Obamacare’s structure and aims were hazy in 2010 when then House Speaker Nancy Pelosi stated on its adoption, “(W)e have to pass the bill so that you can find out what is in it, away from the fog of controversy.” The fog has substantially cleared, but not the controversy.
In 2010, there were about 45 million Americans uninsured for healthcare. Obamacare sought to insure about 30 million. Fifteen million were to be insured via the individual and employer mandates that impose penalties on individuals and employers who do not obtain the required insurance. The other 15 million were to be insured via the expansion of Medicaid eligibility from 100 percent of the federal poverty level to 133 percent.
What has Obamacare achieved? As of October 2015, there were 15.7 million new insureds. According to economist Paul Krugman, most people report high satisfaction with their coverage; insurance premiums are cheaper than expected; health care spending growth has slowed dramatically overall; employment growth has been faster than at any time since the 1990s; and the budget deficit keeps falling. All of this despite that some 22 states elected not to accept the Medicaid expansion and the employer mandate will not be in full effect until 2016.
At what cost? Employee deductibles since 2010 have risen six times faster than wages; 41 percent of Obamacare plans (75 percent in California) have narrow networks of 25 percent or fewer of the physicians in a rating area, such as a county; the “Risk Corridor” program, intended to help insurers and Obamacare-created insurance cooperatives offset losses from having to insure unhealthy people, has been grossly underfunded.
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Over half of the 23 Obamacare co-ops have failed, others are failing, and at least one major insurer may no longer participate due to its losses, while another is also incurring losses. Employers face extraordinary red tape. The IRS, which enforces the penalties, is underfunded and overwhelmed with resulting severe degradation of taxpayer service. The law has caused historic, unsettling legal clashes in the Supreme Court and between Congress and the president.
The first legal clash addressed whether a law that barred the courts from stopping the assessment of a tax prevented the Supreme Court from hearing the case, and if not, whether it was constitutional for Congress to penalize individuals for not buying insurance.
Chief Justice John Roberts concluded that the “penalty” looked like but was not a tax. Roberts then found that Congress’ power to regulate interstate commerce did not extend to forcing individuals to buy something. Four other justices agreed.
Justice Ruth Bader Ginsburg called their view “crabbed” and “stunningly retrogressive.” But Roberts then provided the 5-4 majority to uphold the law, finding that Congress could impose the “penalty” under the Constitution’s authority to levy taxes. The minority said, “This carries verbal wizardry too far, deep into the forbidden land of the sophists.”
Next the court considered language in Obamacare that limits subsidies to buy insurance to an exchange “established by the state.” The federal government established an exchange in 36 states.
A 6-3 majority upheld the subsidies in those states, stating Obamacare’s purpose compelled them to depart from the “most natural reading.” The minority found that “The somersaults of statutory interpretation” confused “honest jurisprudence.”
Coming up is the House of Representatives’ lawsuit contending that the administration was unconstitutionally paying $136 billion in unappropriated funds to insurers to keep consumer out-of-pocket costs low. If the House wins, insurers will either raise deductibles and co-pays and/or raise premiums, likely eroding public support. If the House loses, its “power of the purse” to counterbalance the president could be significantly weakened.
Although Casey Stengel managed the New York Yankees to seven World Series titles between 1949 and 1960, the Yankees fired him when he turned 70. Stengel commented, “I won’t make that mistake again.”
Unfortunately, there is no such certainty in public affairs. Irrespective whether Obamacare was a mistake, it is a mistake not to heed President George Washington’s counsel that “the alternate domination of one faction over another, sharpened by the spirit of revenge,” can lead to such disorder that a tyrant who promises order will rise “on the ruins of public liberty.”
Daniel O. Jamison is an attorney and chair of the health law section at Dowling Aaron Inc. in Fresno.