|Read the Association's press release on the ACA decision.|
Today the Supreme Court of the United States (SCOTUS) upheld nearly all of the Patient Protection and Affordable Care Act, commonly referred to as the ACA, paving the way for continued implementation of most ACA provisions. However, the court also found that Congress could not compel states to expand their Medicaid programs - a key provision of the ACA designed to ensure health care coverage for all Americans. The court’s decision is complicated, so let’s break it down a piece at a time.
What was the court really debating?
Though the ACA is an extremely large, far-reaching law, SCOTUS was really only ruling on two distinct parts of it:
1) Whether or not the government could compel someone to buy health insurance, and
2) Whether or not the government could withhold all Medicaid funding from states if they did not implement the Medicaid expansion portion of ACA.
What was the challenge to ACA?
Twenty-six states had challenged the so-called “individual mandate,” which says that people who don’t have health insurance need to get it, or pay a penalty. These states argued that it was unconstitutional to force Americans to buy health insurance.
So by upholding the law, the Supreme Court agrees that I’m required to buy health insurance?
No, actually. A large section of the ruling says that while the law can regulate many things that citizens do, it cannot regulate things we don’t do. In other words, you can’t be penalized for NOT doing something, in this case buying insurance. The ruling states that “the individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained.”
Wouldn’t that mean they struck down the individual mandate?
You’d think so, but it does not. When a law passed by Congress gets to the Supreme Court, the Justices assume all due diligence has been done, and that the American people want the law to remain on the books. We elect our leaders and expect them to pass laws that benefit us. If they don’t, we vote them out of office. As the ruling states, “It is not our job to protect the people from the consequences of their political choices.” Therefore the Supreme Court will do everything they can to find a way to make a law constitutional, or, as they put it, “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.”
So how did they justify the mandate?
In a nutshell, the court ruled that while forcing a person to buy insurance is not constitutional, forcing them to pay a tax for not buying insurance is. In other words, you don’t have to buy insurance, but you’ll be penalized if you don’t. And as the ruling notes, “for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more.” Since ACA was upheld, it will mean that the health insurance exchanges promised in the bill will become reality, creating more options for those who don’t have insurance.
Is that why Republicans are saying this is a tax increase?
Yes. The ACA language and the Supreme Court ruling estimate that as many as 4 million people each year will choose to pay the IRS rather than buy insurance. In 2014, the penalty will be $285 per family or one percent of income, whichever is greater. By 2016, it goes up to $2,085 per family or 2.5 percent of income. Again, health insurance exchanges are expected to create more options for lower-income individuals, and there is no tax increase for people who already have insurance.
What does this mean for kids?
Mostly good things. Children can stay on their parents insurance until they’re 26. Kids can’t be denied coverage for pre-existing conditions before they reach 19. (In 2014, this expands to all people.) Chain restaurants will need to display how many calories are in all of their foods, so people can have an easier time making choices to eat healthy. There’s a lot to like.
What’s not good?
ACA included a significant expansion of Medicaid in all states, covering anyone (childless adults included) whose income was 133 percent of the poverty line or below. This would add 17 million new individuals to state Medicaid roles, some of them children. The federal government would cover the full cost of this expansion for a few years, but then the responsibility for financing would be shared with the states. The ACA said that if a state did not comply with this Medicaid expansion, they would lose ALL Medicaid funding.
SCOTUS ruled this provision unconstitutional, arguing that the federal government was unduly coercing states into complying with the law. As the ruling succinctly puts it “the financial ‘inducement’ Congress has chosen is much more than ‘relatively mild encouragement’ – it is a gun to the head.” The ruling recommends that Congress allow states to opt out of the Medicaid expansion without penalty.
What will that mean for the 17 million who were to be added to Medicaid?
At this point there’s a lot that’s unclear such as which, if any, states will opt out. Governors that do opt out may face a backlash over not accepting federal funding that would provide their low-income constituents with insurance. The Department of Health and Human Services could conceivably reframe the expansion as a competitive grant program or find other financial incentives for states to participate. The bottom line, there’s a lot of gray area here when it comes to the Medicaid expansion, and this aspect of today’s ruling will be in play for some time.
What are the political ramifications of SCOTUS’ decision?
It pretty much guarantees that you’ll be hearing a lot more about “Obamacare” from the Republicans, and a lot more about “Obama Cares” from the Democrats. As mentioned above, Republicans will continually refer to it as a massive tax increase, whereas the Democrats will continually cite how health reform benefits the American people.
The House has scheduled a vote on repealing the ACA for July 11. It’s likely it will pass, but die immediately in the Senate. Any legitimate chance of repeal will come only if Romney is elected, and even then it could be tough to get the votes.
There’ll be a lot more on this in the coming days and weeks, so keep checking back to With All Our Might. If you have any questions, please contact Justin Beland of the Children’s Hospital Association. You can also follow Speak Now For Kids on Twitter for up-to-the-minute information.