Eliminating tax subsidies available to low- and middle-income people under the Patient Protection and Affordable Care Act would reduce enrollment on the individual market and increase premiums, according to a recent RAND study.
If subsidies under the PPACA were eliminated, insurance enrollment would drop by nearly 70 percent due to consumers being unable to afford coverage without financial assistance, according to the study.
PPACA subsidies are a highly contentious issue, with two appellate courts recently issuing conflicting decisions on whether subsidies to help pay for insurance plans are available in all states, including those that did not set up their own health insurance exchanges.
The PPACA states tax subsidies for health insurance are to be provided "through an exchange established by the state." Based on the text of the law, lawsuits were filed challenging an IRS regulation that allows subsidies to be issued in all states.
On July 22, a divided three-judge panel of the D.C. Circuit Court of Appeals ruled tax subsidies may not be provided in states that did not establish their own exchanges. However, just two hours after the ruling was made, a three-judge panel from the Fourth U.S. Circuit Court of Appeals unanimously held low- and middle-income Americans in all states can legally receive subsidies for health insurance under the PPACA.
In August, the Obama administration requested a rehearing of the D.C. Circuit case, and in September, the appeals court agreed to vacate its ruling and allow the case to be reheard by the full D.C. Circuit.
More articles on the PPACA:
Case striking down PPACA subsidies to be reheard: 10 things to know
7 healthcare controversies to watch for Midterms 2014
The changing healthcare world: 7 trends to watch