Five Republican State Governors Are Skeptical About Rescuing Obamacare

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As the US Supreme Court begins a hearing of the case King v. Burwell on March 4, challenging tax-credit subsidies, President Obama’s Affordable Care Act (ACA), will once again be subject to further evaluation. If the court rules against critical sections of the ACA, it could well mean that American citizens will be paying more to remain covered by health insurance.

Moreover, state governors of five Republican States have also reiterated that they will not be part of rescue operations to assist President Obama if the court strikes down critical parts of the Act.

This is the second time that the ACA is being challenged in courts. The earlier claim was in 2012, when judges ruled that the claim was unconstitutional.

The ruling on King v. Burwell is expected in June 2015, and holds bearing on the future of the ACA. The ruling could well strike-down subsidies by the federal insurance marketplace in over 34 states.

Reuters reports that nearly five of the Republican state governors will desist from creating a local exchange to ensure subsidies continue to flow. This is in line with Republican arguments that the new medical care act pushes the government into the middle of the healthcare issue, besides raising the costs of the entire system for businesses and consumers.

The ACA’s effectiveness lies in the creation of state-exchanges to support subsidies, but is strongly opposed by most Republican states as it means additional costs as well as responsibility for the states, besides an additional burden of a new bureaucratic program.

As more states do not agree to the creation of the exchange, and some like Arkansas will create it only by 2017, the implications of the ruling by the Supreme Court in June will be crucial to the lower-income population in Republican states.

However, Congress is expected to negate an adverse ruling by the Supreme Court with legislation.

But, the gridlock with some states participating in state-exchanges while others do not does hold a challenge for President Obama, besides long-term political implications.

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.
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