Obamacare Survives Third Court Challenge | Citizens Against Government Waste

Obamacare Survives Third Court Challenge

The WasteWatcher

On June 17, 2021, the Supreme Court of the United States tossed out the lawsuit, California et al v. Texas, which challenged the constitutionality of the Patient Protection and Affordable Care Act (ACA), or ObamaCare.  The decision declared that the plaintiffs “have not shown a past or future injury fairly traceable to defendants’ conduct enforcing the specific statutory provision they attack as unconstitutional.”  The 7 to 2 decision, written by Justice Stephen Breyer, was supported by most of the other justices with the exemption of Justices Samuel Alito and Neil Gorsuch.

Justices Samuel Alito and Neil Gorsuch wrote the dissent, with Alito writing, “Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two.  In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue.”

Justice Clarence Thomas wrote his own separate concurring opinion which stated, “This Court has gone to great lengths to rescue the Act from its own text … So have the Act’s defenders, who argued in first instance that the individual coverage mandate is the Act’s linchpin, yet now, in an about-face, contend that it is just a throwaway sentence.  But, whatever the Act’s dubious history in this Court, we must assess the current suit on its own terms.  And, here, there is a fundamental problem with the arguments advanced by the plaintiffs in attacking the Act – they have not identified any unlawful action that has injured them … Today’s result is thus not the consequence of the Court once again rescuing the Act, but rather of us adjudicating the particular claims the plaintiffs chose to bring.”

In the August 21, 2020 Citizens Against Government Waste (CAGW) blog, “Supreme Court to Hear Case to Overturn Obamacare in November,” we discussed the Court’s decision to take up the case, Texas v. California, and again review the constitutionality of ObamaCare.  The lawsuit to turn over ACA’s constitutionality begin in earnest soon after the “Tax Cuts and Jobs Act” was enacted in 2019, which reduced the tax penalty for not purchasing health insurance to zero dollars as of January 1, 2019.  The ruling inspired many Republican state attorneys general and governors to declare the ACA’s individual mandate to purchase health insurance no longer constitutional because it produces no tax revenue.  Recall that Chief Justice John Roberts ruled in the first challenge to the healthcare law in 2012 that ObamaCare was constitutional because the individual mandate penalty for not buying health insurance was a tax, which people could choose to either pay or buy insurance instead.

CAGW warned that the months following the Court’s decision to take up the case would be filled with hysteria and false declarations that ObamaCare would be overturned and people with pre-existing conditions would be left out in the cold.  CAGW said that would not be the case and that during the litigation process no one would see any changes made to their health insurance due to the lawsuit.  We criticized Democrats that used the lawsuit as a cudgel to frighten people that they would lose their healthcare and that in reality, the court would likely uphold ACA.

President Biden declared the June 18 decision a “major victory for all Americans benefiting from this groundbreaking and life-changing law” and “After more than a decade of attacks on the Affordable Care Act through the Congress and the courts, today’s decision – the third major challenge to the law that the U.S. Supreme Court has rejected – it is time move forward and keep building on this landmark law."  Former President Obama said that the ruling, “reaffirms what we have long known to be true:  the Affordable Care Act is here to stay."

It is unlikely that ACA will face new court challenge as it has become more embedded in the nation’s healthcare system.  (One ACA related case is still working its way through the courts.)  But this does not mean serious reforms are not needed, as premiums continue to climb and its mandated benefits are costly, often imposing unnecessary burdens on consumers purchasing plans in the marketplace, such as a single man being required to carry coverage for maternity care.

One can expect the inclusion of “temporary” expanded and additional new premium tax credits included in the “American Rescue Plan Act” for additional COVID relief will likely become permanent.  As noted in CAGW’s February 2021 blog, “Biden’s Budget Busting Boondoggle,” these subsidies will cost taxpayers $34.2 billion over 10 years and will continue to grow.  ACA’s original taxpayer subsidies were provided for people with household incomes between 100 and 400 percent of the federal poverty level.  But the February COVID rescue plan allows those with incomes between 100 to 150 percent of the federal poverty level (FPL) to contribute nothing to their premium costs, leaving it to taxpayers to pick up the tab.  The COVID relief plan also lifts the 400 percent FPL cap and provides subsidies for those with incomes above the 400 percent and are well-off.   For example, a family of four headed up by a 60 year old earning $340,000 could receive a taxpayer subsidy of $1,400.

These increased subsidies will do nothing to encourage competition or lower premium costs for health insurance, as the subsidies go directly to private insurers.

That is why free-market conservatives that believe in empowering individuals to access the kind of healthcare plan they want, while not allowing Washington politicians and bureaucrats to make the decision for them, think that ObamaCare can no longer be repealed or replaced but must be reformed instead.  Their ideas on how to accomplish this can be found in the Healthcare Choices Proposal, offered by the Health Policy Consensus Group and in a policy brief offered by the House Republican Study Committee, “A Framework for Personalized, Affordable Care.”  For example, the Health Care Choices 20/20 proposal would allow those who receive ACA subsidies, Medicaid, and the Children Health Insurance Program have the option of applying the value of their subsidy to shop for a private plan of their choice.  This change would encourage competition that will help lower premium costs.

Another idea would allow states to build on the Trump administration’s success in leveraging ACA’s Section 1332 waivers to utilize ACA funds to increase healthcare options for high cost patients, those with pre-existing conditions, by creating reinsurance programs.  Several states, such as Maryland, designed such programs and saw healthcare premiums go down while those with chronic healthcare conditions gained access to health insurance in the ACA marketplace.

Meanwhile, Congress’s socialists continue to push for single-payer healthcare through its Medicare for All Plan that would take away private insurance and put bureaucrats in charge of what kind of healthcare patients will receive while raising taxes to pay for its hefty $32 trillion price tag over ten years.  Americans will have a weighty choice to make as Congress debates this important and life-changing issue.

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