arguments for both the plaintiffs and the government, "A key focus in both portions continued to be Justice Kennedy, who at multiple times raised concerns about the constitutional consequences if the challengers' reading of the [PPACA] prevails," according to the Wall Street Journal.

29. During the hearing, the plaintiffs' lead attorney "barely got a dozen words out" before Justice Ruth Bader Ginsburg interrupted him to ask about the plaintiffs' standing and their ability to show they had been harmed by the subsidies. Liberal justices continued to dominate the questioning in the first 20 minutes, according to SCOTUSblog.

30. Justices Alito and Scalia seemed to acknowledge the calamitous consequences that would result follow a ruling against the states, by suggesting ways to alleviate it. Justice Alito reportedly said the high court could put off its ruling to allow time to adjust, and Justice Scalia reportedly said Congress would take action and fix it, according to the blog

31. Chief Justice John Roberts asked some questions but did not convey a clear indication of which side he was leaning toward. Justice Anthony Kennedy indicated through his questions that he was leaning more toward the government.

The American public largely supports subsidies offered in all states

32. A majority of the American public — 56 percent — wants the Supreme Court to uphold the subsidies, while 39 percent want subsidies reserved for individual state marketplaces, according to an Associated Press-GfK poll. If the court strikes the subsidies, 51 percent of total poll respondents want Congress to amend the PPACA to allow subsidies in all states, while 44 percent want the subsidies to only be available in states with their own insurance marketplaces.

33. Two-thirds of Democrats want the government to continue offering subsidies in all states, compared to 31 percent of Republicans, according to the poll.

34. Survey respondents indicated the public does not have much faith in the Supreme Court on this issue, with 48 percent of total poll respondents indicating they are not confident the court will determine a ruling based on "objective interpretations of the law" over their personal opinions on the Patient Protection and Affordable Care Act as a whole. Fewer — 39 percent — said they are moderately confident the justices can disregard personal beliefs, and just 10 percent are very or extremely confident they can

Other healthcare organizations' stance on the issue

35. Some of the healthcare industry's major organizations submitted friend-of-the-court briefs in King v. Burwell. In January, the American Hospital Association, the Federation of American Hospitals, the Association of American Medical Colleges and America's Essential Hospitals argued in a brief that removing subsidies to residents of states without their own exchanges "would be a disaster for millions of lower- and middle-income Americans."

36. Trinity Health also submitted a brief. The Livonia, Mich.-based system supports subsidies in all states. If the court decides to withdraw the subsidies, Trinity Health said it wants the court to delay the implementation until the end of the plan year, according to the system's friend-of-the-court brief. That would give Congress an opportunity to amend the law if necessary.

37. Nashville, Tenn.-based Hospital Corporation of America also supports subsidies in all states. HCA made national headlines after arguing in its brief that the petitioners' legal theory in the case would lead to "absurd consequences." The hospital operator pointed out that since receiving subsidies, many exchange patients are relying on care administered in emergency departments less and seeking care in outpatient settings more than the uninsured population. It suggests this proves "care is being provided in more appropriate and cost-effective settings."

38. America's Health Insurance Plans, the chief lobby for the insurance industry, argued in its brief that eliminating the subsidies in states using the federal exchange "would leave consumers in those states with a more unstable market and far higher costs than if the PPACA had not been enacted," according to The Wall Street Journal.

39. Additionally, 19 deans and more than 80 faculty members from schools of public health and public health programs across the nation submitted a brief that looked at the case from a patient care angle. They argued eliminating the subsidies would "put millions of people at risk for illness and death that could have been prevented or managed with the appropriate medical care."

Other healthcare leaders are attempting to create a back-up plan

40. Senate Majority Leader Mitch McConnell (R-Ky.) said congressional Republicans will have a backup plan if the Supreme Court strikes the subsidies, but declined to discuss the details until a decision is reached. "We'll have a plan that makes sense for the American people," Sen. McConnell said during an interview with The Joe Elliott Show June 8. "If the plaintiff is successful it will require some addressing of the issue, and if that were to happen we'll be ready to announce our proposal." He added that the PPACA is "a terrible law, but we are where we are."

41. At the annual National Governors Association meeting in Washington, D.C., in February, the fate of the healthcare subsidies was a major topic of discussion. Colorado Gov. John Hickenlooper (D), chairman of the NGA, told Bloomberg there is a lot of uncertainty regarding the alternatives if the Supreme Court rules in favor of the plaintiff. He said governors were exploring whether states that have established their own exchanges could cover residents of states that did not.

42. Insurance and health officials from about 16 or 17 states gathered in Chicago in early May for a private 24-hour meeting to further discuss options if the Supreme Court eliminates the subsidies.

43. Insurance and health representatives worry it is unlikely most of the states using HealthCare.gov could set up their own exchanges quickly enough to maintain their residents' tax credits, participants of the meeting told The Wall Street Journal. Although some officials talked about potential solutions, such as leasing an exchange from the federal government or a state that has one, they believe the obstacles could be too complex to be successful.

44. Additionally, participants in the private meeting in May indicated little confidence that their respective state governors, legislatures and insurance commissioners would all agree to establish an exchange if the Supreme Court rules in favor of King, and they questioned how they could accomplish this before the subsidies would disappear, according to the report.

45. Kevin Counihan, CEO of HealthCare.gov, said states would not be able to immediately create their own insurance marketplaces if the Supreme Court rules in favor of the plaintiff. Creating a health insurance exchange is a "very, very complex activity" that cannot be completed in a few months, and exchanges created this summer would certainly not be ready for the next enrollment period beginning in November, Mr. Counihan said during a day-long panel for health insurance exchange representatives in early May.

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