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When Congress approved the Patient Protection and Affordable Care Act in 2010, the law was hailed as “momentous social legislation” that constituted “the biggest attack on economic inequality” in three decades (New York Times) and a “signature achievement” for President Barack Obama and the Democratic Party (Los Angeles Times).
Champions of the 906-page law, often called Obamacare, anticipated that it would quickly become embedded in the nation’s social fabric. When the court upheld most of the Affordable Care Act’s constitutionality two years later, Democrats celebrated. Even though polls showed consistent public disapproval for the law, Obamacare seemed unstoppable.
But after marking its fifth birthday in March, the Affordable Care Act (ACA) now seems frozen in time. The law faces another crucial ruling, expected in June, from the Supreme Court in a lawsuit known as King v. Burwell. Republicans still hope to repeal Obamacare, which they would have at least an outside chance of doing if they maintain control of Congress and win the presidency in 2016. Even defenders of the law acknowledge that its provisions for calculating federal health insurance subsidies are complicated and confusing.
It is King v. Burwell that poses the most pressing danger to the ACA. The law created on-line marketplaces known as exchanges at which uninsured Americans can purchase health care insurance. Those making less than four times the federal poverty level — about $24,000 for a single person or $94,000 for a family of four — qualify for subsidies to offset the cost of their insurance premiums.
Sixteen states and the District of Columbia opted to run their own exchanges; the subsidies in these states are not being challenged. In 34 other states, however, the exchanges are operated by the federal government. The ACA says subsidies should be available to people buying insurance on exchanges “established by the state.”
In King v. Burwell, four Virginians backed by conservative and libertarian groups contend that the high court should interpret the words “established by the state” literally and disallow subsidies for those who purchased health insurance on the federal exchange. This would impact more than 7 million people, most of whom would be unable to afford health insurance without the federal subsidies.
In their presentations to the Supreme Court both sides offered arguments that sound far-fetched to a non-lawyer’s ears.
The Obama administration contended that the phrase “established by the state” is a “statutory term of art” that includes the federal exchanges. The plaintiffs said meanwhile that the language was used as a means of pressuring states to set up their own exchanges. But there’s no evidence for this after-the-fact theory in the congressional debate over the bill. Obama always acknowledged that some states would not establish their own exchanges; it defies logic to believe that he would have punished those who bought insurance on the federal exchange by denying them subsidies.
According to law professor Abbe Gluck of Yale, the mundane truth is that the ACA is “a very badly drafted statute.” Gluck supports continuance of the subsidies for customers of the federal exchange, writing, “But although the statute is sloppy, I think its meaning is plain.”
Even if the court upholds the federal subsidies, the ACA is not out of the woods.
This year taxpayers are required for the first time to stipulate on their returns that they have health insurance. Those who don’t are required to pay a penalty: $95 or 1 percent of their income, whichever is greater.
Hundreds of thousands of taxpayers who received federal subsidies for their health insurance will have to refund money to the government because their income increased after the subsidies were calculated or for other reasons such as a change in marital status. According to estimates by the Kaiser Family Foundation, the average bill for those taxpayers will be almost $800 more than they expected.
Many experts say that the complex rules for calculating subsidies should be simplified. Better efficiency would also help. Thousands of taxpayers who tried to recalculate their insurance subsidies online were stymied by technical problems, recalling the disastrous rollout of the federal website in 2013.
Whatever Obamacare’s deficiencies, it has accomplished its main objective of significantly reducing the ranks of the medically uninsured. The Department of Health and Human Services (HHS) said in a March report that the number of Americans without health insurance fell 16.5 million in the past five years, a decline of 35 percent.
More than half the new enrollees were signed up for Medicaid, the federal-state program providing coverage for the poor and disabled, and the related Children’s Health Insurance Program. The Kaiser Family Foundation cited government data showing that the number of recipients on these programs increased by 8.7 million in a single year, from the summer of 2013 to the summer of 2014.
The good news in all this is that more Americans have health insurance than ever before. The less-good news is that nearly 12 percent or roughly 38 million people still lack coverage — and that doesn’t include 11 million unauthorized immigrants ineligible for coverage by the ACA because they are not U.S. citizens. There are many more persons without health insurance in the United States than in other industrialized democracies, in most of which health care is considered a right.
Some other changes influenced by the ACA are harder to quantify. An insurance company executive knowledgeable about the health care system anonymously told SNCJ that Obamacare has contributed mightily to hospital efficiencies and to moving medical care toward payments based on the quality and value of care rather than volume of services. This is one of the president’s goals, advocated by many health policy experts. Congress, in a rare bipartisan action, also recently went in this direction with a revised formula for paying doctors under Medicare.
The Affordable Care Act is often mentioned in the same breath with two historic laws that improved the well-being of Americans: the Social Security Act of 1935 that was a crowning achievement of President Franklin D. Roosevelt’s New Deal and Medicare in 1965, one of President Lyndon B. Johnson’s most significant accomplishments. Unlike these earlier milestones, however, Obamacare has never enjoyed majority public backing. A Gallup survey this month found that 50 percent of Americans disapprove of the ACA compared to 44 percent who support it.
Public disapproval of Obamacare reflects its partisan origins. Social Security and Medicare passed Congress with hefty bipartisan majorities, but the Affordable Care Act did not attract a single Republican vote in either house of Congress.
Blame for this partisanship is in the eye of the beholder. Republicans say that Barack Obama as president did not practice the bipartisanship he preached as a candidate and also complain that Democratic congressional leaders refused to incorporate any ideas from GOP members in the legislation. Democrats counter that Republicans were adamantly opposed to health care reform from the outset and have mostly used the ACA as a political cudgel against Obama.
Take your pick in the blame game, but it’s clear that excessive partisanship has damaged health care reform. Congress, for instance, could if it chose end the dispute about federal subsidies raised in King v. Burwell with a one-line amendment to the ACA. Congress could also simplify the perplexing tax calculations required for people receiving subsidies. Neither change is in sight.
Instead, most Republicans continue to campaign against the ACA and call for repeal of the law. Most Democrats defend the law in its entirety and have shown no inclination for improving it.
Whether the Affordable Care Act survives will depend first on the Supreme Court and ultimately on the voters. A ruling for the plaintiffs in King v. Burwell would be an enormous setback for Obamacare, reducing the rolls of the insured and probably driving up insurance costs for everyone.
Whatever the high court decides, the 2016 election could determine the future of the Affordable Care Act. If Hillary Clinton (or another Democrat) wins, the law would be safe for another four years and probably become a permanent fixture of the health care system. But if Republicans capture the White House and hold the Congress, Obamacare could be replaced by an alternative that substitutes tax credits for subsidies and abolishes the requirement that all have health insurance.
Five years after it came into being, the battle over the Affordable Care Act goes on.
-- By Lou Cannon