Editor’s note: This article is part of a series of blog posts by leaders in health and health care who participated in Spotlight Health from June 25-28, the opening segment of the Aspen Ideas Festival. This year’s theme was Smart Solutions to the World’s Toughest Challenges. Stayed tuned for more.
On June 25, Chief Justice Roberts quoted Marbury v. Madison in writing for the six-judge majority that decided King v. Burwell, a challenge to the tax subsidies for millions of Americans’ health insurance payments. Roberts wrote “in a democracy, the power to make law rests with those chosen by the people. Our [the Supreme Court’s] power is more confined — ‘to say what the law is’.”
He went on to say that “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we [the Supreme Court] must interpret the Act in a way that is consistent with the former and avoids the latter.”
King v. Burwell involved the individual tax subsidies available to people purchasing health insurance who did not have affordable coverage in the workplace, and whose incomes ranged from 100 percent of poverty to 400 percent of poverty.
The design of the new insurance marketplaces included three essential elements: 1) a prohibition on insurance companies using pre-existing medical conditions to block the purchase of coverage, 2) a personal responsibility provision — those individuals who could afford to purchase health insurance must enroll in a health plan or pay a fine, and finally, 3) making tax subsidies available to individuals who didn’t have an employer paying a share of their costs, making health insurance affordable.
Mr. King and the other plaintiffs asserted that the tax subsidies should only be available to individuals in states where there was a state-run marketplace, and not to the citizens in the 34 states using the federal marketplace for health insurance. The plaintiffs alleged that when Congress used the phrase “established by the state” as a definition of markets in the law, that they intended to limit the tax provisions to only those states.
The government argument, which prevailed, was that Congress always intended to create a national program where individuals would qualify for subsidies based on income, not geography. And that without tax subsidies, individuals wouldn’t be able to afford coverage, and would drop their insurance. Rates were predicted to skyrocket for those remaining in the marketplace, and millions of people were predicted to lose their insurance coverage in 34 states.
The Strongest Possible Rationale
The Supreme Court decision to uphold the structural framework of the Affordable Care Act in King v. Burwell should finally bring an end to the efforts to invalidate the health reform law signed by President Obama in March 2010. While it is likely that some political votes on repeal will still occur in both the House and the Senate, this case represents the final serious legal challenge to the law.
And a solid Court majority used the strongest rationale to uphold the law. It would have been possible for the Justices to use an earlier legal precedent from the Chevron case, to defer to the Internal Revenue Service (IRS) ruling that all individuals were entitled to tax subsidies regardless of whether they lived in a state with a state marketplace, or used the federal program.
That rationale would have upheld the law for now, but could have been challenged by a future Administration with different agency leadership.
The Chief’s opinion in King goes further, however, finding that Congress intended for every qualified individual to benefit from the subsidies, regardless of where they live.
Five Years In
After five years, the Affordable Care Act is working as intended: Millions of Americans now enjoy the financial security and peace of mind that come with knowing that if they or a family member get sick, they won’t lose their home or have to declare bankruptcy to pay for necessary treatment.
Insured consumers can now access preventive health care at no cost, including cancer screenings and birth control, to stay healthy and productive longer in their lives. Parents are able to enroll their young adult children on a family plan until age 26, and the “medical loss ratio” continues to return millions of dollars to consumers when the insurance company charges too much for overhead expenses. No longer can women be charged more than men for health insurance, and seniors and disabled Americans are saving discounts on their medicines.
By the close of the second open enrollment period in March of 2015, over 10 million Americans have now insured themselves and their families. There are competitive markets in states around the country, giving people choices that they’ve never had before, and insurance rates have stayed far lower than predicted. This is very good news for consumers in America who still need affordable health insurance, and can be confident that the law will be there in the future.
Already the numbers are impressive. Sixteen million Americans who previously had no insurance now have coverage. Nearly a third of previously uninsured Americans are insured today. In fact, the uninsured rate in America is the lowest it has ever been, since records have been kept.
There is more good news for everyone — regardless of how you get your health insurance: The price of health care is growing more slowly in the US than in the past 50 years! Americans who get their insurance through their jobs are paying about $1,800 less per year than they would without the law.
The health delivery system is also getting better for everyone. Fewer people have suffered or died from hospital acquired conditions, fewer patients have gone back to the hospital shortly after release without good follow-up care, and many fewer babies have been delivered at early term, meaning fewer babies face serious health issues at birth and into their lives. Doctors are working hard to keep their patients in healthier condition, and patients who suffer from chronic illnesses have benefitted from better care coordination. Slowing health costs and improving care outcomes represent a win/win for American consumers.
Just recently, the Congressional Budget Office announced that a repeal of the Affordable Care Act would cost a minimum of $137 billion over the next decade, and could increase the federal deficit up to $353 billion. In addition to adding a huge increase to the deficit, repeal would also add an additional 19 million Americans to the ranks of the uninsured. It seems hard to believe that even the most ardent opponents of Obamacare would support those outcomes.
As we look toward the future, health markets will begin their efforts again next Fall to enroll more individuals, and the President will be working with Governors, health providers, and community leaders to continue Medicaid expansion in the 20 states which have not yet accepted the extremely generous federal cost-sharing offer for the newly insured low-income families in their states.
Efforts to improve health conditions for patients who need acute care will be accelerating, shifting government payments from paying for the volume of services to rewarding good health outcomes. And improvements in population health, particularly around smoking cessation and obesity prevention will continue. The overall goals of better population health, better patient care, and lower costs are better aligned with payment systems thanks to the Affordable Care Act.
While we have a long way to go to make sure that all citizens have opportunities to lead longer, healthier, and more productive lives, we are making real progress.
Hopefully, with this latest strong Supreme Court opinion upholding the law’s framework for providing affordable coverage to millions of Americans, we can turn our focus to health and care improvements for the future.
In Congress and throughout the country, there is a lot of agreement that health costs need to come down, and health outcomes need to improve in the US. Those efforts have begun, and today there’s a huge opportunity for government officials, health providers, employers, workers, and families to work together to produce a healthier America.
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