POLITICS

Obamacare challenge could help schools, hurt those with subsidies

Maureen Groppe, Star Washington Bureau

Instructional aides at Daleville Community Schools weren't pleased when told their hours were being reduced because of the Affordable Care Act.

The school corporation couldn't afford to buy health insurance for the approximately one-dozen teachers' assistants who met the law's definition of full-time workers. So the corporation cut their hours back to fewer than 30 a week, making the aides ineligible for employer-provided coverage.

Superintendent Paul Garrison said the assistants at least know the school system —along with 38 others in Indiana — is fighting the law in court.

"They know we care about it and wish it wasn't that way," Garrison said.

A similar challenge to the Affordable Care Act will be argued before the Supreme Court on Wednesday. A decision is expected this summer.

Those bringing the challenge say the federal tax subsidies that help people afford health insurance under the Affordable Care Act aren't valid in states — including Indiana — that opted not to establish their own online health exchanges under the law. Those states instead use the federal government's exchange at HealthCare.gov.

Impacts will differ

If the challenge is successful, school corporations and other large employers will no longer be penalized each time a full-time worker in one of those states receives a subsidy to buy health coverage on the individual market because an affordable plan isn't available at work.

But the news wouldn't be as good for Hoosiers like Laura Hays, who would no longer be able to afford health coverage without a tax credit.

"The idea of going back to where I was before is terrifying," said Hays, who suffers from endometriosis, chronic back problems and other health issues. "I've gotten to a point where I'm living my life. I'm moving forward and I don't want to lose that."

If the U.S. Supreme Court throws out the tax credits, nearly 200,000 Hoosiers could face an average increase of 271 percent in their premium costs, according to Avalere Health, a health-care consultancy.

Such a ruling also would affect Anthem, the Indianapolis-based insurance giant that's a major player in the online exchanges where the subsidized health plans are sold.

And a drop in the number of Hoosiers who could afford insurance would affect hospitals and other health-care providers in Indiana. They had anticipated that the Affordable Care Act's cuts in federal payments to hospitals would be offset by an increase in patients who could pay their bills.

"There's so much financial stability at stake," said Brian Tabor, vice president of the Indiana Hospital Association.

The case before the Supreme Court was brought by four Virginia residents with backing from the Competitive Enterprise Institute, a libertarian think tank.

Like the challenge pending in Indiana, the Virginia case argues that the Obama administration is illegally interpreting the provision in the 2010 health care law that establishes the formula for calculating a subsidy. That provision refers to insurance purchased "through an exchange established by the state."

But the law also says the federal government's exchange will be available in states that choose not to run their own. Most states, including Indiana, deferred to the federal government.

School corporations got involved in the suit because the subsidies are linked to a requirement that employers with at least 50 full-time workers offer insurance. Penalties for not doing that are triggered if a worker uses a subsidy to buy a plan on an exchange.

Indiana's challenge

So if subsidies aren't allowed on Indiana's exchange, Indiana Attorney General Greg Zoeller argues in the state's challenge, then employers can't be penalized.

Although schools already offer health insurance to most workers, the offer is not always extended to support staff, such as teachers' assistants, cafeteria workers and bus drivers.

Because the law says insurance must be offered to those who work at least 30 hours a week, the Nettle Creek School Corporation in Hagerstown reduced the hours of about 50 support staff. It wasn't possible to cover the $200,000 to $450,000 it would have cost to pay for their health insurance, said Superintendent William Doering.

"It raises my blood pressure when I talk about this," he said. "These are people who are not making much per hour as it is."

Daleville Community Schools cut the hours of about a dozen teachers' aides and hired a few more to make up some of the hours while keeping the overall cost the same.

"We have to live on the budget we have and we can't afford a significant new expense without cutting programs," Garrison said. "And cutting programs always hurts students in the long run."

Noncertified staff at the North West Hendricks School Corp. were offered health insurance before the Affordable Care Act took effect, but the coverage didn't meet the law's definition of affordable. An employee's share of the cost can't be more than 9.5 percent of household income. Unless the corporation increased aides' salaries, they wouldn't make enough.

Lacking the funding to do that, the corporation instead cut workers' hours to get them under the 30-hour threshold.

Superintendent Richard King said he was able to give the workers a small bump in pay, but that didn't make up for all the lost hours. And the aides aren't able to spend as much time with the students who need one-on-one help.

King said that when he joined the challenge to the Affordable Care Act, he knew winning the case would help his school but hurt workers receiving subsidies.

"But I didn't weigh it that much because I was representing my people and my school corporation," he said. "The bottom line was, it was hurting our students."

If the Supreme Court rules his way, the $190 monthly subsidy that reduces Hays' premium to $133 a month would go away.

An independent contractor who works as a receptionist at a psychiatrist's office, the 30-year-old Fort Wayne resident doesn't receive coverage through her job. Before subsidized coverage became available through HealthCare.gov last year, Hays would have had to spend $700 a month for insurance, about as much as she was paying in rent. Unable to afford that, Hays went without.

"I would push myself to the edge because I didn't have any insurance," she said. "I would refuse to do anything until I was in so much pain that I was in a ball on the floor crying."

The insurance she has now enables her to manage her back pain, get psychiatric care to deal with trauma from a past abusive relationship, and obtain other care.

"I feel more like myself than I have in ten years," she said. "And the subsidies are what made that possible."

Pence's response

If the Supreme Court invalidates the subsidies in states like Indiana that don't run their own exchanges, Indiana Gov. Mike Pence has said he'll stand by his decision not to create one.

The state House rejected an effort Monday by state Rep. Greg Porter, D-Indianapolis, to include language in the budget saying the state will run an exchange if the Supreme Court sides with the challengers.

"We were just trying to make sure we have a fallback," Porter said. "We'll continue to seek ways to protect Hoosiers' health care."

Tabor, of the Indiana Hospital Association, said he senses a willingness from the governor's office and others to find some kind of solution.

"It's difficult to game out because we don't know what the court will say," he said. "So while we're concerned, it just feels like there's really so many different paths that this could take."

Doering, the Nettle Creek superintendent, said the federal government should fix his situation without causing problems for someone else.

"They've got to come up with a plan that's a win-win," he said. "There is a way. I can't tell you what it is. But they have to find it."

Contact Maureen Groppe at mgroppe@gannett.com or @mgroppe on Twitter.

Indiana school corporations challenging the Affordable Care Act:

* Area 30 Career Center Education Interlocal, Greencastle, Ind.

* Benton Community School Corporation, Fowler, Ind.

* Charles A. Beard Memorial School Corporation, Knightstown, Ind.

* Cloverdale Community School Corporation, Cloverdale, Ind.

* Community School Corporation of Eastern Hancock County, Charlottesville, Ind.

* Daleville Community Schools, Daleville, Ind.

* Eastern Howard School Corporation, Greentown, Ind.

* East Porter County School Corporation, Kouts, Ind.

* Eminence Community School Corporation, Eminence, Ind.

* Fayette County School Corporation, Connersville, Ind.

* Greencastle Community School Corporation, Greencastle, Ind.

* John Glenn School Corporation, Walkerton, Ind.

* Madison Consolidated Schools, Madison, Ind.

* Metropolitan School District of Martinsville, Martinsville, Ind.

* Monroe Central School Corporation, Parker City, Ind.

* Monroe-Gregg School District, Monrovia, Ind.

* Mooresville Consolidated School Corporation, Mooresville, Ind.

* Nettle Creek School Corporation, Hagerstown, Ind.

* Northeastern Wayne School Corporation, Fountain City, Ind.

* Northwestern Consolidated School District of Shelby County, Fairland, Ind.

* Northwestern School Corporation, Kokomo, Ind.

* North Lawrence Community Schools, Bedford, Ind.

* North Putnam Community School Corporation, Bainbridge, Ind.

* North West Hendricks School Corporation, Lizton, Ind.

* Old National Trail Special Services Cooperative, Greencastle, Ind.

* Perry Central Community Schools, Leopold, Ind.

* Salem Community Schools, Salem, Ind.

* Shelby Eastern School Corporation, Fairland, Ind.

* Shelbyville Central Schools, Shelbyville, Ind.

* Southwest Parke Community School Corporation, Montezuma, Ind.

* Southwestern Jefferson County Consolidated School Corporation, Hanover, Ind.

* South Gibson School Corporation, Fort Branch, Ind.

* South Henry School Corporation, Straughn, Ind.

* South Putnam Community School Corporation, Greencastle, Ind.

* Taylor Community School Corporation, Kokomo, Ind.

* Union School Corporation, Modoc, Ind.

* Vincennes Community School Corporation, Vincennes, Ind.

* Western School Corporation, Russiaville, Ind.

* Western Wayne Schools, Pershing, Ind.