Over the last three days the United States Supreme Court has heard arguments concerning the constitutionality of the Affordable Care Act (ACA), or “Obamacare” as it has commonly become known. The justices will now convene and hold a vote to see how the majority of the Court has decided regarding the individual mandate, and the law as a whole. According to many seasoned analysts who watched the hearings, the Court may very well rule that the individual mandate is unconstitutional. Jeffrey Toobin of CNN went as far as to call the hearings a “train wreck” for the government, saying he saw almost no way that the individual mandate could survive. Yesterday many of those same analysts came out of the hearings saying the entire law may be in jeopardy in addition to the mandate. These predictions might all be inaccurate, but at the very least it would seem prudent to ask what would happen if the entire law is overturned.
The best answer to that question is that the United States would go back to the health care system it had before Obamacare. A number of Obamacare’s provisions have already gone into effect. As a result, a number of groups could see adverse effects if the bill is overturned.
Included are 2.5 million people under the age of 26 who are currently covered under the law. The ACA requires insurance companies to let parents include their “children” under age 26 on their policy. Many college students and recent college grads have taken advantage of this law. If Obamacare is overturned, insurance companies will no longer be required to cover these young people under their parents group plan, which would likely mean millions being dropped from coverage.
Millions of seniors have also benefited because of Obamacare through the closing of what is commonly called the “donut hole” in Medicare Part D. Before the ACA, seniors were forced to pay for prescription drugs until their costs reached a certain point. The ACA closed this gap for four million seniors, who have seen their prescription drug costs reduced by hundreds of dollars each year as a result. If Obamacare is repealed, the “donut hole” will open back up, and those seniors will have to start paying those hundreds of dollars each year once again.
Over 54 million people have taken advantage of the Obamacare regulation which requires insurance companies to provide certain preventative care, like cancer and diabetes screenings, for free. If the law is overturned, Americans will either have to start paying for these services, or simply go without.
Finally, Obamacare also made it illegal for insurance companies to rescind coverage once a person gets sick, or to put annual caps on the amount of money a policy will cover. If the law is overturned, insurance companies will once again be allowed to drop an individual after they get sick, or if the person starts costing the insurance company more than the “cap” under a given policy.
But the real impact of overturning Obamacare would come in the future. Under Obamacare, in 2014 insurance companies would have no longer been able to exclude individual based on pre-existing condition. The pre-existing condition exclusions kept millions from being able to purchase insurance in the past. Many companies were already beginning to get rid of their pre-existing exclusions in anticipation of Obamacare’s 2014 changes. If the law is repealed, insurance companies will once again be allowed to exclude based on pre-existing conditions. As a result, insurance companies will return their previous practice of accepting the healthy, who cost them the least, while excluding the sick who cost them the most.
The problem for hospitals is that other laws, outside of Obamacare, mandate that an individual is entitled to stabilizing treatment even if they cannot afford to pay. If an uninsured individual goes to the emergency room with a heart attack the hospital will still have to treat them, and those costs will eventually be transferred to the rest of the population through higher fees, and higher premiums. It was this kind of dilemma which led to skyrocketing premiums before Obamacare was passed.
Obamacare was also scheduled to implement a rate review board. Under the ACA, insurance companies would have been required to spend 80% of what they take in premiums on actual care for their customers, as opposed to profits or big bonuses for executives. The ACA also would have established a rate review board with the power to reverse insurance company premium increases. If the law is overturned, all of the devices designed to control premium increases will be done away with.
Congress could, theoretically, replace Obamacare with something else. However, the prospects for this scenario are dubious to say the least. President Obama and the Democrats in Congress were barely able to pass the ACA even with large majorities in both chambers of Congress and control of the White House. Neither party will likely have that kind of power after the next election. Republicans certainly will not have a filibuster-proof majority in the Senate as the Democrats did in 2009. When the House Republicans voted to repeal Obamacare in 2009 they never were able to pass a health care plan to replace what they voted to get rid of, even with their large majority in that chamber.
Realistically, if the Supreme Court overturns Obamacare what it will likely is a continuation of the old system for many more years, if not decades. Passing health care reform is unbelievably hard to do given our governmental system. If the most recent attempt is struck down by the courts, another successful attempt cannot be seen anywhere on the horizon.