Landmark King v. Burwell ruling: Industry reacts, looks to future

The Supreme Court released its long-awaited opinion on King v. Burwell this morning in a 6-3 vote to uphold the Affordable Care Act's federal subsidies.

"The ruling in favor of the Obama administration means that payers can avoid the death spiral," Jason McGorman, Bloomberg Intelligence Health Care Industry analyst, told FierceHealthPayer in an exclusive interview this morning. "It really creates stability for insurers."

The ruling not only prevents a health insurance "death spiral" but also allows insurers and patients alike to focus on open enrollment for 2016, other experts told FierceHealthPayer in interviews this morning. 

[RELATED: Supreme Court upholds ACA's federal subsidies 6-3] 

What the ruling said

Chief Justice John Roberts, who delivered the opinion, wrote "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress's plan, and that is the reading we adopt."

The opinion ruled on the context of the entire statute and the intent of Congress, Anne Phelps, head of health regulatory practice at Deloitte, told FierceHealthPayer. "Based on Roberts' opinion, it was clear that subsidies were legal. The Court did not look beyond the statute, nor did they need Chevron deference"--a principle of administrative law that requires courts to defer to interpretations of statutes made by those government agencies charged with enforcing them, unless such interpretations are unreasonable.

What the ruling means for payers

During the oral arguments back in March, Justice Sonia Sotomayor reiterated a point Justice Stephen Breyer made (both of them voted with the majority in the King v. Burwell ruling): If subsidies are struck down, "we're going to have the death spiral that this system was created to avoid. Insurers are obligated to make sure that, in their states, they guarantee coverage, and that they base their costs on community ratings."

Insurers submitted their 2016 premium rate proposals back in May--but as Phelps pointed out, insurers have until August to revise their bids. However, the opinion issued today most likely means insurers won't have to revise their proposals.

What comes after King v. Burwell

"Today's decision resolved a critical question: Now that tax credits remain, we know our landscape and can look ahead with respect to the health insurance exchanges," Phelps said.

With respect to the recent insurer merger rumors and wrangling, "the ruling doesn't change the fact that these mergers may still happen," McGorman said. "Insurers want to continue to expand their businesses; there's going to be some more back-and-forth between Cigna and Anthem." 

Ultimately, the ruling cements the ACA--and President Barack Obama's legacy. But now it's time to transition to other areas of concern, noted McGorman, such as paying for value instead of volume.

"We have to continue to hopefully bend healthcare's cost curb; it's not longer about getting Americans insured."

What Obama said

Late this morning, Obama issued remarks about the decision from the Rose Garden.

Healthcare is not a privilege for a few but a right for all," Obama said. "There's no doubt the law is working. Today, after more than 50 votes in Congress to repeal this law, the ACA is here to stay. This morning, the Court upheld a critical part of this law. For many, insurance would have become unaffordable again. Ultimately, everyone's premiums would have gone up. America would have gone backwards. So, today is a victory for hardworking Americans.