The Supreme Court heard oral arguments recently in the King v. Burwell case, and a lot is riding on the outcome, especially for Maine. The court will be deciding on whether Congress intended the Affordable Care Act (ACA) to provide subsidies to states like Maine that did not set up their own health insurance exchanges. If the court decides in favor of King and the other plaintiffs, exchange-enrolled Mainers now receiving subsidies to help afford coverage will lose them. Nine out of ten Mainers on the exchange qualify for a subsidy.
There’s a special reason why Maine relies so heavily on exchange subsidies: Maine’s self-employment rate is much higher than the national average. Until health care reform, the self-employed faced high barriers to affordable insurance coverage. It’s little understood that most insured people in the U.S. enjoy some form of subsidy – not only people newly insured on the exchange. Senior citizens have Medicare – a federally subsidized program. Workers employed by large or generous companies that offer company health plans are also subsidized – not just because their employer often contributes some portion of their premium, but also by tax law, which shields the portion of one’s compensation paid as health insurance from taxes. “Job lock” is the term applied to the resulting phenomenon: pre-health reform, too afraid to leave the security of a job that provided health insurance, more and more Americans were staying put – rather than going out on their own and starting new, small companies. The introduction of subsidized policies on the exchange, with subsidies tied to one’s income, gave the self-employed a more level playing field.
This is good policy, because self-employment, and the resulting innovation, is key to the health of the American economy. As all schoolchildren learn, the Wright Brothers were self-employed. John D. Rockefeller worked as a clerk until he started his own company a few months before his twentieth birthday. Steve Jobs started Apple in a bedroom while freelancing at Atari.
But there’s a special angle to self-employment in Maine. The towns with the highest percent of residents covered through the exchange are also towns with high rates of self-employed lobstermen. The island town of North Haven leads the state for the percentage of non-elderly residents covered through the exchange. Nearly a third of all North Haven residents are insured through the exchange. This is testament to the outreach by the Maine Lobstermen’s Association and other navigators and assisters working tirelessly up and down Maine’s coast over the past two years.
It’s hard to imagine how big business could do a better job bringing in lobster than our independent, self-employed Maine lobstermen. Lobstermen also keep more of their money in their pockets by not subsidizing a CEO. Maine lobstermen are famous for their good stewardship of the resource, and for their self-regulation. However, pre-health reform, forty percent of lobstermen were uninsured. Plainly put, King v. Burwell threatens to strip these newly insured working Mainers of their health insurance as early as mid-summer.
Health reform is working for Maine. This is why Attorney General Janet Mills has filed a brief on behalf of Maine, along with twenty-one other states, urging the Court to uphold the subsidies. King, a Virginia man who already has access to health coverage through the VA, is just the named plaintiff in the case. Another plaintiff, Brenda Levy, told a reporter that she looked forward to attending oral arguments – that it would be an “adventure, like going to Paris!” But when pressed on the implications of the case, she seemed perplexed – or maybe remorseful. “I don’t want things to be more difficult for people,” Levy said. “I don’t like the idea of throwing people off their health insurance.” She’s right – the consequences of a King victory would be far-reaching and catastrophic for many working Americans. Given the risks to families and the economy, it’s hard to see how anyone would root for millions of Americans – including tens of thousands of Mainers – to lose their coverage.