King, the Royal Pain to the Affordable Care Act
Hormones get expensive. When I first started hormone replacement therapy in 2011, I gladly paid $300 a month for my testosterone. I didn’t have insurance at the time, but I picked up additional shifts to pay the care I needed. Classes got tougher, so work was on the back burner for a little bit. At the time, insurance definitely wasn’t the answer either. I just couldn’t add another bill to the pile. I asked some of my transgender friends how they went about obtaining their “livelihood in a bottle.” One shared that she had great insurance through her job, another said that he’d been off hormones for some time. He continued to tell me that he used to buy his testosterone on the street, what some refer to as “Street T,” until his friends convinced him that it wasn’t worth the risk.
In 2010, the Affordable Care Act (ACA), also known as Obamacare, was implemented to give millions of uninsured individuals and families affordable healthcare insurance. The ACA required states to set up an “exchange” for its residents to obtain health insurance. States that didn’t create the exchange directed residents to a federally created one. Also, the Act required people to obtain coverage or pay a tax penalty unless they fell within an unaffordability exemption: either Medicaid, or an insurance subsidy. Medicaid ineligible individuals who fall within 100-400% below the federal poverty line, are eligible to receive a substantial discount on their premium thanks to the subsidy (1).
This month, the U.S. Supreme Court (SCOTUS) will be rendering their decision on King v. Burwell, a case that could strip subsidies from millions of insured individuals and families. Under the ACA’s language, insurance subsidies are available to state markets, leaving it unclear whether they are available to states running through the federal exchange. The IRS bridged the gap with regulation making the same subsidies available to federal exchange shoppers.
This is a particularly important issue for the LGBTQ community. In King, petitioners argue that the IRS regulation is unconstitutional, and therefore should not be enforced against those who sign up on the federal exchange. Why is this important? Currently, 34 states lead residents to the federal exchange. This amounts to approximately 5.5 million insured on the verge of losing their healthcare incentive (2). If SCOTUS finds the petitioners have it right, these 34 states are left to choose whether to start their own exchange, which they chose not to do in the first place, or force those with subsidized premiums to lose their government-funded discount.
According to the Center for American Progress, 1.12 million uninsured LGBTQ individuals are eligible to receive insurance subsidies (3). These subsidies help pay for much needed care such as: HIV treatment, mental health, substance abuse, and some transition-related services. If the court finds that the IRS regulation cannot extend the subsidies to the federal exchange, many newly-insured individuals will be forced to drop their insurance if they cannot pay the unsubsidized premium. Furthermore, those who cannot afford to keep their coverage will be faced with another penalty; the tax for failing to maintain coverage.
If SCOTUS rules for the petitioners, this case could just be the start to dismantling the ACA as an institution. States that have previously chosen against establishing a state exchange will likely maintain this stance, further burdening their low-income residents.
Since 2011, when I took my trip to the marketplace and became insured, I have also benefited from the ACA’s insurance subsidy. As we anxiously await the King decision, I can’t help but remember my friend who had to go to the street for the care he needed. I hope that he, and the millions of others who benefit from the ACA, can maintain their access to healthcare post-King.
by Beckham Rivera, National LGBTQ Task Force Holley Law Fellow