Paul L. Caron

Monday, November 24, 2014

Grewal: How King v. Burwell Jeopardizes the 2014-15 ACA Enrollment Season

Andy Grewal (Iowa), How King v. Burwell Jeopardizes the 2014-2015 ACA Enrollment Season:

Commentators have expressed concern that a government loss in King v. Burwell, which addresses whether taxpayers can enjoy tax credits for policies purchased on federal exchanges, will lead to a "death spiral." Because consumers will no longer enjoy tax credits, they would stay away from the federal exchanges, which would lead to higher prices, which would discourage more consumers, and so on.

This discussion threatens to mask the potential tax problems facing persons who have already purchased policies or who will purchase policies this year. Although the Treasury can let consumers who got tax credits in the last cycle keep their credits, the Treasury lacks the authority to protect tax credits for consumers in the 2014-2015 cycle. This short article explains and hopes for a legislative fix to the hardships that would be created by a government loss in King v. Burwell.

Scholarship, Tax | Permalink