In a short 6 weeks we will have a better picture if Obamacare is here to stay. By the end of June the US Supreme Court will be announcing their decision on whether subsidies are only available to those individuals securing their coverage through a state-based exchange. I wrote a SAB story in the end of February about the potential standoff if the Court rules that subsidies are for state-based exchanges only.
My thought was that the only way that Obamacare may collapse in a very short time would be IF the Supreme Court rules that subsidies are only available to those using a state-based exchange and IF Congress and the 27 states (including ND) do nothing to correct the situation (change federal law or adopt state-based exchanges). If the court rules that people utilizing the federal exchange are also eligible for subsidies, then nothing changes.
Most people are covered under an employer-based insurance coverage and do not purchase their coverage off the exchange. As a result they are basically sheltered from the possible impact of the court ruling. Insurance premiums continue to increase, partially due to the mandated changes from Obamacare but also due to demographic changes and medical inflation.
People are naturally opposed to change. Many are now comfortable with some of the benefits provided in Obamacare, such as first dollar coverage for preventive benefits (colonoscopies, breast cancer exams, etc.), birth control benefits, and the elimination of pre-existing condition limitations. Even though many of these benefits are popular, they have definitely increased the cost of insurance premiums. As I mentioned before, unless you pay for your own health insurance premium most people are sheltered to a great degree from these increases.
Let’s assume that the Supreme Court does rule that subsidies are only permitted for state-based exchanges. I predict that there will be a clamor by the public to make changes to the federal law to allow subsidies for those on the federal exchange as well or a push to adopt a state-based exchanges. US Representatives and Senators up for re-election in 2016 will feel this pressure and I am not optimistic that they will have the courage to let the system implode on its own which is inevitable under that scenario. People previously receiving subsidies will not be able to afford their existing coverage. This will mean even more uninsured and it further increases the premiums for those remaining in the system. This will ultimately result in a “death spiral” for health insurance premiums.
I am just not confident that Congress will have the backbone to let this happen. I know that the House has voted many times to repeal Obamacare. But that has been easy when they know that the bill will never pass in the Senate and if it did President Obama would surely veto the measure. They do NOT have the votes to override a veto. Their mantra of “repeal and replace” has gone nowhere.
So Republicans’ best chance would be to let it implode on its own and not pass corrective legislation. IF that were to happen, based on past experience, this President would most likely establish new federal rules correcting the situation and say that this is necessary since Congress has failed to do it. There is precedence for this – just look at immigration. Republicans seem powerless. I am so disappointed that Republican leadership and the Courts have not challenged this abuse of power. Court decisions take forever with endless appeals.
So however the Supreme Court rules at the end of June, I am fearful that Obamacare is here to stay. I hope that Congress surprises me, but I have my doubts.