Fight at US Supreme Court over health insurance subsidies affects Illinois residents

Economic Indicators Associated Press

A case being heard at the U.S. Supreme Court next week challenges health insurance subsidies for more than 270,000 Illinois residents and many more people in states that did not set up their own insurance exchanges under President Barack Obama's health overhaul.

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Any decision against the subsidies, according to an amicus brief signed by Illinois Attorney General Lisa Madigan and 21 other states, "would destroy state insurance markets and render the (Affordable Care Act) unworkable." The brief, filed Jan. 28, argues that Congress intended the health law to cover all Americans.

The issue rests on the interpretation of four words in the health care law. The challengers argue the law provides subsidies only to people who get their insurance through an exchange "established by the state." About three dozen states — including Illinois — have not established their own marketplaces and instead rely on the federal HealthCare.gov system.

Obama's law offers subsidized private insurance to people who don't have access to it on the job. Without financial assistance with their premiums, millions of those consumers would drop coverage.

The Supreme Court hears arguments in the case March 4 and is likely to rule on the matter in June, after the Illinois Legislature's scheduled adjournment. So far, state lawmakers have not authorized a state-run insurance market.

Gov. Bruce Rauner, a Republican who took office in January, hasn't discussed what his approach would be if the Supreme Court rules against subsidies. Rauner spokeswoman Catherine Kelly would say only: "The governor's office will take appropriate action depending on how the Supreme Court rules."

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The Illinois Hospital Association is telling state lawmakers they "must be prepared to act quickly" if the Supreme Court decides against the subsidies, said association spokesman Danny Chun, who believes the Legislature will be postponing its adjournment for other reasons and may still be in session and able to act in June.

In Illinois, the average monthly subsidy is $210, according to the most recent federal report. That means the effect could total more than $680 million a year in lost financial help for Illinois residents.

"The loss of subsidies would be devastating for working families that rely on these subsidies for their health insurance coverage," Chun said.

Subsidies appear to be safe in states like California and Colorado that run their own insurance exchanges.

Former Illinois Gov. Pat Quinn, a Democrat, had supported a state-run insurance exchange, but was never able to get enough legislative support. A measure passed in the state Senate, but stalled in the House.

Illinois officials never thought there would be any harm to citizens by relying on the federal government to run the exchange in a partnership with the state, according to the brief signed by the Illinois attorney general and submitted to the Supreme Court.

Rauner's office apparently did not weigh in on how Illinois should side in the case.

A spokeswoman for Madigan, a Chicago Democrat whose father is the powerful speaker of the state House, said the attorney general's office "followed our standard procedure, carefully considering and reviewing the briefs in house and ultimately made the decision to sign on."

"That's no different than any other case we consider," said Natalie Bauer of the attorney general's office in an email.

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Carla K. Johnson can be reached at https://twitter.com/CarlaKJohnson

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The case is King v. Burwell, docket No. 14-114.