Does the Affordable Care Act Have Nine Lives?

March 5, 2015

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Today’s oral arguments before the U.S. Supreme Court are just the latest challenge to the Affordable Care Act (ACA), the sweeping healthcare reform law enacted in 2010 also known as “Obamacare”. And it is not likely it will be the last.

This isn’t the first time the pundits declared the ACA DOA:

  • In 2009, the Senate was poised to approve its version of the ACA when a special Senate election in Massachusetts to fill the seat left vacant at the death of Ted Kennedy changed the power alignment in the Senate. Democrats seemingly lost their ability to push the law through without Republican votes and the bill’s chances of passage seemed miniscule. Yet Democrats managed to resuscitate the bill and send it to President Obama’s desk just two months later.
  • In March 2012, the ACA went before the Supreme Court for the first time (NFIB v Sebelius) to challenge a central element of the ACA – the requirement that most individuals buy health insurance or pay a penalty to the IRS. Solicitor General Donald Verrilli was widely panned in his defense of the mandate and many thought the ACA was done for. Three months later, the Court ruled the mandate constitutional and the law lived on.
  • In Congress, the House of Representatives has voted more than 50 times to repeal all or part of the law.

Now, in King v. Burwell, the Court is hearing a challenge to another central element of the ACA – the ability for people with low and moderate incomes to get tax subsidies to offset part of their insurance costs. The case focuses on the ability of 8-to-9 million people in 34 states who buy insurance through HealthCare.gov. Nearly 90 percent of those consumers received subsidies that cut the cost of coverage to an amount they can afford. If the Court rules in favor of the challengers, many predict that most of those who bought coverage will drop it when their subsidies go away. Dire predictions of a “death spiral” in the insurance market and rising bad debts for hospitals and other healthcare institutions are being written every day.

The Court won’t rule until late June before they adjourn for the term. If ultimately the Court upholds the subsidies the ACA will have survived another near-death experience. If the Court agrees with the challenge there will be a scramble in Congress and in the 34 states to find a way to preserve coverage for those who have it but the likelihood of future coverage growth would be very small.

Either way, this won’t be the last time ACA supporters will have to hold their breath. With each repeal attempt the bills died in the Senate. Now the GOP controls both the House and Senate but as long as Obama is in the White House repeal is out of the question. That’s one (of many) reasons conservative political groups are planning to spend north of $1 billion to elect a Republican President in 2016. This fight is far from over.