The Supreme Court upheld the Affordable Care Act (ACA), also known as Obamacare, by refusing to declare any part of former President Barack Obama’s signature health care reform legislation unconstitutional.
The justices ruled Texas and other Republican-led states did not have legal standing to challenge the law in federal court, since their argument hinged on the “individual mandate” requiring all Americans to purchase an Obamacare policy or pay a fine.
The decision was based on the fact that the individual mandate penalty had already been rendered moot by President Donald Trump’s Tax Cuts and Jobs Act of 2017, which reduced the penalty to $0. Therefore, the Court ruled that the Republicans’ problem was not with the mandate as it currently stands, but with Obamacare as a whole. As such, the decision leaves the entire act intact.
This latest decision by the High Court could be mixed news for Congress because it means legislators on both sides of the aisle must now find a way forward to improve Obama’s hulking health care reform law.
Reasons to be Excited
In spite of the court ruling, the fight against Obamacare remains, says Robert Henneke, the general counsel for the Texas Public Policy Foundation and the attorney who argued Texas Attorney General Ken Paxton’s case to repeal Obamacare before the Supreme Court in 2018.
“Republicans certainly lost this case, but they can now refocus on health care and reforms at the state level, as we had in Texas, where Republicans passed a pretty robust bipartisan agenda,” Henneke told Health Care News. “I don’t know if any of that happens if this lawsuit hadn’t pushed forward and kept the issue front and center in the political and policy arena the last three years.”
In contrast to the Republican vision, Democrats will continue dumping billions of dollars into Obamacare to prop it up and prevent it from collapsing under its own weight, Henneke says.
“Democrats are now focused more on subsidies and putting more money into the black hole of the ACA instead of addressing the problems causing health care to be unaffordable, or people still going into bankruptcy due to medical expenses, and limited choices for seeing a doctor and suffering rationed care, and so forth,” Henneke said.
ACA is Unsustainable
Obamacare is a bargain for some people, says Devon Herrick, a health economist focused on consumer-driven health care, telemedicine, medical tourism, emerging trends in retail medicine, and pharmaceutical economics.
“We know that Obamacare is unsustainable, the cost of premiums is too high, and that most of the enrollees will never have a claim out of their deductible,” Herrick said.
“Obamacare is ostensibly a scheme to subsidize very costly individuals at the expense of people who are healthier and don’t really have any great health care needs,” Herrick said. “For someone like me, who would have premiums of $7,000 to $8,000 and deductibles of $7,000 to $8,000 under Obamacare, I would have to hit $15,000 in medical spending before I even got a benefit out of Obamacare.”
However, there is a point to Obamacare, says Herrick. “If you are that person who needs gene therapy that costs $300,000, it’s a bargain,” says Herrick.
Health Insurance as Intended
To counter more subsidies to Obamacare care, lawmakers should restore health insurance to what it was intended to be: a premium that pays for a certain amount of calculated risk, Henneke says.
“You don’t use your car insurance to pay for an oil change and you don’t trigger your homeowner’s insurance when a light bulb goes out,” Henneke says. “We need to do this by lowering the cap on health savings accounts. All Americans should be able to put as much money as they want into an account where they can pay for their health care. We also need to move health care to more of a safety net type policy for a whole lot less than the $1,200 to $1,400 per month the average family of four spend for an ACA policy.”
A New Future
Obamacare is a bloated bureaucracy that will become less relevant as people find alternatives to get around it, but it will be an enormous drain on our economy, our budget, and the country, Henneke says.
“There are options now where Americans can seek medical care in other countries,” Henneke said. “You also have some unique situations cropping up like the surgical center in Oklahoma that does not take insurance. It’s an orthopedic surgical center and it costs a major fraction for knee or hip surgery, compared to what you would pay at a traditional hospital.”
For more basic health care, says Henneke, consumers can use direct primary care arrangements where they pay an affordable flat fee for continuous access to a doctor.
Herrick says it is important to remember Obamacare has no limit to lifetime benefits or annual benefits, and it was tailor-made to cover drugs that are hyper-expensive, which is not sustainable.
“We know that Obamacare is little more than a vehicle to transfer money to the poor and it transfers premiums from the healthy to the sick in a very large way, and it has essentially priced out the middle class, people who are getting no subsidies are finding it to be unaffordable,” Herrick said.
“Obamacare was designed to alleviate job lock, where workers were scared of losing their employer-provided health benefits if they changed jobs,” Herrick said. “If anything, it probably made things worse, saying, ‘Yeah, you can get health insurance benefits, but you just can’t afford them.’”
“But think about what President [Joe] Biden might do: He will be under pressure to create a public option or lower the age of Medicare, which is how single-payer would happen incrementally,” Herrick said.
Kenneth Artz (firstname.lastname@example.org) writes from Dallas, Texas.