Online health insurance marketplaces are central parts of the Affordable Care Act. And HealthCare.gov, the federally run exchange, is where 27-year-old Kathryn Ryan, a restaurant server in Philadelphia, turned for health coverage, as soon as the law took effect.
"I was excited because if it weren't for Obamacare, I wouldn't be insured at all," she says. "I wouldn't have the ability to go to the doctor."
She can afford health insurance thanks to a $200 a month subsidy that brings her premium down to $60 a month.
Ryan, who's also studying social work, is one of nearly 400,000 Pennsylvanians who have qualified for income-based financial assistance. But like a lot of people, she had no idea that a case before the Supreme Court puts at risk the subsidies in states like Pennsylvania that rely on the federally run exchange.
"You telling me this is, like my heart has sank a bit to the bottom of my stomach, because I was planning on keeping this insurance until I am gainfully employed with an agency that offers benefits," she says.
The reasons Ryan's subsidy and those going to millions of other people nationwide are in jeopardy has to do with a lawsuit before the Supreme Court.
The plaintiffs in the case argue that only those with coverage in state-based marketplaces are eligible for subsidies. If the Supreme Court agrees, Trish Riley with the National Academy for State Health Policy, says it could result in something insurance analysts refer to as a death spiral. "The whole individual market in states could collapse," she says.
Without subsidies, millions of people in the HealthCare.gov states would likely drop coverage. Those most likely to stay would be the really sick people who need expensive care. That change in customers would make insurance "premiums go through the roof," Riley says.
So how are are the roughly three dozen states with federal marketplaces bracing for this? Not many states are officially declaring they have alternatives.
But Pennsylvania, for one, has a backup plan. "My biggest concern is, do we have a fallback if we need it?" asks Gov. Tom Wolf, a Democrat who took office in January after defeating an incumbent Republican. The state sent a blueprint of the contingency plan to the feds this month.
He stresses the plan is nonbinding and would only be set in motion if the court rules rules the subsidies for federally run marketplaces are illegal.
Teresa Miller, the state's insurance commissioner, says the potential legal setback is "forcing us to put together a plan that frankly most states spent years developing, and essentially we're having to do that in months," she says.
Under the plan Pennsylvania is considering, the state would transition to a model where HealthCare.gov would runs the technology but the state would oversee the funding, regulations and consumer assistance.
The steps Pennsylvania has taken aren't the norm. "Pennsylvania stands out," said Joel Ario, a consultant with Manatt Health Solutions.
He says many states may be exploring options behind the scenes. But supporting an actual plan at this point "is a political nonstarter" for at least a third of states with federal marketplaces, where the governors and state legislatures opposed the health overhaul.
That's because a backup plan means "standing up and saying, 'I want to work with this law in a public way in a state-based exchange,' " he says.
Arizona even enacted legislation prohibiting a state-based marketplace, with similar bills pending in several other states.
In New Jersey, a Department of Insurance spokesperson says it's too soon to talk about alternative plans.
But neighboring Delaware, like Pennsylvania, has submitted a contingency plan for a state-supported marketplace to the feds, says Rita Landgraf, Delaware's health and social services director.
"Eighty-four percent of those who purchased plans on the marketplace received a financial subsidy, so that is critically important to our constituency that those subsidies are available to them," Landgraf says.
She says the federal marketplace won out over a state design due to the size of the state and the cost of running its own platform. Delaware officials considered a regional marketplace with other states, but it was too complicated.
A decision by the Supreme Court is expected by the end of this month.
This story is part of a reporting partnership with NPR, WHYY and Kaiser Health News.
ARI SHAPIRO, HOST:
Another major Supreme Court decision that's expected this month is over the Affordable Care Act. It's about the subsidies many people use to pay for their health insurance. The fight is over whether every Obamacare customer is eligible for those subsidies or only people in the 17 or so states that set up their own online marketplaces. The decision could affect health coverage for millions of people in states that rely on the federal site healthcare.gov. It looks like only a few states have backup plans, including Pennsylvania, as Elana Gordon of member station WHYY reports.
ELANA GORDON, BYLINE: Online marketplaces are a central part of the Affordable Care Act. It's where 27-year-old Kathryn Ryan, a restaurant server in Philadelphia, immediately turned for coverage.
KATHRYN RYAN: I was excited 'cause if it weren't for Obamacare, I wouldn't be insured at all. I wouldn't have the ability to go to the doctor.
GORDON: She can afford it thanks to a $200-a-month discount that brings her premium down to $60. Ryan, who's studying social work, is one of nearly 400,000 Pennsylvanians who've qualified for income-based subsidies. But like a lot of people, she had no idea that a case before the Supreme Court puts those subsidies at risk.
RYAN: You telling me this is like my heart has sank a bit to the bottom of my stomach because I was planning on keeping this insurance until I am gainfully employed with an agency that offers benefits.
GORDON: The reason Ryan and millions of other people's subsidies nationwide are in jeopardy has to do with a lawsuit before the Supreme Court. It argues only those with coverage in state-based marketplaces are eligible for subsidies. If the Supreme Court agrees, Trish Riley with the National Academy for State Health Policy says it could result in what a lot of analysts refer to as a death spiral.
TRISH RILEY: The whole individual market in states could collapse.
GORDON: Without those subsidies, millions would likely drop their coverage except really sick people who need expensive care. So then...
RILEY: Premiums go through the roof.
GORDON: And then no one can afford it. So how are the roughly 34 states with federal marketplaces bracing for this? Pennsylvania actually has a backup plan. Gov. Tom Wolf sent in a blueprint to the feds this past week.
TOM WOLF: I'm just doing this because I want to be prepared.
GORDON: Wolf's plan would create a state-supported market place that still uses healthcare.gov technology but would oversee funding and regulation.
WOLF: My biggest concern is do we have a fallback if we need it?
GORDON: The state's insurance commissioner, Teresa Miller, says it's all been really rushed.
TERESA MILLER: It's forcing us to put together a plan that frankly most states spent years developing, and we're having to do that in - essentially in months.
GORDON: The move is actually pretty unusual, that's according to Joel Ario, a health care consultant.
JOEL ARIO: Pennsylvania stands out.
GORDON: Politically, asking to be a state marketplace is like supporting Obamacare. Wolf, a Democrat, recently defeated a Republican governor, but elsewhere, Ario says lots of state leaders don't want anything to do with the health care law.
ARIO: In about a third of the states, that is a political nonstarter today because it does mean standing up and saying I want to work with this law in a public way as a state-based exchange.
GORDON: Arizona enacted legislation barring any sort of state-based marketplace. A New Jersey spokesperson says it's premature to publicly address any of this, but neighboring Delaware has submitted a contingency plan like Pennsylvania's, says Rita Landgraf, a Delaware health official.
RITA LANDGRAF: Eighty-four percent of Delawareans who purchased on the marketplace receive a financial subsidy, so that is critically important to our constituency that those subsidies are available to them.
GORDON: It's unclear how many other states have plans, but Ario says many are working on the problem at least in some way behind closed doors. Meanwhile, everyone's waiting for the biggest unknown of all - the Supreme Court. A decision is expected by the end of this month. For NPR News, I'm Elana Gordon in Philadelphia. Transcript provided by NPR, Copyright NPR.