Are You Ready for This Massive Obamacare Threat?

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A Kaiser Family Foundation poll this month found that, despite heavy media attention, many Americans are unaware of an upcoming Supreme Court decision that could jeopardize the subsidies millions of Americans use to pay for health insurance through Obamacare.

The Supreme Court is slated to announce its decision in King v. Burwell later this month. Should the justices side with the plaintiffs, it could send monthly premium payments soaring and potentially derail profit at major health insurers.

Americans in the darkThe Kaiser survey found that 44% of Americans knew nothing at all about the looming Supreme Court decision. Another 28% had heard "only a little" about the case, while only 13% reported knowing "a lot" about King v. Burwell.

At the heart of this case is language in the Affordable Care Act that seems to limit subsidies to people living within the 13states that have established state health insurance exchanges. A high court ruling supporting the plaintiffs' position means subsidy payments are illegal for Americans living in the 37 states that use the federal healthcare.gov exchange instead of their own marketplace.

When asked what should happen if the Supreme Court does away with subsidies, 63% of respondents to the Kaiser survey said Congress should take action to correct the language and reinstate them, while 26% said Congress should take no action. Those responses were pretty much along partisan lines, with Democrats and independents favoring action and Republicans against a congressional fix to the situation.

What's at stakeAccording to the Department of Health and Human Services, as of March 31, 11.7 million people had signed up for health insurance through the various health insurance exchanges, and 10.2 million people had made their first payment on that coverage.

Of those 10.2 million people, roughly 85% of them were getting at least some relief in their premiums via subsidies,including 6.3 million people who signed up for coverage through healthcare.gov. Those subsidies are awarded on a sliding scale based on household income relative to the federal poverty level, or FPL. Overall, family earnings that are between 100% and 400% of the FPL qualify for subsidized health insurance coverage.

In 2014, the average monthly premium payment for someone receiving subsidized coverage was $82. Absent that subsidy, the monthly premium payment would surge to nearly $350. In 2015, subsidies appear to be similar as the Department of Health and Human Services reported that the average subsidy totals $272 per month.

If those subsidies are eliminated for those signing up on the federal exchange, then the resulting, much higher monthly payment would likely be a deal breaker for most of these low and middle-income families, causing many to cancel their plans, That, in turn, would drive down revenue at insurers.

Looking aheadAmericans' view of the Affordable Care Act remains mixed, with 39% having a favorable view, 42% having an unfavorable view, 19% not knowing how they feel about it. However, it's likely sentiment could change pretty dramatically if the Supreme Court votes in favor of the plaintiffs who oppose Obamacare.

Regardless, it's unclear what -- if any -- action will be taken to reinstate subsidies if they're eliminated. That means Americans and healthcare investors ought to be watching the Supreme Court closely this month for a decision that could cause monthly premiums to spike and effectively erase billions of dollars in annual premium revenue.

The article Are You Ready for This Massive Obamacare Threat? originally appeared on Fool.com.

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