Imagine for a moment a scenario in which a wealthy person is critically ill. The situation could improve, but it does not look good. Relatives appear like vultures looking for carrion, each with an agenda and ideas for what to do after the patient passes away. This may be a fairly good analogy for what may happen soon with Barack Obama’s only “accomplishment,” his socialized, expensive, government sponsored health care plan.
In late June, the Supreme Court will render a decision with the very life of Obamacare hanging in the balance. Early guesses based upon the questions the Supreme Court justices asked during oral arguments suggest that the court is divided, with Chief Justice John Roberts and Justice Anthony Kennedy as the deciding votes.
The Affordable Care Act, which passed with only Democrat votes, was designed around some fragile principles. First, insurance companies could not turn anyone away because they had pre-existing problems. This is a little bit like forcing a mechanic to fix a car for a flat $100 whether it’s a flat tire or a transmission.
Second, healthy people would be forced by the government, using the Internal Revenue Service as a sort of enforcing Gestapo, to participate in large enough numbers to subsidize those people who did have pre-existing conditions. Of course, this did not happen, as many young healthy “normal” people could merely skipped the inflated insurance premium and enrolled if they got sick or injured later, since they could not be turned down for a pre-existing problem.
Third, the government, meaning the taxpayers, would subsidize most or all of the premium for low or middle income households. This would allow people who could not previously afford insurance to participate in the state exchanges.
This three-legged stool needed all three legs to be stable. The lack of participation by healthy people who might be willing to pay inflated prices for something they may not ever be able to use (since their doctors reject Obamacare) destabilizes the second leg of the stool. The third leg of the stool, the government subsidy, is what is at stake in the Supreme Court now.
The issue before the court is whether federal subsidies can legally be applied in those states that do not have state insurance exchanges. Most states do not. Georgia does not. If the Supreme Court rules along a literal interpretation of the wording of the Affordable Care Act, then the federal government will be able to subsidize coverage only in those states that have set up their own health insurance markets. That would mean the end of federal subsidies for two thirds of the fifty states.
As coverage became even less “affordable,” participants will begin dropping out in large numbers. It is estimated that 8 million people will lose coverage, but these estimates sometimes are inflated for partisan purposes. At any rate, it is likely that healthy people would just drop their coverage rather than take the huge increase in insurance premiums. This will create what the insurance industry calls a “classic death spiral” in which Obamacare simply implodes financially.
For students of politics, this will be like a vulcanologist watching a tsunami unfolding. Recall that this health care law was imposed by Democrats without a single bipartisan vote. The Republican Party is now in charge of both houses of Congress, so it will be up to them to do something, and do it quickly.
During oral arguments before the Supreme Court, Justice Alito raised a suggestion that the court might delay the effective date of its decision to give people time for whatever decisions need to be made. There will not be much time because enrollment for 2016 health law plans is scheduled to begin November 1, 2015. It seems that the Republican Party will have until then to come up with some solution, and it will probably be a bipartisan one this time.
Republicans must step up to the plate and fix this problem created by the other party not only because they are the ones in the majority, but also because 26 of the 34 states that will be most affected by the ruling be expected in June have Republican governors, and 22 out of 24 Republican Senate seats are up for reelection in 2016.
Congress likes to kick cans down a road sometimes to avoid making decisions. There is a bill introduced by Sen. Ron Johnson (R—Wisconsin) that would continue federal subsidies only for existing customers until September 2017. This would kick the can far enough down the road that the next president and the next Congress would have to come up with a complete solution. Johnson’s bill would also repeal the mandate for individuals to buy insurance and for larger employers to offer coverage to their workers.
Republicans, however, will not be operating in a vacuum. They have a majority in both houses of Congress, but Obama himself will likely veto anything they propose if it changes his health-care law in any way. There may not be enough votes to override his veto, but that may become a moot point if Obamacare goes into a death spiral before the 2016 election, which is a strong possibility.
Meanwhile, the price of your health care premium is going up. Barack Obama gave us his word that a family health care premium would decrease by $2500 per year. Of course, he also said because keep our doctor. At any rate, the reality is that premiums have increased in 45 out of 50 states by 24.4% in the non-group market compared to what would’ve happened without Obamacare. Premiums are increasing in excess of 35% in nine states (Brookings Institution study).
It is a complex situation. The coming decision from the US Supreme Court affects health care, the nation’s economy, the nation’s politics, and partisan divisions among people and between state and federal governments. It will be a major factor in the 2016 election. It will impact employment. It will influence the optimism or pessimism that will increase or decrease the American dream.
So the patient, the health care law itself, is in critical condition, and it does not look good for its long-term survival. Watch the news from multiple sources to avoid being influenced by the prejudice in the mainstream press. If you do, you may see scavenger birds circling overhead.