Affordable Care Act Is On the Line – Again
Now that the presidential Election Day is past and President Elect Biden is preparing for the future, including especially efforts to deal with the national resurgence for an exhausted country of COVID-19, Obamacare, otherwise know as the Affordable Care Act is back for consideration before the U.S. Supreme Court. Arguments in the case brought by Republican state officials and backed by the Trump Administration will be held this week. One characteristic with which this time could not be charged is boredom. Americans have had a wild ride recently.
Despite its controversial nature, the ACA has proven remarkably resilient to challenges. The Court composition has changed with Amy Coney Barrett replacing Ruth Bader Ginsberg and the presidency is in transition so it is unclear how matters will play out this time but, regardless, the future of the law has significant consequences for Americans especially in the middle of a pandemic. With a new administration it could be expected that the attitude toward the case will change markedly. Whether this would be in time prior to a Supreme Court decision is another matter.
As a refresher, here are some of the primary provisions of the Act on which Americans rely.
Preexisting Conditions. One provision of the law prohibits insurance companies from discriminating against applicants in placing insurance and in setting premiums based on preexisting medical conditions. This provision alone has saved many Americans who under prior law were often denied health insurance coverage under any circumstances. During a pandemic this provision has particular significance since, without it, individuals afflicted with COVID-19 could potentially be denied coverage or, if available, be charged at a significantly higher rate.
Medicaid Expansion. In the majority of states that have adopted the provisions of the ACA for Medicaid expansion the law has gone a long way toward extending health insurance for millions of Americans. Medicaid expansion allows individuals to obtain health insurance without being subject to the extremely restrictive guidelines established for Medicaid generally. It has been exceptionally helpful to Americans in rural and low income America.
Children Remaining on Parents’ Private Health Insurance Until Age 26. This is another highly popular provision of the law. Young adults recently out of school or handling jobs that do not offer health insurance benefits are able under the Act to be covered under their parents’ policies.
The Urban Institute, a nonprofit research organization estimates the following implications if the law is overturned.
“Among other findings, we estimate that overturning the ACA would have the following effects in 2022:
- An additional 21.1 million people will be uninsured, a 69 percent increase nationally.
- As the marketplace, premium tax credits, and cost-sharing reductions are eliminated, 9.3 million people will lose income-related subsidies for marketplace insurance.
- Medicaid/CHIP coverage (acute care for the nonelderly) will decline by 22 percent nationally, or 15.5 million people.
- Low-income states that expanded Medicaid eligibility under the ACA will see the largest percent increases in uninsurance, such as Maine…Kentucky,…and West Virginia. Iowa’s uninsurance rate will climb more than 150%…as will Michigan’s. The uninsured population will increase by at least 90% in 25 states and the District of Columbia…”
The article describes other effects but goes on to note the effect on organizations providing care as follows: “Because of the 69 percent increase in uninsurance, the demand for uncompensated care will rise by 75 percent, or $58 billion. The demand for uncompensated care from hospitals alone will increase by $17.4 billion in 2022…” https://www.urban.org/research/publication/potential-effects-supreme-court-decision-overturn-affordable-care-act-updated-estimates
All of this does not mean that the ACA is without its flaws. One major problem is for people whose incomes fall above the limit where they would qualify for subsidies under the Act. Another can be high deductibles. It is not a flawless solution to America’s healthcare problems but it has been a major step forward.
The Act was originally upheld as an extension of the government taxing power since a tax penalty was associated with noncompliance in obtaining health insurance. That provision subsequently passed into oblivion but did leave a problem – if individuals were not incentivized to obtain coverage by means of a penalty would they only obtain the coverage when needed. Early estimates believe the newly constituted Supreme Court will still uphold the Act but this is another area where only time will tell.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.