US Supreme Court Upholds Affordable Care Act
- Mon, 7/23/12 - 10:29am
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At 10:22 am EDT on June 28, 866,000 people logged onto SCOTUSblog, a website devoted to providing up-to-the minute coverage of Supreme Court decisions.
Minutes earlier, the Supreme Court had upheld the constitutionality of the Patient Protection and Affordable Care Act (ACA), the most closely followed ruling in years. Tom Goldstein, a lawyer and publisher of SCOTUSblog, referred to the day as “our Super Bowl.”
The previous record number of people who followed the blog’s live reporting was 100,000 on June 25, when speculation abounded that the court would rule on the ACA. Before then, only the most ardent observers (in the hundreds or low thousands) followed along as SCOTUSblog provided instantaneous news of the rulings, most of them obscure and not receiving much attention.
The ACA was different. The healthcare industry and general public were engrossed in the decision and its implications.
In the end, the Supreme Court voted 5 to 4 that the individual mandate requiring most people in the United States to purchase health insurance was constitutional. Chief Justice John Roberts, who was nominated by former President George W. Bush, wrote the majority opinion and cast the deciding vote, siding with the liberal judges. People can opt not to purchase insurance, but they will be taxed for doing so.
The Supreme Court also surprised many experts by possibly limiting the expected Medicaid growth. The ACA had originally declared that states refusing to participate in the Medicaid expansion in 2014 would forgo their existing payments from the federal government. However, the Court voted 7 to 2 that states would not be penalized if they opt out of increasing their Medicaid enrollment.
“It was the most riveting Supreme Court theater I have seen,” Stuart Taylor, a long-time lawyer and senior fellow at the Brookings Institution, said in a Kaiser Health News webcast.
On the same day that President Barack Obama signed the ACA into law in March of 2010, 26 states filed a lawsuit against the individual mandate and Medicaid expansion. Other plaintiffs included the National Federation of Independent Businesses and individuals who did not have insurance. The Supreme Court considered both cases.
Still, with the upcoming Presidential election and some of the major provisions (including the individual mandate) not going into effect until 2014, the ACA will remain a hot topic for the foreseeable future.
Robert Blendon, ScD, professor of health policy and political analysis at Harvard University, said in a Reuters-sponsored webcast that the reform’s fate would not be decided until after the November election. Dr. Blendon said, “It is almost like two separate countries” when comparing the Democratic and Republican opinions on the law.
“It is a mistake to believe the debate is over,” Dr. Blendon said.
Shortly after the Supreme Court’s announcement, President Obama and presumed Republican presidential nominee Mitt Romney displayed their opposing views in separate televised addresses. President Obama praised the decision, while Mr. Romney vowed to repeal the ACA.
President Obama noted several ACA provisions that are focused on improving patients’ health and holding the healthcare industry responsible for delivering quality, affordable care. For example, insurers are required to spend at least 80% of the premiums they collect on patient care, must justify any premium increases >10%, cannot impose lifetime limits, must accept people with pre-existing conditions, and are required to provide free preventive care such as check-ups and mammograms.
Beginning in 2014, an additional 32 million people will receive health insurance, according to projections from the Congressional Budget Office. Approximately half of those people will enroll in Medicaid, although that number could decrease in light of the Supreme Court’s ruling. Others will purchase insurance on state-based health insurance exchanges that offer numerous plans, similar to shopping for a flight or hotel online. People who have trouble affording insurance will be eligible for tax credits.
President Obama noted that the individual mandate was important because when people do not purchase insurance and then require healthcare, their costs skyrocket and others foot the bill through higher premiums. Without an individual mandate, people would wait to purchase insurance until they were ill, contributing to higher healthcare costs for everyone, according to the president.
“[The Supreme Court has] reaffirmed a fundamental principle—that here in America, in the wealthiest nation on Earth, no illness or accident should lead to any family’s financial ruin,” President Obama said. “I know there will be a lot of discussion today about the politics of all this, about who won and who lost. That is how these things tend to be viewed here in Washington. But that discussion completely misses the point. Whatever the politics, today’s decision was a victory for people all over this country whose lives will be more secure because of this law and the Supreme Court’s decision to uphold it.”
Meanwhile, Mr. Romney stood in front of a podium with a sign that read “Repeal and Replace ObamaCare” and declared that he would seek to repeal the ACA on the first day of his presidency, if elected. Throughout his speech, he derisively referred to the ACA as "ObamaCare" and emphasized the costs associated with the law as well as the government’s expanded role in healthcare.
Mr. Romney said the ACA would raise people’s taxes, add “trillions” to the deficit and national debt, and push the financial obligations to future generations. He added that "ObamaCare is a job killer” because he believes businesses will be less likely to hire people if their health costs rise.
“Our mission is clear: if we want to get rid of ObamaCare, we are going to have to replace President Obama,” Mr. Romney said. “If we want good jobs and a bright economic future for ourselves and our children, we must replace ObamaCare. That is my mission, that is our work, and I am asking the people of America to join me. You do not want the course that President Obama has put us on. If you want, instead, the course that the founders envisioned, then join me in this effort. Help us, help us defeat ObamaCare, help us beat the liberal agenda that makes government too big, too intrusive, and that is killing jobs across this great country.”
Despite the ruling, Republicans in the House of Representatives were expected to vote to again repeal the ACA, which would be >30 times that they have attempted to repeal, defund, or erode the law, according to the Associated Press. Even if the measure passed, it would likely do no good because the Democrats control the Senate and President Obama would veto any measure.
Some Republican governors, including Rick Scott of Florida and Rick Perry of Texas, have indicated they plan on opting out of the Medicaid expansion. Beginning in January 2014, nearly all people in the United States with incomes <133% of the federal poverty level will be eligible for Medicaid. From 2014 through 2016, the federal government will cover 100% of the states’ Medicaid expansion costs. The share will gradually decrease to 90% in 2020 and beyond.
States opposed to the expansion argued that Medicaid costs are already too high, in many instances the second largest budget item behind education. They are also skeptical that the subsidies from the federal government will continue at the same level. However, most hospitals, providers, and insurers are in favor of the growth, creating a likely tense environment for politicians.
“This is a strikingly good deal for states,” John McDonough, DPH, director of the Center for Public Leadership at Harvard University, said in the Reuters-sponsored webcast. “States will have a lot of conflicting pressures [on whether to expand Medicaid], but we will not know until [after the Presidential election how many decide not to participate].”
The division between political leaders is also found in the general population. According to a Kaiser Family Foundation poll released on July 2, 47% of respondents approved of the Supreme Court’s decision, 43% disapproved, and 10% did not know or refused to comment. Meanwhile, 79% of Democrats approved of the ruling, while 82% of Republicans disapproved.
Even if the law remains intact, there is uncertainty as to how many people will refuse coverage and instead choose to pay a tax. Mr. Taylor said there is a “significant advantage” for some healthy individuals to pay the penalty because it is likely to be cheaper than purchasing an insurance policy. It is also unknown how many states will have exchanges ready by 2014. If states choose not to set up exchanges, the federal government will run them.
Regina Herzlinger, PhD, a professor at Harvard Business School, said in the Reuters-sponsored webcast that the ruling is positive for insurers and providers. Still, she said the ACA will add $1 trillion to healthcare costs in the next 10 years. The United States already spends more money on healthcare as a percentage of its gross domestic product than any other country, a situation she calls “very serious.”
“For the economy as a whole, [the Supreme Court’s decision] is a question mark,” Dr. Herzlinger said.