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healthcare

Supreme Court About to Kill Obamacare at a Time Like This?

A week after the election, the Supreme Court will hear arguments why the Affordable Care Act should be struck down in its entirety versus why it is too important not to continue undisturbed. If the justices decide the former, the consequences will be calamitous.

Almost all of the 23 million people and families — roughly 11 million who bought insurance on federal and state exchanges, and 12 million who obtained coverage from Medicaid expansion — will lose coverage under the Act, and in the midst of the most severe health crisis in a century.

Millions more have, owing to the pandemic's blow to the economy, lost jobs that provided employer-paid health insurance — 3 million so far estimates the Urban Institute and 12 million in total likely by year-end per Avalere Health. Many might


qualify for Obamacare's subsidized insurance, but they too will add millions to the rolls of uninsured if the Supreme Court takes away that opportunity when it decides the case several months from now.

Gone as well will be the prohibition against denying coverage for reason of a pre-existing condition, as well as its companion rule that insurers cannot cancel policies when someone becomes ill. The popular provision of family plans covering sons and daughters until age 26 — some two million young adults according to the government — would also end.

laissez care

Republicans have been against the Affordable Care Act (ACA) from the outset, ideologically averse to yet another large-scale government program. No Republicans voted for it and the Party has voted without success to repeal all or parts of the Act more than sixty times. Key to the funding of Obamacare was the mandate that all adults must purchase health insurance else pay an escalating penalty each year. The right to penalize the non-compliant survived a challenge in National Federation of Independent Business v. Sebelius in 2012 when Chief Justice John Roberts joined the liberal wing in a 5-to-4 decision, writing in his opinion that the penalty was in reality a tax that Congress has the power to impose under the 16th Amendment.

trump card

In September Ruth Bader Ginsburg died after repeated health incidents, giving the president his third chance to name a Supreme Court Justice. With unseemly haste, and the complicity of Senate Majority Leader Mitch McConnell, the Trump administration pressed that the very conservative Amy Coney Barrett be accepted onto the court by the Senate before Election Day. To force the Senate to concentrate on confirming Barrett for the bench, Trump has even called a halt to negotiations for trillions in pandemic stimulus relief, causing financial hardship for millions and risking a severe depression.

The objective is for Judge Barrett to be on the court in time for the November 10th hearing. In 2017, she wrote an article for the Notre Dame law journal that disagreed with Chief Justice Roberts' reason for upholding Obamacare in 2012. She also signed a petition that year protesting the law’s requirement that employers offer insurance plans that pay for contraception. Republicans and the Trump administration are confident that her addition will supply the insurmountable five votes against possible apostate Roberts should he be tempted to once again be a swing vote to keep Obamacare alive. He might be reluctant to see history remember his court as the one that obliterated the one attempt to install a healthcare system in place of the chaos that went before. If Judge Barrett is not on the bench to hear the arguments November 10th, then she cannot vote when the case is decided some months later.

For the record, if Barrett were ineligible and Roberts again decides to side with the liberal wing, the vote would be 4-to-4, which would leave the case in something of a limbo that will shortly be explained.

damaged goods

Obamacare has many flaws. It was an invention, after all, with intricate interlocking parts, yet launched with no trial runs. Insurance policies were overly comprehensive and therefore too costly. Age groups found they were paying for benefits irrelevant to their age bracket, such as the old paying for pediatric care. The young and healthy chose to pay penalties rather than buy into the insurance pool with resulting funding shortfalls causing premiums to more than double by 2017. It was thought that Congress would raise this and lower that as the public fed back what worked and what didn't, the typical practice with complex legislation, but Republicans wanted the ACA to fail and blocked any repairs.

Most insurance companies suffered heavy losses at the outset — $1 billion for United Healthcare in 2016, for example. They could only guess at rates to charge to an unknown number of sign-ups with an unknown mix of medical conditions. Some of the biggest insurers dropped out. There were instances of "bare" counties where all insurers had withdrawn.

That has reversed, though, beginning a few years ago as companies developed the actuarial data for profitable pricing and 36 states enrolled in the federal Medicaid expansion program which most states pay insurance companies to run. “The individual market remains profitable and stable,” concludes the Kaiser Family Foundation in a recent analysis.

But the biggest headache for participants are the high deductibles, which can run to a bit over $8,000 for individuals and just over $16,000 for families. The subsidies help those with lower incomes to pay the premiums but they and those over the subsidy threshold find themselves paying for both medical costs and premiums, with the upshot that the popularity index for Obamacare has dropped below 50%. “We obviously made a huge mistake”, heath policy adviser to the Obama White House, Ezekiel Emanuel, told The New York Times last March. “We were under a lot of pressure to keep the price under a trillion dollars. That was constraining everything we did, from the size of the subsidies to what type of care could have no co-pay."

Of course, the root cause of high premiums and deductibles are the uncontrolled healthcare costs that in the U.S. run about twice those of other developed nations.

the case

In 2017, Republicans tackled onto the Tax Cuts and Jobs Act a proviso that the penalty for not buying insurance be reduced to $0. A Texas-led coalition of 18 states — all having Republican governors and state attorneys general — sued the government in 2018 with the argument that the effective elimination by Congress of the penalty rendered the entire law invalid. Judge Reed O’Connor of the Federal District Court in Fort Worth agreed, striking down the entire law as unconstitutional. He based his decision on the longstanding legal doctrine called “severability” which holds that excising of one part of a law invalidates the rest if the rest relies for its continuance on the part that was excised. O'Connor called the penalty — enacted under the Congress's taxing power but now $0 — had been the "keystone" of the law. Its removal orphaned the mandate linked to that tax that requires people to buy insurance, which means the mandate is now an unconstitutional demand.

The Trump administration, at first supported stripping out only some parts of the law, but then changed to the conservatives' position — and that of the Texas court — that Obamacare should be done away with altogether. The Trump administration took the extraordinary position of refusing to defend a U.S. law from the Republican states' challenge and instead sided with them.

In December of last year a three-judge panel of the Fifth U.S. Circuit Court of Appeals in New Orleans agreed 2-to-1 with the Texas judge that the mandate to buy insurance was unconstitutional, but it sent the case back to Texas asking O'Connor to “conduct a more searching inquiry” into whether other parts of the law could be allowed to survive. The appeals court asked the judge to “employ a finer-toothed comb” in going over the almost 1,000-page law, pointedly saying about its many other provisions — Medicaid expansion, protection of persons with pre-existing conditions, and so forth — that “it is unclear how provisions like these…were intended to work ‘together’ with the individual mandate.” The two judges in the majority even took the Texas jurist to task in their opinion with…

“It may still be that none of the A.C.A. is severable from the individual mandate, even after this inquiry is concluded. But it is no small thing for unelected, life-tenured judges to declare duly enacted legislation passed by the elected representatives of the American people unconstitutional.”

This January, 20 Democrat-led states led by California Attorney General Xavier Becerra petitioned the Supreme Court for expedited review of the appeals court ruling, arguing that healthcare and its insurance is too important for the matter to bounce back and forth between lesser courts and should be resolved.

In June, the Justice Department pressed its objective by submitting a brief to the Court asking it to overturn the Affordable Care Act entirely, declaring, "The individual mandate is not severable from the rest of the Act" and pointedly arguing that Obamacare's pre-existing condition rules must be overturned as well.

That brings us to the November 10th hearing.

a possible out

The severability principle has a qualifier. It says that when a court (or presumably Congress) excises one provision of a statute, it should leave the rest of the law in place unless Congress explicitly stated that the statute could not survive without that provision. When defending Obamacare before the New Orleans appeals court in July of last year, the lawyers from the Democrat-governed states cited statements from members of Congress that they wanted the rest of the law to remain intact. In December, upon the appellate court's 2-to-1 agreement with the Texas court, Senator Lamar Alexander (R-Tenn) said in a statement, “I am not aware of a single senator who said they were voting to repeal Obamacare when they voted to eliminate the individual mandate penalty” as part of the 2017 tax overhaul.

if the court overturns

But if the Supreme Court, with its cohort of five and possibly six conservatives justices, three of them having already voted to put an end to the ACA, decides to clean the slate and take down the entire law, what takes its place? The answer is: nothing.

Since before he took office in 2017, President Trump has promised a Republican healthcare plan to take the place of Obamacare, with tweets such as "FAR BETTER AND MUCH LESS EXPENSIVE". At the time, he told The Washington Post he was nearly done with his plan, but almost four years later, he has never put forth any ideas of how it would work, and no plan is in evidence. Nor has Congress drafted any legislation to bring to reality Republican musings about federal and state funded high risk pools meant to spare insurers the cost of taking on patients with serious conditions.

The only remnant of Obamacare would be Mr. Trump's repeated assurance — said some one hundred times by one count — that insurance availability for those with pre-existing conditions will be preserved. “We will always and very strongly protect patients with pre-existing conditions. And that is a pledge from the entire Republican Party”, he said in his nomination acceptance speech in August. Trump tweeted himself as "the person who saved pre-existing conditions", while at the same time bidding the Supreme Court to terminate the very law that protects those with pre-existing conditions.

As far back as December 2018, Trump said he might sign an executive order requiring insurers to accept applicants with health conditions, saying it “has never been done before” as if unaware that this is one of Obamacare's premier features. He only went through with signing an order weeks before the election in an attempt to stem the threat of lost votes. There is no mention of safeguarding the rule that forbids insurers from dropping claimants who experienced illness and cost insurers reimbursement.

An executive order would be toothless if the ACA is eliminated. It does not have the force of legislation, yet Trump has 84% of Republicans believing he has the better approach for “maintaining protections for people with pre-existing conditions", according to the Kaiser Family Foundation. That organization estimated last year that 54 million people have conditions (e.g., high blood pressure, asthma, even acne) that, according to guidelines insurers followed to screen applicants in the years before Obamacare, would disqualify them from obtaining insurance. Add to that pool the seven million, so far, who have tested positive for COVID-19 — the newest pre-existing condition.

if it's broke, fix it

Although his progressive wing dreams of Medicare for All, Joe Biden wants to repair and shore up Obamacare. One thing he wants is to add what is called the public option, a federally-operated exchange to provide competition to commercial insurers that was dropped from the original negotiations. Democrats want to increase the subsidies that help people pay for insurance as well make the program available to families earning more than 400% of the poverty level, which is the limit now.

In June, House Speaker Nancy Pelosi announced a bill that would expand subsidies so that no family would pay more than 8.5% of its income on health insurance, do away with the George W. Bush-era restriction that disallows Medicare negotiating drug prices, and offer further incentives to the 14 states that still have not opted for Medicaid expansion even though the government pays 100% for the first four years and 90% thereafter.

Now imagine the scenario in which Biden wins, the Supreme Court ends Obamacare, the Republicans retain the Senate, Mitch McConnell wins his race in Kentucky and is again elected majority leader, where he will block all Democratic legislation as he did when Barack Obama was president. Nothing will go forward. We will again have no health care "system" at all, but anarchy, where the public will be at the mercy of an insurance industry that enrolls only the healthy, and the pharmaceutical industry is free to set prices that the sick cannot afford.

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