What the ACA Decision Really Means for You

Are you ecstatic, happy, neutral, sad, or devastated about the Supreme Court’s ruling upholding almost all of the Affordable Care Act?

The answer may depend on your politics, but it more likely has everything to do with what the ruling means for you and the people you care about.

Back in March, I wrote a column entitled “How We Really Hope the Supreme Court Will Rule on the Affordable Care Act.”  Now you’ve heard pundits, politicians, and public officials tell you how to feel, let’s recap where you might really stand on the decision.

Let’s start with your policy views.

If you favor a single payer, “Medicare-for-all” program:  You’re devastated.

Your only real hope for resurrecting “Medicare for all” was if the individual mandate was thrown out.  It wasn’t.  You may have Medicaid and Medicare expansions, but over the long haul that probably won’t be enough for you. 

If you want a market-driven insurance environment, where insurers compete for your business with a minimal number of mandates and requirements:  You’re also devastated.

Neither liberals nor conservatives truly won on this one.  Like Medicare-for-all advocates, you lost your political battle to reduce the role of government in healthcare, and it may be impossible to win in the future.  

If you want to reduce the size and scope of the state Medicaid programs: You’re unhappy.

Medicaid is getting bigger, but at least the state’s not footing the bill.  Your state can refuse to expand the program, but then it’ll give up all the new federal dollars, too – and may still have to provide an alternative for poorer people who can’t afford insurance.  Maybe the federal government will take over the program in its entirety some day, but don’t hold your breath.

If you want more universal coverage, but don’t care whether it’s private or public:  You’re happy.

It may not be perfect, but the combination of Medicaid expansions, new Medicare benefits paid for by Medicare tax increases for the wealthy, and subsidized private insurance for the middle class will lead to more coverage, and fewer uninsured.

Now let’s turn to your personal views.

If you are among the 206 million people who make less than 400% of poverty (currently $91,200 for a family of four):  You’re happy.

For those who don’t have access to group coverage, you’re about to get a valuable tax credit toward what you pay for insurance.  For example:  A 45 year old with a family of four making $60,000 per year will be eligible for a tax credit of over $9,000, reducing the cost of an average family plan to around $400 per month.

If you are among the estimated 4 million people who can afford insurance, but will choose not to buy it:  You’re unhappy.

By 2016, you will be paying a new tax of $695 per person, $2085 for a family, or 2.5% of income, whichever is greater.

If you are one of the 11 million people due a premium rebate in 2012 because your insurer didn’t meet the minimum loss ratio standards:  You’re happy.

The biggest consumer protection in ACA – the minimum loss ratio – is still in place, along with all the others.  You’ll get your rebate, and your insurer will be paying out more dollars for care in the future.

You or a child of yours is one of the 133 million people with a chronic condition and, especially, one of the 4 million who is uninsurable as a result:  You’re happy.

Your child with a disability will still be covered on your insurance, and as an adult you’ve still got PCIP in the short term until full pre-existing condition relief takes effect in 2014.

You are one of 48 million Medicare recipients:  You’re ecstatic.

Your donut hole coverage and preventive services remain in effect, and will even improve in the future.

You are one of the 17 million people living below 133% of poverty (currently around $31,800 for a family of four) who don’t have insurance:  You’re happy.

Unless your state decides to refuse to expand the program as a matter of principle, in 2014 you’ll be eligible for Medicaid.

You are one of the 13 million adult children currently on your parents’ insurance:  You’re happy.

You can stay on your parents’ plan until you’re 26.

This is the second in a series of five OHPM columns on the impact of the Supreme Court decision on the Affordable Care Act. Tomorrow: the impact of the ACA decision on the future of private insurance.

Is Medicare for All on the Horizon?

We’re now just a little more than a month away from the day the Supreme Court will hear the arguments that determine the fate of the Affordable Care Act.  

The fight will be narrow – about the constitutionality of the individual mandate and Medicaid expansions.  

The consequences for health care financing, however, will be widespread.

And, ironically, both states rights conservatives and pro-national health insurance progressives may end up rooting against their own positions.

To understand why, consider the four ACA Supreme Court issues that will be argued. 

The first is the constitutionality of the individual mandate under the Commerce Clause of the Constitution. 

To be constitutional under the Commerce Clause, a law has to regulate economic activity that “has a substantial effect” on interstate commerce. 

While it may seem that all the activity under ACA will have a substantial effect on interstate commerce, Judge Vinson in Florida disagreed.  In considering the individual mandate, he found that the failure to purchase insurance by an individual is economic “inactivity,” not “activity.” For Judge Vinson, there’s no distinction between economic inactivity and non-economic activity. (I’m not so sure.)

Two times – in 1995 and again in 2000 – the Supreme Court held that non-economic activity wasn’t covered under the Commerce Clause.  So if the Supreme Court agrees with Judge Vinson, then the individual mandate won’t be constitutional under the Commerce Clause, and the Court will have to consider the second issue.

Is the individual mandate constitutional under the taxing authority of Congress?

If the Commerce Clause doesn’t make the mandate constitutional, then the Anti-Injunction Act might.  It prevents anyone from challenging the right of Congress to collect taxes. 

But even though ACA forces people who don’t buy insurance to pay higher income taxes, Congress specifically referred to these as “regulatory penalties.”  So is a tax by another name still a tax?  If it is – as the Fourth Circuit Court ruled – then the individual mandate is probably constitutional. 

But let’s say it isn’t.

Then the third issue becomes important – whether the individual mandate can be “severed” from the rest of the law. 

Some laws state explicitly that if one section of the law falls, the rest still stand.  But ACA doesn’t.  So it’s up to the Court to decide what happens to ACA as a whole if it finds the individual mandate unconstitutional.

So far judges who have ruled the mandate unconstitutional have disagreed about its severability.

One judge (Hudson) said it was severable, citing a 2010 Supreme Court ruling. When portions of a law are unconstitutional, all that should be thrown out were “problematic portions while leaving the remainder intact.” 

Another judge (Connor) also found it severable, but not from the entire law.  He said that the sections of the law that prevent insurance companies from denying coverage based on pre-existing conditions and prevent higher rates based on health condition, geography, or gender are intertwined with it.  So he found these unconstitutional, too.

A third judge (Vinson) ruled that the individual mandate wasn’t severable, but essential to ACA’s overarching goal.  He therefore decided that the whole law was unconstitutional.

The individual mandate was originally developed as an alternative to single-payer, government-funded, universal health care coverage.  But the fourth issue – whether ACA’s Medicaid expansion is constitutional – may now glue the two together.

The 26 states opposing the Medicaid expansion aren’t arguing against it per se, but against the federal government “coercing” them into implementing it.  In other words, government health care is fine, but not if states have to pay. 

This year, these and other states are proposing disturbing cuts to safety net health services.  Florida is considering a proposal to turn most state health services over to counties .  The Governor of Maine wants to remove 65,000 adults from the Medicaid program.  Louisiana just announced a new round of cuts to local mental health providers.  And Connecticut has begun denying some Medicaid coverage to kids with disabilities.

It’s as if they collectively believe that any problem can be solved by taking money away from it.

Here’s what they’re ignoring.  When you oppose requiring either individuals or states to pay for health care, you’re left with only one viable future option – federally-financed Medicare-for-all.

On the other hand, when you defend ACA as it is, you’re arguing that a two-tiered system of government-subsidized private health insurance for those who can afford it and public insurance for the poor and elderly is the solution to our health care financing crisis.

So when the Supreme Court decides, who wins?

If you have questions about this column, or wish to receive an email notifying you when new Our Health Policy Matters columns are published, contact gionfriddopaul@gmail.com.