Achieving Balance After Another ACA Decision

As the health care community waits for the outcome of King v. Burwell, the latest Affordable Care Act (ACA) challenge, the focus has been on a key question:  What happens if the Supreme Court doesn’t allow the federal healthcare marketplace to continue to offer premium tax subsidies? But how such a decision would affect the rate of insurance is just the tip of the iceberg. Eliminating federal subsidies impacts a whole range of ACA policies that were carefully navigated during the legislative process. As we wait for legal decision, we have an opportunity to examine whether the choices made in 2010 remain on solid ground if a significant portion of subsidized coverage disappears.

The ACA is the result of a complex web of compromise and, of course, a healthy dose of politics. By its very nature, the legislative process seeks to balance interests and assign responsibilities. In the case of the ACA, this meant that a dramatic coverage expansion helped define which stakeholders – providers, insurers, employers, and others – would benefit down the line in the form of new customers (and revenue) or reduced costs.  In turn, it was reasoned, these stakeholders would bear burdens, in the form of reduced revenue or new tax or regulatory obligations, to help pay for the legislation.

If only the trade offs were that simple. In reality, complex and often charged discussions took place with numerous stakeholders and were linked to policies that extended beyond healthcare coverage (e.g. Medicaid drug rebates). Additionally, since the law passed numerous efforts to repeal, amend, or delay key ACA financing components – including insurer fees, medical device taxes, hospital subsidies, and the small business mandate – have surfaced and threatened to upend the ACA’s attempted balancing act.

We resurface these sticky issues here, because they are sure to come up in full force if the court sides with King. This case pries open (once again) some fundamental ACA choices:  what is provided for, and expected of, key health care stakeholders? Here’s a snapshot of a few of those choices that we may have to review very soon.

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Claudine Swartz, Strategic Policy Solutions (Day Health Strategies Affiliated Consultant); Tom Dehner, Health Management Associates; Rosemarie Day, Day Health Strategies

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3 replies »

  1. Should a SCOTUS majority strike the ACA federal HIX provision, it will be dispositive evidence of the triumph of partisan ideology over clear legislative evidence. We already know that there are 3 votes — Alioto, Thomas, and Scalia — to strike down the ACA using the pretext of whatever case comes before them. They will overthink any bit of arcana that suits their pretzel logic ends.

    That leaves Kennedy and Roberts in play. I’m really hoping for 6-3 to uphold Burwell in light of the clarity of “congressional intent” as set forth centrally in Section 1321. 6-3 would send the message “ENOUGH already, take this PoS back to the Hill for repeal or re-write if you wish. Quit bothering us with this kind of fluff.”

  2. I have a bad feeling about this, if only because in American politics there’s only one rule: the words “reasonable and intent” have nothing to do with anything. A pro-King ruling would flip Washington upside down. My guess is that the question has less to do with what the justices think of the merits case than what they think of Obamacare.