The Supreme Court’s Surprise that Wasn’t

Those watching the U.S. Supreme Court process on the King v. Burwell suit that almost upended insurance subsidies for about 6.4 million Americans knew that three outcomes were possible – 5-4 for the plaintiffs, and 5-4 or 6-3 for the government. That indicated to me a two-thirds probability of a pro-Affordable Care Act ruling.

carygrantIntellectually, that’s what I expected. Too many long-standing and widely-shared judicial precedents would have been trampled by a ruling for the Libertarian/Cato Institute’s lawsuit – including the core Chevron principle that “context matters,” and the Pennhurst principle that federal laws shall not “surprise states,” among others. With a ruling the plaintiffs, the Court’s only way out would be to repeat the 2000 scandalous ruling in Bush v. Gore that the Court’s decision installing George W. Bush as President would represent no precedent for any future case.

Still, it would have been foolhardy to assume any certain result from this Supreme Court. Happily, the decision was not close. The window of opportunity for using the Supreme Court to disassemble the ACA is now all but ended, even as a baker’s dozen of cases are still in circulation. Continue reading “The Supreme Court’s Surprise that Wasn’t”

Republicans’ New Bridge to Nowhere

It’s been nearly 5 and 1/4 years (63 months for those counting) since President Obama signed the Affordable Care Act into law.  Since then, Republican Congressional leaders have continually declared their intentions to advance their own plan to repeal the law and replace it with something else.  This took on new urgency this year because of the U.S. Supreme Court’s (SCOTUS) decision to hear the King v. Burwell lawsuit that would eliminate all insurance subsidies to ACA private coverage enrollees in the 34 states with federal — as opposed to state — run exchanges/marketplaces.

New federal data show that 6.4 million would lose their insurance subsidies if the Court rules for the plaintiffs (King) and against the government (Burwell).

All this year, Republican lawmakers in the Senate and House have been insisting they would have a replacement plan out and even scored by the Congressional Budget Office before a SCOTUS decision in late June (an assurance made by House Ways and Means Chairman Paul Ryan (R-WI).

1 McCarthy Rep
US House Majority Leader Rep. Kevin McCarthy (R-CA).

Now, House Majority Leader Kevin McCarthy (R-CA) has announced the Republicans will have no replacement plan to unveil until after a Supreme Court decision is released, expected late this month, and Senate Republicans are stating the same.  As Jon Cohn notes in the Huffington Post, not only is there no plan, Republicans have not even held a hearing on the matter — though they repeatedly berated Obama Administration officials, notably Health & Human Services Secretary Sylvia Burwell, for having no contingency plan in the event of an adverse ruling in the King case.

What about Congress? [asked Supreme Court Justice Antonin Scalia]  You really think Congress is just going to sit there while – while all of these disastrous consequences ensue?”  The Solicitor General responded “well, this Congress, I ….,” a response which generated laughter.

Some may quibble and point to a number of ACA replacement bills filed by various members.  None of them have even received a committee hearing, much less a committee markup, or a vote in either chamber.  The most prominent replacement proposal, the Patient CARE Act, from Sen. Richard Burr (R-NC) and Orrin Hatch (R-UT) and Rep. Fred Upton (R-MI), which has had two public unveilings since 2013, has yet to be translated into legislative language and sits as a well-trumpeted narrative description of a non-existent bill.

I believe it’s pretty plain what is happening here.  Republicans are quite capable of uniting around what they all oppose and quite incapable of uniting behind what they would propose as an alternative.  With firm control of the House and Senate, the GOP has a golden opportunity to advance a comprehensive and clear alternative to the ACA.  They just can’t do it — short, medium, or long term — it’s a bridge way too far for them.  A bridge to nowhere.

King v. Burwell — The Actuaries Explain All

In the late 1980s, Dr. William Hsiao, a colleague of mine at the Harvard Chan School of Public Health, my former professor, and a globally renowned health economist, explained to me the difference between an accountant and an actuary.  “An actuary is an accountant with a sense of humor,” said he.  Since then, I’ve carried large respect for the professionals who call themselves actuaries.

Their association, the American Academy of Actuaries, has published an issue brief that demands attention: “Implications of Proposed Changes to the ACA in Response to King v. Burwell.  King v. Burwell, if you don’t know, is the case currently before the U.S. Supreme Court that challenges the legality of insurance subsidies being provided to eligible health care consumers in states with federal as opposed to state health insurance exchanges.  A decision is expected in late June.

Straight shooters, they are.  Here are excerpts from their conclusions:

“If federal premium tax credits become no longer available in FFM (federally facilitated marketplaces) states, enrollment in the individual market would decline precipitously among those previously eligible for premium assistance.  Moreover, individuals with high-cost health care needs would be more likely to remain enrolled, while individuals with low-cost health care needs would be more likely to exit the market.  Such adverse selection would cause average health costs, and therefore premiums, to rise…”

“Potentially millions of people would drop coverage, and the average costs of those remaining insured would soar.  Insurers could face solvency concerns, especially those for whom exchange business is a relatively large share of their book of business…”

“…extending the premium subsidies through the 2016 plan year (or longer) could help mitigate these concerns for the short term. … However, if subsidies are made available only to those already receiving them, individuals who would be newly eligible for subsidies, due for instance to a change in income or loss of employer-sponsored coverage, would not benefit from the temporary premium subsidy extension.  This would lead to lower overall enrollment in the individual market, as some individuals would transition out of coverage, but few would transition in…”

“Even if a temporary extension of premium subsidies would help avoid disruption in the short term, it is likely that the disruption would only be delayed, not avoided altogether.  If the subsidies are ultimately eliminated, potentially millions of individuals will drop coverage and premiums will increase substantially…”

“Weakening or eliminating the individual mandate could result in adverse selection that would raise premiums and threaten the viability of the market … although such voluntary incentives would provide incentives for healthy individuals to obtain coverage when first eligible, they would likely not be as effective as a strong individual mandate.”

A lot of damage would be done.  Anyone who suggests they know how the Court will decide is deluded.  No one, no one, predicted the outcome of the 2012 SCOTUS decision on the constitutionality of the individual mandate.  No one knows the outcome of this case either.  But, thanks to the Actuaries, we do know the results of a decision against the government.