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Understanding Obamacare at the Supreme Court Understanding Obamacare at the Supreme Court
(about 3 hours later)
Struggling to understand the intricacies of the Affordable Care Act lawsuit now at the Supreme Court? We break it down to the basics. Struggling to understand the intricacies of the Affordable Care Act lawsuit ruled on by the Supreme Court? We break it down to the basics.
The Affordable Care Act became law in 2010, and ever since has been the subject of legal and legislative battles.The Affordable Care Act became law in 2010, and ever since has been the subject of legal and legislative battles.
Now, the Supreme Court is set to decide on King v Burwell, a case that could put the law - also known as Obamacare - into a "death spiral" in much of the country. Now, the Supreme Court has decided on King v Burwell, a case that put the law - also known as Obamacare - into jeopardy.
It's complicated - and it's just one part of an even more complicated law. But to understand the basics, here are seven key points.It's complicated - and it's just one part of an even more complicated law. But to understand the basics, here are seven key points.
1. Didn't we already do this Obamacare and the Supreme Court thing?1. Didn't we already do this Obamacare and the Supreme Court thing?
Yes. In 2012, justices ruled that the law, which requires that all Americans have health care, was constitutional. Many people thought that was that. They were wrong.Yes. In 2012, justices ruled that the law, which requires that all Americans have health care, was constitutional. Many people thought that was that. They were wrong.
The law remained deeply contentious and sparked a series of fresh legal challenges - one of which made it to the highest court in the land.The law remained deeply contentious and sparked a series of fresh legal challenges - one of which made it to the highest court in the land.
2. So what is it this time?2. So what is it this time?
It's about four words in a 900-page law.It's about four words in a 900-page law.
The ACA provides subsidies for those who can't afford to buy their own insurance but aren't poor enough to qualify for government care.The ACA provides subsidies for those who can't afford to buy their own insurance but aren't poor enough to qualify for government care.
States were encouraged to set up online marketplaces, or exchanges, so residents could shop around for the best price. But lots of states who opposed the law didn't do that, so there's also a federal exchange, healthcare.gov.States were encouraged to set up online marketplaces, or exchanges, so residents could shop around for the best price. But lots of states who opposed the law didn't do that, so there's also a federal exchange, healthcare.gov.
The text of the law states that subsidies are available for anyone who gets care via exchanges "established by the State."The text of the law states that subsidies are available for anyone who gets care via exchanges "established by the State."
The people who wrote the law say this was just a case of sloppy language. They intended for anyone buying through an exchange - be it state or federal - to have access to subsidies.The people who wrote the law say this was just a case of sloppy language. They intended for anyone buying through an exchange - be it state or federal - to have access to subsidies.
But King, the plaintiff in the Supreme Court case says, the law is the law. And the way the law is written means people on the federal exchange aren't eligible for subsidies.But King, the plaintiff in the Supreme Court case says, the law is the law. And the way the law is written means people on the federal exchange aren't eligible for subsidies.
3. What happens if King wins? 3. What did the Supreme Court decide?
If the court rules for King, 6.4 million people on the federal exchange who can't afford their care will stop receiving subsidies to pay their monthly bills. This could happen as early as August. Those most likely to be affected are white, college-educated, employed southerners. In a 6-3 decision, the court ruled for the Obama administration, saying the law as a whole allowed subsidies to everyone, despite "inartful drafting" of the bill.
Without that subsidy - the average is more than $270 (£172) a month - most of those people are expected to drop their insurance coverage. But people who are really sick will probably keep it, because expensive insurance is still cheaper than the cost of medical care. If the court had ruled the other way, 6.4 million people on the federal exchange who couldn't afford their care would have stopped receiving subsidies to pay their monthly bills. Those who were most likely to be affected were white, college-educated, employed southerners.
So the insurance companies will be paying for lots of expensive care without getting payments from healthy people who use very little care. Without that subsidy - the average is more than $270 (£172) a month - most of those people had been expected to drop their insurance coverage.
They would have to raise the cost of insurance to make ends meet - causing even more people to drop their coverage, until only the very sickest remain. That's the so-called death spiral. 4. What would have happened to medical care if the court had ruled the other way?
4. Will people die? Without subsidised healthy people, the insurance companies would have been paying for lots of expensive care without getting payments from those who use very little care.
'Death spiral' refers to the viability of the law and the economics of healthcare under it. It's not literal - hospitals will not start turning away people who show up with broken arms, or turning off life support for people who lose their insurance. They will, however, charge these people full price - which is a lot. Medical debt is the number one cause of bankruptcy in the US. They would have had to raise the cost of insurance to make ends meet - causing even more people to drop their coverage, until only the very sickest remain. That's the so-called death spiral.
Legally, hospitals have to treat anyone who needs care. But people without insurance are going to be a lot less likely to seek out that care knowing they'll end up with a huge bill. They'll also skip check-ups, stop getting prescriptions filled and other smaller acts that can lead to bigger medical crises later on. It's not literal - hospitals would not have started turning away people who show up with broken arms, or turning off life support for people who lose their insurance. They would, however, have charged these people full price - which is a lot. Medical debt is the number one cause of bankruptcy in the US.
5. Does Obamacare survive? Legally, hospitals have to treat anyone who needs care. But people without insurance would have been a lot less likely to seek out that care knowing they would end up with a huge bill. They would also skip check-ups, stop getting prescriptions filled and other smaller acts that could lead to bigger medical crises later on.
The loss of subsidies would be a huge mess - insurance companies and hospitals would find themselves in financial trouble, and millions of Americans would be without insurance. 5. What happens now?
The government dedicated a lot of money to helping states set up exchanges, but all that had to be awarded by the end of last year. Not much. The status quo continues, although some Republicans, including many presidential candidates, have already called for repealing or replacing the law, making it potential top 2016 presidential election issue.
So low-income residents of states without exchanges (or who haven't started the process) will basically be excluded from a big part of Obamacare - while still having to pay taxes that go towards the law. States that were considering setting up new exchanges may not do so. And without the uncertainty of a pending case, those who did not sign up last year for insurance fearing higher costs may do so next year.
But the 2012 court decision determined that the ACA is the law of the land. So even if it's a mess, it's still legally binding until it's repealed by Congress and signed off by Obama. Not only is that practically impossible, it would mean kicking even more people off insurance, and reintroducing some conditions that voters hate - like keeping people with pre-existing conditions from purchasing insurance. It's political poison.
6. The Republicans must be delighted.
Actually, they're terrified. If King wins, the Obama administration has no recourse. It's up to Congress to fix the law.
Congressional Republicans don't like the ACA. Still, they don't want millions to lose insurance on their watch. But they don't have a cohesive plan in place should the subsidies disappear.
The easiest fix is just passing a bill to amend the language. But the ACA is so politically contentious that it probably won't happen.
7. Can it be resuscitated?
Yes, and for the sake of the insurers, the patients, and the taxpayers, it will have to be.
July will be a mad scramble in Washington to get something done - which, judging by the Congressional track record, won't be easy.