Three Financial Facts of the Week: January 19, 2016

Provided by Tech Media Street

Fact #1
The average finance rate on 48-month new-car loans was just 4.1% through August 2015, according to the Federal Reserve. The rate exceeded 6% as recently as 2010.
Source: Wall Street Journal

Fact #2
Roughly 20% of people under age 65 with health insurance still reported having problems paying their medical bills over the last year, according to a new poll conducted by the Kaiser Family Foundation.
Source: New York Times

Fact #3
Today, about 2.5 billion people are registered to use at least one messaging app, according to advisory firm Activate. By 2018, the firm expects that number to be 3.6 billion, 90% of the world’s internet-enabled population.
Source: Wall Street Journal

What the Obamacare Court Ruling Means for Consumers

© webphotographeer/Getty Images
© webphotographeer/Getty Images

Millions of Americans just got to keep their health insurance, as the Supreme Court ruled earlier today in a 6-3 decision for the government in the  King v. Burwell Obamacare case.

The case considered the highly anticipated challenge to whether the IRS can issue insurance subsidies for individuals enrolled on the Affordable Care Act federal exchange. In doing so, the Court upheld President Obama’s signature achievement for the second time, allowing the law to escape what many viewed as a potential disaster.

In the words of Tim Westmoreland, a law professor at Georgetown, the latest challenge to the Affordable Care Act has ended in one big case of “never mind.”

The lawsuit focused on specific language from the Affordable Care Act’s Definitions section, which says that subsidies shall be made available to individuals who enroll in exchanges “established by the state.” Under the plaintiff’s plain-meaning argument, this word choice should preclude subsidies for anyone except those enrolled on state-based insurance exchanges, specifically the federal exchange

The Court rejected this interpretation, along with the plaintiff’s argument that this language was built into the law intentionally to coerce states into setting up their own exchanges at the risk of losing access to federal subsidies.

The coercion argument, Westmoreland said, was particularly weak.

“Other than some highly rhetorical comments by Johnathan Gruber, I know of nothing that would suggest that Congress intended to do that,” he said. “The idea that they would put a gun to the states heads on page 113 in the Definitions section is just nuts… It’s in the definition of the term ‘coverage month.’ Who would ever look there to find the doomsday machine?”

According to research by the Kaiser Foundation, at stake in this decision were subsidies for more than 6.3 million people across the 34 states that haven’t set up their own exchanges. Many health care experts, wuch as the Urban Institute’s Matt Buettgens, predicted nightmare scenarios for the insurance marketplace at large in the wake of an adverse ruling. He suggested that the fallout from such a decision would have left more than 8 million people uninsured.

“We could see drastically decreased enrollment, and those remaining enrolled could see a much higher cost than average,” he said, speaking before today’s ruling on a possible adverse decision. “We could see large increases in costs of premiums, and because we would see many more people uninsured we would also then see much more uncompensated care that federal and state governments would end up paying for.”

“There are examples of premium death spirals that have actually occurred,” Buettgens added. “This would be an accelerated version of that because most of the enrollees would be hit immediately with increases once their tax subsidies go away, so that would jump start the process.”

Today’s ruling for the government will leave the system more or less in place, allowing subsidies to continue uninterrupted for enrollees on the federal exchange.

For the time being, it looks as though this may end the significant legal challenges to Obamacare, said Westmoreland of Georgetown. The only outstanding issue is a case challenging the constitutionality of the Independent Payment Advisory Board, which is unlikely to proceed due to the fact that the Board has not yet made any decisions.

Westmoreland cautioned about over-confidence on the part of the Obama Administration, however, pointing out that few in the legal community foresaw the potential significance of King either.

Written by Eric Reed of The Street

(Source: The Street)