Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
July 25--How many Americans are anti-Obamacare hard-liners willing to harm in their war against the landmark health reform law? The answer -- millions -- became shamefully clear after a conflicting set of federal appellate rulings this week cast an unnecessary cloud over the Affordable Care Act's future.
About 4.6 million people who obtained private health insurance this year through Healthcare.gov, the federal insurance marketplace serving 36 states, received tax-credit subsidies to lower the cost of their monthly premiums. That number is expected to rise to 7.3 million over the next two years, according to a recent analysis by the Robert Wood Johnson Foundation and the Urban Institute.
But the latest court challenge concocted by Obamacare opponents takes aim at the legality of the subsidies for those living in states relying on Healthcare.gov instead of a customized, state-built exchange -- such as Minnesota's MNsure. If the dubious argument that Congress only intended subsidies to be distributed through state exchanges eventually finds favor with the U.S. Supreme Court -- Tuesday's contradictory rulings set the stage for this review -- millions of Americans now able to get care without fear of financial catastrophe could once again find themselves without coverage.
Many of those now qualifying for subsidies through the federal exchange would take a double hit, a fact often missed in news coverage. They're also currently eligible for so-called "cost-sharing" assistance to defray expenses such as copays. That assistance likely would "terminate," according to a legal briefing distributed this week to state health policy experts.
Those tempted to cheer on the latest legal challenge to the ACA ought to consider these numbers: Each of the nearly 5 million who received the subsidies this year -- those who qualify must meet income guidelines -- is someone who potentially would not be able to fill a prescription or take their child to the doctor if the tax credits simply disappear.
Now add in the estimated 8 million even poorer Americans who would have qualified for Medicaid but remain uninsured because they live in mostly southern states not expanding this program in order to strike a blow against Obamacare. The tally of Americans whose medical care is in jeopardy for purely political reasons is already an outrage. The latest legal challenge could send that number soaring.
At what point does the incredible cost of this political gamesmanship start sinking in with the law's mostly Republican opponents? Thinking that this confers some political advantage is also deluded. "There will be utter chaos throughout the country as people getting insurance subsidies have them yanked away. Think of the controversy when people weren't able to renew their policies last year. Multiply it by 20 to 30 times to get at what this would entail," said Henry Aaron, a Brookings Institution health policy expert.
What's even more frustrating is that there aren't broader legal principles at stake, as there were with a previous court challenge to the health law's mandate to buy health insurance. In 2012, the U.S. Supreme Court upheld the mandate by treating it as a tax but gave states unexpected latitude to decline to expand Medicaid, one of the key ways the ACA expands access to coverage. The tax credits used to buy private insurance provide another critical way to accomplish this.
The latest challenge is referred to as Halbig vs. Burwell, the court case on which the U.S. Court of Appeals for the District of Columbia Circuit issued its ruling Tuesday. There are similar cases elsewhere. While a three-judge panel for the D.C. Circuit struck down the federal exchange subsidies in a 2-1 ruling, a Fourth Circuit panel ruled on a similar case and unanimously upheld the subsidies.
At the heart of the issue is what amounts to sloppy copy editing deep within the 2,000-page health reform law. As an amicus curiae brief by the Families USA advocacy group points out, six words isolated in a subsection of a subsection dealing with how the subsidies are calculated are being used to justify denial of subsidies to Healthcare.gov users.
This conclusion flouts a respected legal precedent that gives federal agencies wide latitude in interpreting ambiguous legislative language. It also flies in the face of common sense. Congress didn't intend to give assistance only to some states, especially when doing so would unravel the law's other key provisions, such as the mandate and the protections for pre-existing conditions. All of the law's components must work in tandem to ensure that insurance markets work. The idea that the legislation's authors would leave such a lethal loophole is ludicrous.
Instead of allowing this legal battle to distract from other pressing issues, Congress needs to pass a fix. Republicans reluctant to do so should seize this as an opportunity. The country wants health care problems solved, not prolonged.
Minnesotans also ought to be grateful for state legislators' foresight in building MNsure. The reasons for doing so remain -- the opportunity for local control and the chance to build new human services efficiencies. Add to that another advantage: MNsure will insulate Minnesotans from the ongoing legal battle and ensure that the subsidies keep flowing to those here who qualify.
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