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Pennsylvania, Delaware, Arkansas granted approval to set up state exchanges if subsidies struck down

Though the states use federal exchanges, agreement creates a back-up plan for the insured.

Susan Morse, Managing Editor

Screen shot from <a href="https://www.healthcare.gov/">Healthcare.gov</a>Screen shot from Healthcare.gov

In letters Monday to the governors of Delaware, Arkansas and Pennsylvania, Department of Health and Human Services Secretary Sylvia Burwell granted the states conditional approval to establish a state-based marketplace for the Affordable Care Act.

The states have federal exchanges for residents signing up for coverage under the ACA.

The Centers for Medicare & Medicaid Services conditionally approved Delaware and Pennsylvania to operate state-based marketplaces in 2016. CMA also approved Arkansas to operate a Small Business Health Options Program Marketplace in 2016 and a state-based marketplace for individuals in 2017.

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Insurance subsides through the federal exchange could be eliminated should the U.S. Supreme Court rule for the plaintiffs in King v. Burwell.

[Also: Insured wait on King v. Burwell decision]

The Supreme Court could release a decision as early as this Thursday, thought the ruling could be issued any time this month.

The plaintiffs, backed by members of the Republican Party, argue language in the ACA allows only for subsidies in those states that have set up their own exchanges.

This leaves 34 states with a federal exchange vulnerable. An estimated six million residents would lose their subsidies, with many expected to drop coverage, in a decision for the plaintiffs.

A Supreme Court ruling against Burwell would be seen as gutting President Obama’s signature law.

[Also: Reactions mount following King v. Burwell; Kennedy could swing vote]

Burwell, through the Centers for Medicare and Medicaid Services, granted the approvals Monday in letters to both governors.

The move could set a precedent for other states with federal exchanges.

However, to date, only Democrat governors Tom Wolf of Pennsylvania, Asa Hutchinson of Arkansas and Jack Markell of Delaware have made requests to establish a state exchange as a contingency plan.

The back-up would save ObamaCare subsidies for an estimated 18,000 residents in Delaware, 325,000 in Pennsylvania and more than 65,000 in Arkansas.

Twitter: @SusanMorseHFN