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Obamacare Ruling Gives Insurers Green Light to Ramp Up Markets

June 17, 2021, 6:47 PM

The Supreme Court’s 7-2 decision upholding Obamacare Thursday will give health insurers more confidence in the Affordable Care Act exchanges, health-care analysts said.

“This favorable decision, though widely anticipated, puts additional wind in the sails of a market that has been developing significant momentum,” Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, said in an email.

The court’s ruling that Republican challengers to the ACA didn’t have legal standing means insurers face no foreseeable barriers to their markets, which have been rebounding over the past several years. If the court had ruled that the law had to be overturned, it would have upended markets and threatened coverage for some 20 million people who are enrolled in ACA or Medicaid plans, which are also affected by the 2010 law.

“By removing another legal cloud looming over the Marketplaces, the ACA is likely to grow even more popular with both insurers and consumers, especially with the Biden Administration prioritizing ACA improvements over other health reform goals,” Joel Ario, managing director with Manatt Health Strategies, said in an email. Ario was the first director of the health insurance exchanges at the Department of Health and Human Services in the Obama administration.

Stock prices for health insurers Centene Corp. and Molina Healthcare, which have large presences in the ACA exchanges, jumped on the news that the court upheld the law.

Continued Stability

“The main implication from an actuarial perspective is continued stability of the legal framework that defines the ACA insurance markets,” Cori Uccello, senior health fellow with the American Academy of Actuaries, said in an email.

“It’s exactly the status quo,” Katie Keith, a research faculty member of Georgetown University’s Center on Health Insurance Reforms, said in an interview. Insurers could have been discouraged from offering health plans in the ACA exchanges while the legal standing of the law was in question.

James Klein, president of the American Benefits Council, which represents large companies that provide health coverage for their workers, said in a statement that the ruling means “the health care policy world returns to a state of cautious certainty.”

However, Klein added, “Since the ACA was enacted more than a dozen years ago, employers have been asked to comply with and commit to the law despite numerous legal and legislative challenges. We hope the court’s ruling re-establishes the ACA as settled law that can be relied upon —and improved.”

The ABC “will continue to engage lawmakers on both sides of the aisle on legislation to improve health care affordability, quality and coverage as a lasting legacy for all Americans,” he said.

Small Business Majority, which supports the ACA, issued a statement from founder and CEO John Arensmeyer calling on Congress to focus “on strengthening the law and creating even more opportunities for small business owners to access quality coverage at an affordable price.”

More than 1.2 million people have signed up for Obamacare health coverage through HealthCare.gov during the special enrollment period that began on Feb. 15, the Department of Health and Human Services announced June 14.

The American Rescue Plan Act increased subsidies for ACA plans to cover people at higher income levels and to offer plans that cost little or nothing to lower-income people. The Biden administration and ACA supporters want to make those additional subsidies permanent.

To contact the reporter on this story: Sara Hansard in Washington at shansard@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com

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