Don’t stick Iowans with subsidies’ cost

Many Iowans have obtained health coverage under the Affordable Care Act, and many more will be signing up for plans in the coming days. For roughly 25,000 Iowans thus far, such insurance would not be possible without a federal premium subsidy.

Because the legality of those subsidies within states, such as Iowa, that have not set up their own health care exchange has been questioned by a case before the U.S. Supreme Court, it is possible these Iowans, under threat of penalty, have agreed to insurance coverage beyond their immediate economic means.

This summer, federal appellate judges issued contradictory rulings on whether the ACA was written in a way that prevents subsidizing of insurance plans not purchased on state-run exchanges, which brought the issue before the Supreme Court. Iowa is one of 34 states that chose not to set up its own exchange, allowing residents to purchase plans through the federal offering.

The vast majority of Iowans using the system - roughly 25,000 of the 30,000 plans - reported income levels that qualified for federal subsidy of premiums. Such subsidies have been estimated at an average of $2,900 per year, per plan.

If the court decides subsidies paid on plans purchased through the federal exchange are not allowed under the ACA, costs could revert to the individuals who purchased policies in good faith.

Likewise, if the court should negatively impact tax credits provided to businesses that purchased policies on the federal exchange, the state should ensure those businesses are not liable for outstanding differences.

Since a hastily crafted health care reform law is primarily at issue within this debate, we do not believe a hastily crafted state exchange is the answer - especially since open enrollment already has begun for 2015. Nor does it seem likely, given the fact that lawmakers and executives allowed partisan differences to block progress on earlier creation of an state-run exchange.

Regardless, collateral damage is an unacceptable outcome for low-income Iowans unduly saddled with poorly crafted federal legislation and state-based partisan gridlock.

Come what may from the Supreme Court justices, the state should embrace its obligation to our most vulnerable and guarantee all federal subsidies for health care coverage will not result in out-of-pocket expenses for purchasers.

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