What a Supreme Court ruling could mean for your health insurance rates

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INDIANAPOLIS (June 22, 2015) – All eyes are on the United States Supreme Court as a major decision looms that could impact hundreds of thousands of Hoosiers.

Experts say the consequences are potentially far-reaching, from insurance premiums to the economy.

The case centers on the Affordable Care Act and subsidies that millions of Americans are receiving to help pay for their health insurance.

At issue is whether residents in Indiana and dozens of other states, that opted out of creating a state exchange, are no longer eligible for subsidies.

“It’s a very big deal for a lot of reason,” John Ketzenberger said, president of the Indiana Fiscal Policy Institute.

Nationwide nearly 6.5 million Americans could be affected.

In Indiana, an analysis by the Kaiser Family Foundation found at least 160,000 low and middle-income Hoosiers could instantly lose their subsidies if the court finds them illegal. The report estimates $51 million in subsidies are distributed each month to Hoosiers, averaging $320 per resident.

“It’s not could, it’s will,” Ketzenberger said. “If it comes in against the exchanges, it will have a negative effect on the insurance industry in the country.”

Experts say that would impact every American paying for health insurance.

The fear is that millions of Americans would quickly drop their coverage and that premiums for everyone else would then by default skyrocket. The Kaiser Family Foundation analysis estimated the average premium in Indiana would jump 271 percent.

“Obviously we have to have a mechanism to pay for the claims that come in,” Susan Rider said, the national media chair for the National Association of Health Underwriters, as well as an account executive with Gregory & Appel Insurance in Indianapolis.

"Concerns will increase over the coming months that we may see a large exodus from the insurance market that leaves the government marketplace with primarily the adverse selection cases that could lead to further rising costs," Rider wrote in an analysis.

Congress and states like Indiana have yet to lay out a plan if the court rules against the subsidies, leaving even more uncertainty as the decision looms.

“I’d feel a lot better about things if the state said OK, if this is illegal as we argue it is, then there is some kind of backstop,” Ketzenberger said. “Because absent that, the ramifications are pretty hard on individual Hoosiers, their families and possibly the economy.”

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