AHA files brief in support of maintaining insurance subsidies

The American Hospital Association (AHA) filed an often scorching amicus brief with the U.S. 4th Circuit of Appeals, arguing to keep tax subsidies in place for individuals who purchase coverage on the federal health insurance exchange, AHA News Now reported.

The case, King v. Sebelius, raises the question as to whether individuals are entitled to tax subsidies if they live in states that do not operate their own health benefits exchanges. Thirty-four states have declined to operate their own exchanges, allowing the federal government to do so instead. The Accountable Care Act's (ACA) language specifically says that the tax only applies when the state operates the exchange, according to opponents of the law.

Forbes reported in a recent opinion article that the plaintiffs in the King and related cases argue that the use of both a tax penalty for employers that do not provide coverage and a tax subsidy for individuals amounts to a tax that Congress did not properly authorize. 

If the plaintiffs in that case and others related to it prevail, it could prove disastrous to hospitals in states that do not operate their own exchanges, cutting off millions from obtaining affordable insurance.

The AHA argued in its brief that its hospitals provided $41.1 billion in uncompensated care in 2011 and a total of $367 billion in uncompensated care since 2000.

"Plaintiffs' position would cause hospitals to shoulder an even greater burden, requiring them to furnish similar amounts of uncompensated care while at the same time losing billions in government support," a portion of the brief read.

Hospitals that encourage more people to purchase insurance already have an uphill battle, with data strongly suggesting many consumers are unaware of the subsidies that are available to them.

The AHA also deeply criticized the plaintiff's interpretation of the ACA, calling it "myopic" and asserting that it deliberately distorts the intent of the lawmakers, which is to ensure that a wide swath of the country had an opportunity to obtain affordable health insurance.

"Plaintiffs' statutory snippets and inconclusive canons cannot overcome that overarching statutory purpose, enacted throughout the ACA's many interlocking provisions," the brief read.

To learn more:
- read the AHA News Now article
- here's the brief (.pdf)
- check out the Forbes opinion article

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