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Supreme Court Prepares To Determine Fate Of U.S. Health Care System

By Sahil Kapur for Talking Points Memo

In one week, the Supreme Court will hear arguments on a legacy-defining case for President Obama as it determines whether a crucial piece of his signature legislative achievement meets constitutional muster. The health care reform law’s path to the high court has underscored a climate of supercharged partisan politics, and the highly anticipated decision expected this summer, in the dead heat of presidential election season, will help determine the trajectory of the nation’s health care system.

The main question facing the justices is whether the law’s requirement that Americans purchase insurance falls within the limits of federal power under the Constitution. They’ll also hear arguments on whether, if the mandate is deemed unconstitutional, other aspects of the law such such coverage guarantee also need to be struck down. There’s a chance that the court will punt the case to after 2014 under a law that says a tax may not be challenged in court until it is being collected.

The Affordable Care Act — which passed despite unanimous GOP opposition and was enacted two years ago this week, in March 2010 — requires insurance companies to accept customers regardless of pre-existing medical conditions. To prevent people from waiting until they get sick to buy insurance — and thus undermine the stability of the insurance — the law requires the uninsured to purchase coverage, or to pay a penalty to the government. It also provides subsidies to those individuals to assure that the insurance itself is affordable. Health economists note that the mandate is vital to the law’s success, but conservatives decry it as federal overreach.

And that’s the basis for the case, brought by 26 Republican-led states, which argues that the mandate is an unprecedented use of power. The Obama administration counters that the mandate is a perfectly legitimate tool that allows the federal government to regulate the health insurance industry, pursuant to its powers to regulate interstate commerce. Decades of prior jurisprudence backs that claim. A variety of lower court decisions, followed by split appellate court rulings on the constitutionality of the statue, brought the case to the Supreme Court, which agreed last fall to hear it.

The battle breaks down on party lines: The GOP and its conservative allies eagerly want to see the law stricken down; Democrats and progressive groups hail it as a vital achievement. The winning side will see a key part of its vision for the country’s health care system — and indeed of its view of the role of the federal government — validated by the highest judicial authority in the land. But even if the court upholds the law, it’ll have no bearing on the Republican quest to repeal or undermine it through the legislative process.

If the law is upheld, the real-life implications are straightforward: It will continue to be implemented unless and until Republicans capture enough votes in Congress to repeal major portions of it, and the White House to prevent a veto. States will likely have few alternatives but to establish the insurance market exchanges by 2014 and accept the basic features of the law. Nearly all Americans are projected to be covered by 2019.

If the court jettisons the mandate and deems the rest of the law must fall with it, the nation’s health care system will take a leap backward — to the pre-Obama status quo. Insurers will continue to deny coverage when it suits them and the trend of rising uninsured will continue. Despite their promises, Republicans have to date offered no plan to address those problems; ironically, the ideas underlying the Affordable Care Act were backed by a significant faction of Republicans, until Obama adopted them.

If the mandate alone is overturned, the remaining system could see a death-spiral of rising costs, because insurers will be forced to cover unhealthy consumers while younger and healthier people can refuse to buy coverage until they’re sick and badly need it. The insurance industry in particular is extremely nervous about this, which is why it has asked the court to either uphold the entire law or strike it all down. Health policy experts have mulled alternatives to the mandate, such as auto-enrollment with an opt-out mechanism — but all that’s probably moot. Republicans won’t want to save the ACA; if the court axes the mandate, they’ll likely use the decision as evidence that the entire law needs to go.

Even if the court signs off on the ACA, the United States will continue to grapple with the profound challenge of fixing its ailing health care system. But the law reflects the most sweeping effort in generations to address its biggest problems, while preserving the private insurance system. Rolling it back would put Congress back in the unenviable position of having to address those contentious issues in the years ahead. But Republicans know Democrats will soak up long-term political rewards for the Affordable Care Act if it’s successful, and are determined to prevent that.

The arguments will take place on March 26, 27 and 28. The hearings will not be televised, but audio of the proceedings will be released at the end of each day. Unless it bucks expectations and punts the decision, the timing of the ruling will set up the Supreme Court as an election year piñata for the losing side. That decision is expected by July.

Comments

2 Responses to “Supreme Court Prepares To Determine Fate Of U.S. Health Care System”
  1. dianne says:

    Obamacare is the MA plan on steroids, and the latter has failed. In fact, it showed itself to be unsustainable during year one of implementation and has done nothing to contain health care costs or make coverage affordable to the vast majority of MA residents including those in the subsidized plans.

    MA Gov. Patrick’s claim that more the 98 percent are insured is based on skewed numbers put together by the state and handed over to a firm hired by the state to make the MA plan look like it is doing better than it is. Truth be told, at any given time about 5 percent of the original 10.3 percent uninsured are covered as people bounce in and out of plans.

    Many waivers have been given b/c people can’t afford the “affordable” premiums and even those who are paying the premiums can’t afford to use the coverage even if they can find a doctor who will take patients in the subsidized plans.

    Then there are thousands for whom there is no affordable coverage so they have been officially excused from the penalty if they don’t have coverage.

    Premiums have continued to rise including adding a premium to what was a free plan in western MA, one of the poorest parts of the state while other subsidized premiums nearly doubled. Subsidized premiums went up right after the first year b/c the plan was not sustainable. Cost sharing also increased. And those who are a few dollars over eligibility for a subsidized plan cannot afford a Connector so-called discount product so they are forced to opt out and pay a penalty or they try to pay the premium, find that they can’t afford it and also can’t afford to use the crappy coverage so they, too, opt out.

    These problems and many more, such as changing plans when people move around in FPL brackets, are on worker’s comp for awhile, are unemployed and can’t afford unemployment coverage or COBRA and seasonal workers who go from income to no income at least twice a year if not more, will plague the entire country. It is a bureaucratic labyrinth.

    In Obamacare, since eligibility and affordability are based on prior year income, anyone who earns in the current year even $1 over the FPL bracket they were in, will owe a substantial tax debt b/c Obamacare requires a payback for having earned more money – as I said, however little it is.

    Paybacks are capped at $695, $1,500 and $2,500 depending on which FPL bracket they were in and then moved to for their extra dollar or more. I would post the url to the law but don’t have it at my fingertips. Actually, these caps were lower but were increased to the amounts above b/c Obamacare has already showed itself to be too costly.

    And not only will these folks owe the IRS money, they will also be shunted to a higher cost premium with more expensive cost sharing (cost shifting is a better word).

    And if they can’t pay that premium, then they will be liable for the tax penalty but will probably still owe the payback.

    If they earned a buck more and are no longer eligible for a subsidized plan, then they will have to pay back the entire subsdidy.

    If they are found eligible for expanded Medicaiid (up to 133 percent FPL), they will be “encouraged” and “helped” to enroll. They will not be allowed to shop for a subsidized plan at the Exchange. So when Obama said all Americans would have choice, it appears that he must have meant, for this income segment of the population, a choice between Medicaid and the tax penalty for remaining uninsured. This is despicable. A lot of people don’t want to be in that crummy, underfunded, overstretched plan which also contains an federally mandated estate recovery program which applies to those who use Medicaid benefits at age 55 and up. They will be getting a mandated collateral loan or opting out b/c they don’t want to lose the family home and other assets upon death.

    Obamacare really has nothing to do with access to affordable care for all with uniform benefits. It is but a regressive and punitive scheme that uses the very people Obama and Democrats claimed it would help as the bank to solve America’s health care problems.

    Forget about all the commerce clause this and the constitutional that and let’s just call it what it is: government-sanctioned coercion and collusion and involuntary servitude.

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