Ready for a 255% premium hike?

Benefits Pro reports:

“Supreme Court ruling killing PPACA subsidies may cause premiums to skyrocket.

If the U.S. Supreme Court rules that federal subsidies under the Patient Protection and Affordable Care Act are invalid, 7.5 million Americans could face an average premium increase of 255 percent this year. And some could face an increase as much as 779 percent.

That’s the dire warning from consulting firm Avalere Health on the impact that the King vs. Burwell case could have on consumers. Arguments in the case begin March 4.

Avalere said 87 percent of federal exchange customers receive a subsidy. Therefore, the firm said killing the subsidies would cause “average monthly premium contributions for enrollees” to potentially increase “between 122 percent and 774 percent, depending on the state.” Residents in Alaska and Mississippi would see the highest percentage increases in their premium contributions, if the court rules in favor of the plaintiffs.

“The federal exchange generally serves low-income populations in red states, so that’s where the premium increases would be concentrated,” said Avalere CEO Dan Mendelson. “If King prevails, we expect to see virtually all stakeholders aggressively seeking alternatives to ensure continuity of care.”

As many others have already, Avalere pointed out that killing the subsidies could undermine the requirements of the law.

“Loss of premium subsidies in federally run exchanges would mean that many exchange consumers will be exempt from the individual mandate,” said Elizabeth Carpenter, director at Avalere. “Moreover, because the employer mandate is tied to employees claiming a premium subsidy, it would also undermine employer responsibility requirements in those areas.”

Avalere’s report is the latest to report the disastrous effects should the Supreme Court rule against the subsidies. Last month, the RAND Corp. estimated that about 9.6 million people could lose health coverage, while millions more could suffer crushing premium spikes.

Meanwhile, according to a poll from the Kaiser Family Foundation, the vast majority of the public — regardless of political affiliation — are in favor of PPACA subsidies and want them to survive the Supreme Court challenge.

Obama administration officials said this week that they do not have a backup plan should the high court toss out the subsidies.