Friday, May 13, 2016

Health-insurance stocks fall in reaction to federal judge striking down one Obamacare subsidy; ruling is stayed pending appeal

"Shares of Humana, Aetna and other health insurance companies tumbled on Thursday, as a federal judge ruled that Affordable Care Act subsidies could not be dispensed without congressional approval," Boris Ladwig reports for Insider Louisville. "Humana’s shares slid 2.5 percent, and Aetna’s dropped 3.26 percent. Insurers Anthem and UnitedHealth Group also booked declines."

District Judge Rosemary Collyer of the District of Columbia ruled that Congress had never provided money for the subsidies to people who buy health insurance through Kynect and other exchanges. "Without subsidies, fewer people would be able to afford to purchase health insurance, which means insurance companies would lose customers," Ladwig explains.

Collyer, an appointee of George W. Bush, allowed the program to continue while the Obama administration appeals her ruling to the D.C. Circuit Court of Appeals. The Supreme Court appears likely to decide the issue.

The suit by House Republicans involved only cost-sharing subsidies, not the income-tax credits that apply to monthly premium payments. The Obama administration funded the cost-sharing with money from the tax-credit account.

The cost-sharing subsidies are available to people with incomes between 100 and 250 percent of the federal poverty level — between $24,300 and $60,750 for a family of four. "Several million Obamacare customers receive cost-sharing subsidies, but the exact figure is unknown," Jennifer Haberkorn reports for Politico. "As of the middle of the last Obamacare enrollment period, 57 percent of people who signed up for coverage through the federal exchange on receive them. . . . If the subsidies are ultimately struck, it would reinforce claims from opponents of the health law that the Obamacare insurance plans are not actually affordable."

No comments:

Post a Comment