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Friday, June 26, 2015

Takeaways from the King v Burwell Decision

Ron Pollack

Executive Director

When the Supreme Court sided with the government in King v. Burwell yesterday, it was a victory for the Affordable Care Act (ACA)—and, more importantly, for the millions of people who currently benefit from the law and the millions more who will now be able to benefit in years to come. But a close look at the ruling reveals that the dimensions of the King v. Burwell victory may be bigger than we had hoped for.

Harbinger of a gradual reduction in the intensity of the opposition to the Affordable Care Act

I was overjoyed when Chief Justice Roberts began reading his synopsis of the majority opinion. This 6-3 decision upholding premium tax credits (subsidies) throughout the nation makes me optimistic that we may soon turn a corner on the entrenched political opposition to the ACA.

Twice now, the Supreme Court has handed down a decision that protected the ACA from destruction. Additionally, more than 50 congressional votes to repeal the ACA have failed. Increasingly, legal and political challenges to the ACA are losing credibility, and these contentious fights will lose steam as we move forward. 

The Supreme Court issued a broader opinion than expected

Based on the oral argument in March, it appeared possible that a narrow ruling might temporarily protect premium tax credits but would allow the next president to unilaterally withhold them. 

The court’s ruling interprets the ACA in a way that makes it impossible for future presidents to withdraw premium tax credits from federally facilitated marketplaces. Now, those tax credits must stay in place unless a new law is passed amending the ACA.  

The Chief Justice thoughtfully described the health care landscape before the ACA was enacted, citing how states that sought to protect people with pre-existing conditions experienced huge premium increases because insurance pools were disproportionately filled with older, sicker people. He described how the ACA built on a different model, established a few years earlier in Massachusetts, that was based on three key elements: no insurance discrimination against less healthy people; requiring the purchase of coverage for those who can afford it; and tax credits to help ensure affordability.

In so doing, he showed how this tax credit is critical to making health insurance affordable, thereby laying the basis for the ruling that tax credits should be available in all states.  

As MSNBC legal correspondent Ari Melber wrote: “Roberts’ opinion doesn’t simply find today’s subsidies legal. It holds that they are an integral, essentially permanent part of Obamacare.”

The majority fully appreciated the damage of a ruling for the plaintiffs

In the past several months, research and health policy organizations have done a tremendous job of documenting the damage that a Supreme Court ruling eliminating tax credits would have caused. These analyses were not lost on the justices who joined the majority opinion.

Citing the fine work of the Urban Institute and the Rand Corporation, as well as information from insurers, the decision made reference to the premium “death spiral” that would occur as a result of an adverse decision.

“The combination of no tax credits and an ineffective coverage requirement could well push a State's individual insurance market into a death spiral. One study predicts that premiums would increase by 47 percent and enrollment would decrease by 70 percent."

Now what for health reform?

With this legal challenge behind us, we need to roll up our sleeves and finish the work of ensuring that Americans get the health coverage and care they need and deserve.  This means expanding Medicaid to the remaining 21 states, toppling barriers to health care affordability and quality, ending health care disparities, and enrolling the remaining uninsured in health coverage. 

More on all that next week. This weekend, let’s all take a minute to savor this very momentous victory. I’ll close with a quote from my friend and long-time Supreme Court reporter, Linda Greenhouse:

“This whole exercise was unnecessary, the outcome too close for comfort. But there is cause for celebration in a disaster narrowly averted — for the country and the court, which is to say, for us all.”
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