‘Death spiral’ for insurance system weighed in Supreme Court case

Categories: Latest News

March 7, 2015

Demonstrators gather outside Supreme Court building in Washington as justices hear challenge to health care law

Demonstrators gather outside the U.S. Supreme Court building in Washington as the justices inside hear oral arguments in a legal challenge to the federal Affordable Care Act. The court agreed to take a case challenging the federal subsidies that help people in 34 states pay for mandated health care coverage. (CNS photo/Jonathan Ernst, Reuters)

WASHINGTON (CNS) — Several Supreme Court justices wondered aloud at oral arguments March 4 whether a ruling against the Affordable Care Act’s subsidies to millions of lower income Americans would lead to a “death spiral” for the health insurance program.

“We’re going to have the death spiral that this system was created to avoid,” said Justice Sonia Sotomayor, if the court were to rule in King v. Burwell against the practice of providing subsidies to some participants in insurance programs in states that failed to set up their own insurance exchanges and use the federal system.

The death spiral line of reasoning is one cited by the Catholic Health Association, among others, who argue in “amicus” or friend-of-the-court briefs that if the subsidies are withdrawn, millions of people will no longer be able to afford insurance and won’t buy it. Although they would then be subject to fines for not having coverage, the insurance industry itself would be forced to raise prices dramatically, because so many healthy people would no longer be in the risk pool. And uninsured poor people will go back to seeking treatment in the most expensive places, the brief added.

Read more in The Visitor…