The Supreme Court could decide this month that the financial help 6.4 million Americans receive to cover their health insurance costs are illegal — sending premium costs skyrocketing as much as 650 percent in states with some of the poorest residents.
The case, King v. Burwell, would affect people in the 36 different states that use Healthcare.gov as their marketplace. But the pain won't be felt equally, according to a new graphic from the Kaiser Family Foundation, a health-care nonprofit with a wealth of data. The real losers in a ruling against Obamacare: the states that have the most people enrolled under the law and where incomes are low.
Take Florida, for example: an estimated 1.3 million people there are currently getting Obamacare tax credits. The financial help works out, on average, to $294 per person. And if the Supreme Court decides to take those tax credits away, premiums will increase by more than threefold. On average, they'll spike 359 percent.
Contrast that with Pennsylvania, a state that tends to have higher-income enrollees who get less financial help (Obamacare tethers the size of insurance subsidies to an individual's income; people who earn less get more). There, premiums would definitely increase; they'd go up an estimated 177 percent as people there lost, on average, a $229 tax credit.
Millions will lose tax subsidies — and lots of them live in Texas, Florida, and North Carolina
The states with the most to lose in the King v. Burwell decision are those that have the most Obamacare enrollees. And these states tend to have two things in common: they have a population that is bigger and lower-income than the average state.
Florida, Texas, and North Carolina are only three of the 36 states using the federal marketplace. But taken together, their residents account for more than one-third of Americans getting tax credits through Healthcare.gov. About 2.6 million of the 6.4 million people who get financial help through the marketplace live in one of those three states. And this means a decision against Obamacare will be acutely felt in specific pockets of the United States, not evenly across the country.
Premiums could spike by as much as 650 percent
Obamacare enrollees in some states get more help than others. That's because the size of any individual's Obamacare subsidy depends on how much he or she earns. People who earn, for example, about $23,000 (200 percent of the federal poverty line) get a subsidy that would limit their premiums to 6.4 percent of their income. At most, they'd pay $126 per month.
Somebody who earns $30,000 would be expected to contribute more: they'd get a subsidy that would limit their premium for the exact same plan to $208 per month, or 8.6 percent of their income.
Obamacare's subsidy structure explains why an especially low-income state like Mississippi would see the biggest increase in premiums if the subsidies go away: their residents are getting a lot of financial help buying insurance. And without that, their premiums would rise 650 percent.
Many Mississippi residents would likely not keep their policies after the premiums went up. This would be particularly true for young and healthy people, who probably wouldn't find it valuable to pay so much more for the plan they currently have.
This sets up the classic insurance "death spiral." By putting coverage out of financial reach for so many people, it would undermine the entire purpose of the Affordable Care Act.
Interactive: see how the King decision would effect your state
The Kaiser Family Foundation graphic lets you see how the Supreme Court decision could ripple through the country and, for anyone interested in the issue, is definitely worth exploring. The nonprofit has allowed us to embed it here on our website, and you can also see it on the Kaiser website here.