King vs. Burwell: What’s at stake?

By Linda J. Blumberg and John Holahan and Matthew Buettgens  ::  March 2nd, 2015


On March 4, the Supreme Court will hear arguments in the King vs. Burwell case, a challenge to the Affordable Care Act that could drastically alter the course of the Obama administration’s landmark law. The plaintiff argues that the law prohibits residents of states without state-run health insurance marketplaces (also called exchanges) from receiving federal tax credits and cost-sharing reductions, while the government argues that this is a misreading of the statute. A ruling in favor of King could derail many of the ACA’s gains in states where the federal government has played a role in running the new nongroup exchanges.

We estimated the implications for coverage, premiums, household financial burdens, and medical spending if tax credits and cost-sharing reductions are eliminated.

  • What could happen to coverage and premiums in a ruling for the plaintiff? An estimated 8.2 million people would lose insurance coverage—a 44 percent increase in the number uninsured. A King victory would eliminate billions in tax credits and cost-sharing reductions in the 34 affected states, decreasing affordability and coverage. With healthier, lower cost people leaving the market and remaining individuals shifting into less comprehensive coverage, the average nongroup premium would be 35 percent higher than under the law as currently implemented. In this scenario, the nongroup market would cover far fewer people than it would have had the ACA never been implemented.
  • Who could lose insurance?  An estimated 9.3 million people would lose tax credits, two-thirds of whom would become uninsured. More than 60 percent of those who would lose insurance are white, non-Hispanic; more than 60 percent live in the south, and more than 80 percent are low- and middle-income, but not poor. In order to keep the coverage they would have under current rules, individuals and families would have to pay substantially more—and most would choose not to. Furthermore, without tax credits and facing very high premiums, fewer parents would seek marketplace coverage, at the same time missing an opportunity for their children to be screened for and enrolled in public insurance.
  • What could happen to medical spending for the uninsured? Hospital, physician, prescription drug, and all other medical service spending for the uninsured would decrease by 35 percent—and possibly even more. Health care spending in 2016 for those losing coverage would fall from $27.1 billion to $5.3 billion paid by the uninsured and up to $12 billion in uncompensated care, with actual level of spending dependent upon whether government and providers continue to contribute to uncompensated care at historic rates. The decrease in expenditures would adversely affect the amount of health care received by those losing coverage and health care providers’ revenues.

Unlike regulatory changes that could take years to go into effect, eliminating financial assistance would make coverage unaffordable to those affected immediately and would cause tremendous disruption in private nongroup insurance markets.

Photo by Ringo H.W. Chiu/AP

A preservation strategy will help DC meet affordable housing needs

By Peter Tatian  ::  March 2nd, 2015

                                     Washington, DC is one of the most expensive places in the country to live. As many low-income residents continue to face challenges in finding affordable housing, the new city administration, led by Mayor Muriel Bowser, has emphasized the necessity of preserving existing affordable housing and building new affordable units to help meet those needs. [...]

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The mortgage market can tolerate twice as much credit risk

By Wei Li and Wei Li and Laurie Goodman  ::  March 2nd, 2015

The Housing Finance Policy Center in December introduced a new measure of mortgage credit availability—the Credit Availability Index or HCAI. Today, we are releasing the results of our most recent HCAI analysis on loans made during the first three quarters of 2014. The HCAI measures the amount of default risk taken by the mortgage market [...]

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Bipartisan support emerges for expanding apprenticeship

By Robert Lerman  ::  February 27th, 2015

Republican and Democratic leaders have long agreed on the goals of expanding economic opportunity and upward mobility and of rapid economic growth. Now, both sides are finding common ground on one of the best means to achieving these goals—expanding apprenticeships. This week, Senators Cory Booker (D-New Jersey) and Tim Scott (R-South Carolina) introduced a bill [...]

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Many eligible SNAP beneficiaries are tripped up by bureaucratic hurdles

By Matthew Johnson  ::  February 26th, 2015

Many low-income adults and families entitled to food assistance are mistakenly disconnected from the Supplement Nutrition Assistance Program (SNAP) because of trouble navigating bureaucratic requirements, said Urban Institute Senior Fellow Greg Mills to the House Agriculture Nutrition Subcommittee on Thursday. The financial consequences cost both the government and the affected beneficiaries, he added. “Agencies incur [...]

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Does trading sex define who you are?

By Mitchyll Mora  ::  February 26th, 2015

In our recently released study, “Surviving the Streets of New York: Experiences of LGBTQ Youth, YMSM and YWSW Engaged in Survival Sex,” Urban Institute researchers trained youth from Streetwise and Safe to interview young people about their experiences engaging in survival sex. The lead youth researcher, Mitchyll Mora, offered to share his perspective on working [...]

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Three charts that explain the renters next door

By Taz George  ::  February 26th, 2015

One of the unexpected legacies of the mortgage crisis has been the replacement in many neighborhoods of single-family homeowners with renters. But who exactly are these renters and which homes are they renting? We’ve taken a closer look at the 14.2 million single-family rental units in the US today and found that renters are living [...]

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Surviving the streets of New York

By Meredith Dank  ::  February 25th, 2015

Our release today of the first-ever study on LGBTQ youth who trade sex in order to meet basic survival needs coincides with one of the coldest winters on record. Although the winter of 2012 wasn’t as brutal as this one, it was still cold enough to chill you to the bone in places like New [...]

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New interactive tool shows impact of various changes on FHA refinance volume

By Karan Kaul and Laurie Goodman and Jun Zhu  ::  February 25th, 2015

We recently estimated that roughly 2.4 million current Federal Housing Administration (FHA) borrowers could benefit from refinancing under the agency’s reduced Mortgage Insurance Premiums (MIP). The number of borrowers that could benefit, however, would go up or down depending on the mortgage rate. When we published the original blog post, rates for 30-year fixed-rate mortgages [...]

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