PPACA and the Supreme Court:
 
Supreme Court upholds the use of taxpayer subsidies in the Federally Facilitated Marketplace (FFM)


Friends, 


 

You may have heard of the Supreme Court case of King v. Burwell in which David King (the lead plaintiff in the case) challenged that the Federal Government did not have the ability to provide tax payer subsidies through the Federally Facilitated Marketplace (FFM) to individuals and families who have annual income under 400% of the Federal Poverty Level (FPL).  David King supported his position based on the fact that the PPACA law only accounted for tax payer subsidies to be allowed in "State Facilitated Marketplaces" - not "Federally Facilitated Marketplaces (FFM)".


 

This is a 100% true and factual challenge since the wording of the law did not document the Federal Governments ability to use tax payer money for subsidies in the FFM.  You see, the Federal Government was so confident that the states would embrace the PPACA they never thought they would have to enact the FFM because they assumed all the states would establish their own "State Facilitated Marketplaces".


 

In a landmark decision today, the Supreme Court ruled 6-3 that the Federal Government does have the ability to use tax payer money for subsidies in the FFM.


 

Please see the following links for national media coverage on this historic decision:


 


 

Why this decision is not surprising

 

We at Altruis would have been very surprised if the Supreme Court decided to rule in favor of the Plaintiff, David King, in this case - here is why...


 

Back in June of 2012, the Supreme Court was deliberating over the constitutionality of the PPACA and whether the Federal Government had the ability to "force the citizens into commerce", amongst other criteria.  The PPACA law was originally written to include penalty "fees" to those who did not enroll in health insurance either by Medicare, Medicaid, or Private Insurance.  The challenge to PPACA back then was that it was unconstitutional for the Federal Government to force it's citizens into commerce based on financial penalties not defined as a tax.  The surprising thing in July of 2012 is the the Supreme Court agreed that the Federal Government could not do this.


 

What was even more surprising about the decision on June 28th, 2012 is that rather than deem the PPACA "unconstitutional" based on its actual content the Supreme Court changed the wording of the law from a "fee" to a "tax" and basically said - "OK, we can't allow you to charge a fee for non-compliance here but we can allow you to apply a tax for non-compliance". 


 

And, as a result of the Supreme Courts decision to change the wording of a law they were deliberating over, the PPACA was deemed constitutional.


 

Our Opinion...

 

When we take into consideration the information detailed above, we at Altruis Benefit Consulting were very confident that the Supreme Court would rule in favor of the defendant, Sylvia Matthews Burwell (who is the new Secretary of Health and Human Services).  Those who are in favor of the PPACA are happy today because the law has dodged another bullet and will remain in tact for the foreseeable future.  In addition, those who could not afford health insurance prior to the PPACA will continue to get tax payer assistance to help pay for their health insurance.


 

For those who oppose the PPACA, there is alot of "head scratching" going on right now and justifiably so.  This is now the second time the Supreme Court has ignored the specific wording of the law and chosen to modify it in under deliberation in order to keep it in effect.  We know that the total cost of the law has eclipsed $2 Trillion dollars to date (yes, that is Trillions with a "T") and those who oppose the law believe that a better system could have been put into place using far less taxpayer money.


 

From our perspective as advisors who live, eat, breathe, and sleep PPACA - the removal of tax subsidies from the FFM would have been an absolute disaster because there was really no back-up plan from the Federal Government or Congress.  This would put millions of people in a situation where they could, once again, not afford to purchase health insurance.  That being said, we (and you, our valued clients) have watched as the rates for individual and family health insurance have jumped between 70% and 100% in the state of Michigan as a result of the PPACA and it's many taxes, fees, and regulations.  We have no evidence to date that leads us to believe this trend will not continue on an upward path. 


 


 

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