Subsidized Health Coverage in Pennsylvania & New Jersey at Issue in U.S. Supreme Court Case

The U.S. Supreme Court is slated to hear arguments Wednesday in a major challenge to President Barack Obama's hallmark health care law.

The case, King vs. Burwell, challenges one of the law's key provisions: subsidies that make coverage affordable for millions of people who buy insurance through the 34 federally run marketplaces, including those in Pennsylvania and New Jersey.

The suit alleges that the Affordable Care Act's subsidy provision applies only to people in state-run marketplaces. Lisa McElroy, a law professor at Drexel University, said the government counters that such a literal interpretation would dismantle the ACA.

"If you get rid of the ability of all these people to get their subsidies, they're not going to be able to buy the insurance and the ACA will crash," she said.

If the court favors the plaintiff, about a quarter-million people in New Jersey could lose coverage, according to Raymond Castro with New Jersey Policy Perspective.

"It's going to have a huge effect," said Castro. "Among those folks who are going to lose their insurance, many of them are in the middle of treatment."

Pennsylvania also has a federally run marketplace, with an estimated 200,000 people currently qualifying for subsidies to buy insurance. In an emailed statement, Gov. Tom Wolf's office stated that "regardless of any action taken by the Supreme Court, the administration is working with the federal government and foundations to make sure that a state-based exchange is an option for Pennsylvania."

Delaware's situation may be a little different because it's one of seven states that runs its marketplace in partnership with the federal government. Unlike the majority of states with federal marketplaces, Delaware wants to be involved in the oversight, though it still uses the federal IT platform. Delaware leaders are reviewing how the lawsuit could affect the state.

"We feel we've been behaving similar to a state-based marketplace," said Health and Social Services Secretary Rita Landgraf. "I think it would be a disservice to the 25,000 individuals who have purchased on the marketplace here in Delaware, for them to not have access to the subsidies."

About four in five people with coverage through the marketplace have qualified for subsidies.

The court is expected to announce a decision by late June.

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