Avatar of admin

by

Testing Obamacare

February 18, 2015 in Economics

By Michael D. Tanner

Michael D. Tanner

Two weeks from today, the Supreme Court will hear arguments in King v. Burwell, the most important challenge to Obamacare since the Court upheld the constitutionality of the individual mandate in 2012 (thanks to Chief Justice Roberts’s bizarre legal interpretation). Given the possibility that the case could punch a very large hole in the health-care law’s implementation, it has unsurprisingly been the subject of much commentary and analysis. Unfortunately, most of that commentary and analysis has been wrong.

For example, the case has nothing to do with the constitutionality of Obamacare. No matter how the Court rules, it will not “strike down” the Affordable Care Act. The case concerns one provision of the law, subsidies provided through the exchanges, and whether those subsidies can be offered through federally run exchanges as well as through exchanges “established by a state.” That’s an important provision, to be sure, but even if the Court rules that subsidies cannot be offered through a federal exchange, most provisions of the law will remain in effect.

In fact, it could be agued that the plaintiffs are actually seeking to have the law implemented precisely as written.

President Obama illegally rewrote the ACA. Will the Court reverse him?”

Nor would a decision to strike down the subsidies necessarily mean that millions of Americans will lose their insurance overnight. No doctor is going to rush into someone’s hospital room and pull the IV out of his arm. Insurance plans don’t work that way, not in the real world.

One can fairly say that those raising the alarm about canceled or unaffordable policies have had a rather late conversion, since Obamacare itself notoriously forced the cancellation of some 6 million insurance plans that failed to meet its criteria. Obamacare also drove up the cost of insurance for millions of Americans. But that is exactly why those now complaining about unaffordable insurance have something of a point. Because Obamacare outlawed many affordable policies and drove up premiums generally, its operation is extremely dependent on shifting much of that cost to taxpayers through subsidies. Therefore, if some of those subsidies are ruled illegal, there will be Americans who will have difficulty paying their premiums — especially at Obamacare’s inflated prices. In a sense, removing the subsidies simply brings the law’s full cost home.

Does that mean some people may choose to give up coverage? Possibly, but fewer than commonly thought. To date, roughly 10.5 …read more

Source: OP-EDS

Leave a reply

You must be logged in to post a comment.