The Obama administration gave conditional approval Monday to Arkansas, Delaware and Pennsylvania to expand their roles in the insurance marketplaces created under the 2010 health care law, ahead of a high court decision that could wipe out federal health insurance subsidies for millions.
Letters from U.S. Health and Human Services Secretary Sylvia Burwell to Pennsylvania Gov. Tom Wolf and Delaware Gov. Jack Markell, both Democrats, and Arkansas Republican Gov. Asa Hutchinson say the approval reflects the expectation that the states' roles in the marketplaces will expand beginning in the 2016 policy year.
Right now, the federal government operates the marketplaces in about three dozen states, including Pennsylvania, while some states, including Delaware and Arkansas, are in charge of some functions. But plaintiffs in a lawsuit before the U.S. Supreme Court say the Obama administration is unlawfully providing subsidies to millions who buy insurance through the federally run marketplaces. If the court agrees, it could mean the end of the subsidies to most or all of those states.
Conversely, federal subsidies could continue to flow to states that run their own marketplaces, keeping insurance premiums lower. That is what helped compelled the applications by Delaware and Pennsylvania.