JULY 1, 2015

Goldwater Institute on King v. Burwell decision

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PHOENIX – The U.S. Supreme Court ruled 6-3 that financial subsidies will continue to be available to all lower-income Americans who purchase health insurance through either a state-funded health insurance exchange or the federal exchange, Healthcare.gov.

The court found that the Internal Revenue Service has the ability to broadly implement the Affordable Care Act and provide insurance subsidies in all states, even if the state has not created its own health insurance exchange. This means individuals living in states that do not operate a state-funded exchange – like Arizona – are eligible to receive subsidies for health insurance obtained through Healthcare.gov, the federal health insurance exchange. About 154,000 Arizonans are now receiving a tax subsidy to offset the cost of health insurance. These individuals will not see any interruption in their subsidies.

Naomi Lopez-Bauman, the Director of Healthcare Policy at the Goldwater Institute, issued the following statement in response to the court ruling:

“Now that we know the federal government will continue to pick up the tab for Arizonans who enroll in Affordable Care Act plans, it proves the wisdom of Arizona lawmakers’ decision not to establish a state-funded exchange. Arizona taxpayers would have been on the hook for all future exchange costs, such as marketing, in-person assistance, salaries, state employee benefit and pension costs, IT upgrades, etc. with no additional benefit to Arizonans.

One downside of this ruling is that the IRS will now be able to impose penalties on Arizona citizens not purchasing, and businesses for not providing, “qualified” and “affordable” health insurance coverage.

In many respects the original promise of the Affordable Care Act is still unmet. More people may have insurance, but the cost of insurance plans continues to rise, and waiting times to see doctors haven’t been improved.

Americans want lawmakers to pass healthcare reforms that respect taxpayers, provide for the truly needy, and address ever-rising healthcare costs. Arizona lawmakers should be preparing now for 2017, when the Affordable Care Act’s “State Innovation Waivers” become available. Arizona should ask for a waiver to offer a wider array of health insurance plans – with lower-priced options – that would better meet Arizona families’ needs and preferences. Ultimately, Arizona needs more flexibility, not more Washington-knows-best edicts, to address Arizonans’ healthcare needs.”

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