What happens if the ACA subsidies are struck down?

Millions of Americans have gotten health insurance – many for the first time ever – as a result of the Patient Protection and Affordable Care Act's coverage mandate and exchanges. However, the assistance that most get from the federal government to make those plans affordable for them are in jeopardy of being struck down by a ruling from the U.S. Supreme Court that's expected later this month, and could create a lot of problems for the insurance industry as a whole.

In all, about 6.4 million Americans would end up losing their health insurance subsidies if the Supreme Court rules in favor of King in the case of King v. Burwell, according to a report from Reuters. But beyond that, experts in the health care industry say the decision would also be a major blow for companies like hospitals, pharmacies, and even large pharmaceutical manufacturers. The resulting issues would likely cost those companies billions of dollars; some estimates say that number could reach or even exceed $15 billion altogether in 2015 alone.

A closer look at the impact
In all, the economic hit as a result of these rulings may vary, but at the end of the day about 2 in every 3 Americans affected by the decision would almost certainly discontinue coverage rather than pay more for the same plans they've had, the report said. That amounts to more than 4.26 million people who would suddenly go without, meaning that not only would they be at greater financial risk if a health care concern arises, but also insurers, big pharma, and so on would all have less money coming in because these people wouldn't be seeking regular care.

Of the $15 billion in potential losses – as estimated by the Kaiser Family Foundation – about half of that would be related to reduction in care and prescriptions being sought overall, the report said. Other estimates even exceed these numbers, though, and that could represent a major issue for consumers and care providers alike.

With a decision due in the next week or two, the health care law could get a major shakeup.

The other side of the coin
Meanwhile, those who oppose the ACA in general say that there would be some benefits, as well, the report said. A ruling in favor of King might end up saving some consumers money, for instance, as they've chosen to go without health insurance for whatever reason (many of them might not even be able to afford the heavily subsidized coverage, especially if their states did not expand Medicaid). Those people face hundreds of dollars worth of fines per year for not complying with the coverage mandate.

It may therefore be wise for health insurers to have a plan in place and ready to go in the case of either ruling coming down. While ruling in favor of Burwell would effectively not change anything, but it might still be wise for insurers to be ready to seize on the opportunity to better connect with more people that could be presented by a favorable decision.