Adverse subsidies ruling would pummel small businesses

Adverse subsidies ruling would pummel small businesses

Supreme Court 600x338Should the U.S. Supreme Court ruling in King v. Burwell go against the Obama administration, the fallout will hit small businesses especially hard.

This is what Linda Blumberg, senior fellow at the Urban Institute, planned to tell a U.S. Senate committee today, according to the news portal The Hill.

While 7.5 million will likely lose insurance subsidies if the court rules that subsidies are illegal, premiums will jump substantially for 3.5 million individuals and families employed by small businesses, Blumberg’s testimony said.

That’s mainly because those who depend upon a subsidy for obtaining insurance through a state-run exchange will probably drop coverage if they are healthy. This effect will disrupt the insurance markets, sending premiums upward for all, including those in small businesses.

The Hill said the committee’s chair, U.S. Sen. David Vitter (R-La.), agreed with Blumberg, but said there are alternatives being considered that would accomplish virtually the same outcome as the subsidy to consumers, including “an advanceable tax credit that actually flows directly from the government into the pockets of the insurance company, not into the hands of the consumer.”

The hearing at which Blumberg is schedule to testify was convened, Vitter told The Hill, to “help those who may be caught in the lurch if the Court sides with the plaintiff and throws down the gauntlet to the administration.”