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As Obamacare Turns

As Obamacare Turns

As the World Turns, Guiding Light, General Hospital … Obamacare?  Well, Obamacare may not have the spice and scandal, but its many twists and turns remind us a bit of your Mom’s soap operas of old.

In its short tenure, poor Obamacare has been struck up and struck down so many times, and in so many different ways, that figuratively it has been in and out of the famous Port Charles, N.Y. soap opera hospital multiple times. The latest plot twist: last week, a federal judge in Texas struck down the Affordable Care Act (ACA) as unconstitutional.

Going back in time in the saga, remember that then-President Obama and Democrats passed the individual mandate as part of the ACA. If you don’t have coverage you get levied a “penalty” on your income taxes. Of course, Democrats argued it was not a “tax,” but a way to ensure enough funds were available to cover sicker individuals and all the benefits they get in the ACA’s Exchanges if healthier folks did not enroll.

Then came the U.S. Supreme Court, which ruled that the “tax that was not a tax” was indeed a “tax” and, therefore, the law was valid. The law was not really compelling someone to do something he or she didn’t want to (buy insurance); but, if the average citizen didn’t do what the law said (buy insurance), they would have to pay a “penalty” – well, I guess a “tax” – anyway. It was deemed a reasonable public policy, as tortured as the ruling seemed to be.

Next came the GOP Congress. Because it couldn’t repeal the whole ACA and pass a replacement, it settled on gutting one of its main provisions. As part of Trump’s and the Republicans’ HUGE tax cut package, it “zeroed out” the individual mandate “penalty” – shoot I did it again, “tax” – but left the language in place for the future.

Shortly thereafter, in the ultimate of hypocrisies given their actual position, Republican states then sued to overturn the whole law, arguing that huge costs will now accrue to them without the individual mandate “penalty” – okay, “tax,” now I have it! – in place. Democratic states (that intervened to save Obamacare) argued that, well, the mandate was still in place, although it was zero right now.

U.S. District Judge Reed O’Connor – the latest actor in the soap opera saga – said that the entire law was now invalid because the individual mandate “tax/penalty”– let’s settle on this – was eviscerated in the late 2017 tax act. He ruled that it supported the pre-existing condition and guaranteed issue coverage protections, among others. In essence, the public policy nexus of the entire law is gone and it has to be thrown out in its entirety.

Well, the law remains in place due to expected appeals. It could go all the way back to the Supreme Court, where Chief Justice John Roberts played the deciding role last time. Donald Trump and many Republicans are now cheering the decision and talking about teaming up with Democrats to pass “truly great healthcare” – or something like that. After all we have seen on the Hill, it is hard to trust their motives. Democrats, who take over control of the House again in early January, are promising to be active in the appeals process and want a quick decision by the Supreme Court. They don’t seem interested in compromise here.

While the Supreme Court could immediately intervene, the case now will go to the 5th Circuit Court of Appeals, where Republican appointees hold a majority (unlike the Democratic-appointee dominated 9th Circuit that seems to be over-ruling Trump’s travel bans and border measures). But whether our courts play politics – what! – is a topic for another soap opera.

Some say O’Connor got it exactly right. It seems consistent with the Supreme Court ruling and Congress’ original intent. O’Connor went to great lengths to use Roberts’ view that the Cobstituition’s commerce clause did not make the ACA valid but that Congress’ taxing power did. Judge O’Connor opined that with no “tax/penalty,” there is no shared responsibility by those who do not sign up for coverage to make the protections, subsidies and the rest of the law work. Quite simply, O’Connor said that Congress and the Supreme Court both said the individual mandate and “tax/penalty” are critical to the law’s operation and he as a judge doesn’t have the ability to change that.

On the other hand, there are other factors that could mean the ruling is overturned: O’Connor’s severability ruling is very broad and judges should always look for ways to save the legal parts of what Congress passed. He ignored Congress’ “new” view that the ACA was OK without the mandate. Last, courts reasonably take into consideration things like millions being impacted by a ruling and, in such cases, whether it is better to have other branches mitigate any constitutional or legal issue.

So both the Fifth Circuit and Supreme Court could still save the day for Obamacare. But the Exchanges certainly are at risk. At the very least, it would be interesting to see the gyrations and machinations that the high court might have to go through to find a way to rule that the Exchange portion can stay in place. Will it fall back on the fact that the mandate is technically still in law to allow the Exchanges to remain? Will it allow the Medicaid expansion and other protections stay even if the Exchanges fall?

In the end, what have we learned here?

  • Democrats were misguided for forcing the law through originally with little or no public debate. While coverage for all is important for our nation’s future, the existing law has unaffordable benefits and subsidies.
  • Whatever one thinks of Obamacare and universal access or coverage in general, tens of millions of Americans now rely on coverage in both Medicaid (more so) and the Exchanges (less so) due to the passage of the ACA. This seems to be lost on many Republican lawmakers. Are we really willing to tear away healthcare from these Americans?
  • Republicans were misguided the past few years for plugging Wild West healthcare concepts that don’t work and couldn’t gain enough support to pass both houses. They then eviscerated the individual mandate “tax/penalty” for political reasons. What has passed in law by the GOP, and been achieved through regulation by Trump, adds to the foundational instability of the Exchanges.
  • While the Medicaid piece of Obamacare is working, the Exchanges are not in about half the states. This won’t change whether the third branch affirms or strikes the O’Connor ruling. Many Democrats don’t seem to get that they need to be fixed.
  • And, again, whatever the 5th Circuit or Supreme Court decides, the best public policy is forged by consensus. It brings the two sides together for common good. Democrats and Republicans have come together on Clean Air, Clean Water, the Disabilities Act, Children’s Healthcare, and more. Why not healthcare more broadly?

For sure, the events of last week will further undermine the faulty infrastructure of the Exchanges in many states.  What is missed is the misery – yes, misery! – that many more people will now go through unless the administration and lawmakers act like adults and pass sensible legislation on a bipartisan basis that guarantees coverage and is sustainable.  That is what Democrats and Republicans should devote themselves to on healthcare in 2019.

For all the hollering, name-calling and insults the past few days, about the only one who got it at least partially right was O’Connor, who at one point criticized intervening Democratic Attorneys General by saying they want to “have their cake and eat it too.”  It seems to us that the criticism should be broadened to Democrats and Republicans alike in this long-running soap opera.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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