The SCOTUS Health Care Ruling: What Does It Mean?

In a highly anticipated decision, today the Supreme Court ruled that a key portion of the Affordable Care Act (“Obamacare”), which requires citizens to carry health insurance or else pay a penalty, is in fact constitutional. A 5-4 vote, in which the usually fairly conservative Chief Justice Roberts joined his more liberal colleagues in upholding the ACA, says that it’s legal for the government to mandate that citizens must get health insurance by 2014 or else pay a tax. The court essentially ruled that the penalty in question doesn’t function differently than other taxes on US citizens, and is therefore constitutional. As Roberts wrote in his decision, “because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” Justices Scalia, Thomas, Alito and Kennedy were dissenting, and said they would have struck down the entire law.

The court didn’t find the entire law constitutional, and struck down part of the law dealing with Medicaid. The court ruled that an expansion of Medicaid can’t be made mandatory for states because it threatened states’ funding, and that the federal government can’t put sanctions on states’ current Medicaid funding if they choose not to participate in the expansion. And while Roberts did surprise and disappoint conservative supporters by siding with the more liberal half of the court, he didn’t necessarily throw in his lot with them philosophically. He still agrees with the conservative viewpoint that the federal government can’t force people to carry health insurance, but his argument is that the government isn’t forcing anyone to do anything, and is instead just choosing to tax those who don’t.

Nancy pelosi and john boehner after the announcement. (AP Photo/Pablo Martinez Monsivais)

As is to be expected, Democrats are in general very pleased about this decision, and Republicans less so.  Mitt Romney declared that “What the court did not do I will do on my first day as president… ObamaCare was bad policy yesterday. It’s bad policy today.” How Mitt Romney will manage to reverse a Supreme Court decision on his first or any day as President is unclear, but the sentiment stands. The GOP is expected to “try to dismantle the law “piece by piece” in the words of Rep. Lynn Woolsey. But in the meantime, it could mean a huge difference in the lives of those with chronic illness.

The expansion of Medicaid means that some people who didn’t previously qualify may now benefit from it, and tax subsidies can provide a big help to those who are now uninsured, thereby making insurance much more affordable. The Congressional Budget Office estimates that 17 million more Americans will now be eligible for Medicaid by 2016, and an estimated 20 million will be able to afford their own through exchanges. Insurers are guaranteed to provide coverage to people with preexisting conditions. People who don’t have access to an employer-provided health plan can shop for insurance at state “exchanges.” If someone’s insurance premiums would equal 8% of their income or more even after subsidies and employer contributions, they are exempt from buying insurance but also exempt from the tax penalty for not buying it.

One question that remains is what will happen to insurance rates if it becomes a product that everyone is required to buy — ordinarily, supply and demand would dictate that prices would rise. A ballot initiative that would allow the state to regulate insurance prices (and thus keep them from becoming unaffordable) is being pushed for November, but is facing protests from insurance companies like Blue Cross Blue Shield. And even if insurance rates aren’t able to be regulated, there will still be Americans who can’t afford insurance — those who don’t meet the 8%-of-income mark but also don’t qualify even for extended Medicaid coverage.  But there will also be Americans who may be able to access care that they would never have been able to afford, and diagnoses that may have previously been death sentences because their victims weren’t in the top income bracket of the United States may now be treatable. There’s no way to know whether the Affordable Care Act will remain in its current state, especially if we find ourselves with a Republican president in November. But it will certainly be added to the list of accomplishments of the Obama administration during his first term, and for many it will be remembered as a major step forward.

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Rachel is Autostraddle's Managing Editor and the editor who presides over books and news & politics coverage. Originally from Boston, MA, Rachel now lives in the Midwest. Topics dear to her heart include bisexuality, The X-Files and tacos. Her favorite Ciara video is probably "Ride," but if you're only going to watch one, she recommends "Like A Boy."

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30 Comments

  1. Thumb up 2

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    things the NHS does well: emergency care (brought home to me by my father’s life threatening stomach bleed. When I added up the cost of his care I realised it would have bankrupted us). Screening, childhood primary care

    Things the NHS does reasonably: chronic disease management

    What the NHS does not do well: lifestyle illnesses of the young, e.g. sports medicine. Or access to psychological therapies. In practice this means that those who work and so fund the NHS through taxes tend to benefit from it the least. However their children and their parents benefit massively.

    I wonder how obamacare will work out, and am saddened to see that whilst America is pushing towards universal healthcare, our tory government wants to break the NHS into smaller pieces and sell it to their mates.

    Bad day at the office

  2. Thumb up 1

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    I’m slightly confused about one part. If insurance would be more than 8% of someones income they are exempt from buying it? does this mean they will just remain uninsured? wouldn’t this mean that the people who can afford health care the least will not have it

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      I think the idea is that people for whom health insurance would cost more than 8% of their income will have incomes low enough to qualify for Medicaid or other government-subsidized healthcare. People who cannot get insurance through their employer will be able to purchase a plan through what they’re calling “exchanges” which will keep the costs affordable. Or at least I feel like this is what the plan is.

      This little flowchart thingy is cool, and if you go to the url listed at the bottom there’s a calculator to see what your estimated payments and tax credits would be if you purchase insurance through an exchange.

      http://healthreform.kff.org/the-basics/Requirement-to-buy-coverage-flowchart.aspx

  3. Thumb up 1

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    I mostly hate this bill because it doesn’t go far enough. And I really hate the extremely dangerous precedent it creates. It’s now law that the government can force people to buy sub par services from corrupt corporations.

    We had a chance to get a health reform bill that actually reformed health care. Obama had a mandate, but he never fought for single payer because the insurance company’s didn’t want it. He took it off the table from day one.

    I don’t think this is a good first step that we can build upon. This was a horribly missed opportunity and the bill won’t get stronger it will be eroded into nothingness. Hell, the process has already begun.

    I’m also not surprised, or grateful, that John Roberts voted for it. His entire career he’s been a corporatist and there was no way that he would side with Tea party crazies over big business.

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      No, SCOTUS actually said today that Congress cannot force people to buy things. That was the crux of the argument. It’s not something you’re required to buy; it’s a tax if you don’t buy it. It might sound like the same thing, but it isn’t. Taxes are levied to serve the public good.

      You say that this doesn’t reform health care. What about all the people under 26 that can be covered on their parents’ insurance? What about coverage for ALL children under 18? What about the provisions that insurance companies can no longer kick people out for getting sick, or refuse to accept people with preexisting conditions? What about the requirement that insurance companies can’t charge women extra, just for being women? This is way more regulation on insurance companies than we’ve ever had before. That’s a good thing.

      Single payer might have been better, but so would chocolate rivers and flying unicorns, which are about as achievable. Maybe more so.

      If this doesn’t affect you, consider yourself lucky. I know plenty of people who have had trouble finding affordable, effective insurance, and this will drastically improve their lives.

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        It affects me greatly. I can’t afford insurance currently . I’ve been broke numerous times in my life. Growing up, my family used food stamps and medicare and was even homeless for a time. That doesn’t change my opinion of the bill at all.

        This bill has benefits. I never said it didn’t. But the good parts that are there are far less than there should have been and are mostly there to help obfuscate things. It’s band aids on a massively sick system. Most of the things you listed sound great, but there are far too many loopholes built in to say for sure that the bill will end up working that well. You’d better believe that the insurance company’s will start exploiting them too, because insurance industry professionals made up a big selection of the people invited to the table during the writing of the bill.

        And even without resorting to loopholes or trickery, as I said before, the few good parts are already being, and will continue to be neutered.

        You can call it a Tax, fine or toll for all I care, it ends up the same. Buy a defective, overpriced product from a huge corporation or be punished.

        A comment I read recently that says it well.

        “Health insurance is another Wall Street racket tossed on the American public so that some people can profit off the sickness and death of another person.

        “Draw them in with prospect of gain, take them by confusion.” Sun Tzu, The Art of War

        The health care fight morphed from universal to pubilic option to individual mandate where now the supposed “liberals” are defending a mandate to buy a defective product that creates profit through human suffering. The fascists are winning. Even if the mandate was struck down by itself, the majority of this industry friendly act will remain intact or the industry would have reverted back to what is was doing prior to the act.

        The questions that should be before the court is whether health care is a human right or not and should an industry profit off the misfortunes of others? The ruling today just further entrenches a system built around human greed and extracts profits from dying bodies.”

        • Thumb up 1

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          Oh, and this comment you made,
          “Single payer might have been better, but so would chocolate rivers and flying unicorns, which are about as achievable. Maybe more so.”

          is ridiculous.

          There was plenty of support for single payer. But we now know that Obama was lying when he said he wanted it but he just couldn’t get it past those mean Republicans. He took it off the table from day one.

          • Thumb up 3

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            Single payer was not feasible in the political climate of 2009. It wouldn’t be feasible now, either – just look at the reactions to today’s decision.

            Obama is not a congressman; he cannot pass legislation. Calling him a liar doesn’t change that. The ACA was written and negotiated by bipartisan congressional committees. It would never have passed if it included a single-payer system.

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            I called him a liar because leaked documents show that even while he continued for months to claim that he was fighting for it as hard as he possibly could, in truth it was NEVER on the agenda.

            “It would never have passed if it included a single-payer system.”
            It may or it may not have passed, but we’ll never know now.

        • Thumb up 2

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          Insurance companies have been profiting off of sick and dying people for decades, with very little regulation.

          Now there is a law that regulates them. This is a good thing.

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            I wouldn’t be so down on it. Don’t make the perfect the enemy of the good, as they like to say.

            When you get into the nitty gritty, this bill will make a huge difference for a gigantic number of people in this country. I’ve gone without health insurance due to income problems, while attempting to manage two conditions that require monthly prescriptions. It’s not fun. Thanks to this, I’m never going to have to do that again.

            Someone above already mentioned many of the provisions that are great about this bill, but that doesn’t even mention the federal subsidies available to get insurance, the annual caps on out-of-pocket costs, and so on and so forth. (See my comment below for a concrete example). It’s really a good deal.

            I’m also not sure what parts of the act you suggest are being neutered. To my knowledge, nothing of the sort has happened. Should Romney get elected president and the GOP take majorities in congress, that’s another story, but that is an outcome that has not happened yet and is far from guaranteed.

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        I just read this response and wanted to give the writer a high five because it was spot on. Then I realized the person who wrote it is my girlfriend.

          • Thumb up 4

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            I was more worried that you did have a girlfriend, and that she’d see it and be like “wait, WHAT!” I’m glad that we can have these kind of debates without getting mean, unlike other websites.

  4. Thumb up 1

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    Honestly I find this all so confusing that I can’t decide whether or not I’m for it.

    I used that Kaiser calculator to see how much this is going to cost me. I don’t qualify for Medicaid and if I’m reading this whole thing right, then insurance would be 8.36% of my income – so I would not be taxed if I don’t buy it, right? So this leaves me in the position I’m currently in. But there’s a government credit isn’t there? So I will probably end up being forced to buy insurance? I feel as if I’m being punished for being poor. My income is like $1500 a month and my student loans come due in November. How am I going to afford my rent, utilities, food, bus pass, insurance, and loan payments? Again, I’m just really confused. I should probably find a tree house to live in to save money.

    I also feel like insurance companies will just offer a lower quality plan so that poor-but-not-poor-enough people like me will be forced to purchase and still be fucked if I get sick – is this an unfounded fear?

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      Are you using the subsidy calculator (http://healthreform.kff.org/SubsidyCalculator.aspx) and not just the flowchart?

      Assuming that, in 2014 (which is when all this takes effect) you made more than 133% of the federal poverty guideline (which comes out to about 15,500/yr) you would be able to buy health insurance on a state health insurance exchange, using, in part, a subsidy from the federal government provided as an advanced refundable tax credit (advanced in the sense that you receive it prior to the filing of your taxes, refundable in the sense that even if you have $0 tax liability, which you would have at that income level, you still get the money).

      Using the calculator above, which is probably mostly accurate, a 27 year old adult who made $18,000/yr ($1500/mo) would hit at an unsubsidized health premium of $3,391. That can be considered the “sticker price” of possible health insurance you’d have to buy. Then, a federal subsidy kicks in. The calculator states that the advanceable refundable tax credit in this situation would amount to $2,617 (aka FREE MONEY), leaving the hypothetical person with an annual premium of $773, or $64.16 / mo.

      Even on an extremely limited income, that would likely be doable. Note, also, that this particular calculator is basing its numbers off of the formula for “silver” level coverage and not “bronze” level coverage, which would be cheaper (and also provide fewer benefits) on a monthly basis. There is also mention in the bill of catastrophic coverage which is available for healthy, young adults, which is even cheaper than bronze coverage.

      Other useful things to know. Under the calculator’s example, annual out-of-pocket costs (not including the premium) are capped at $2,000 (this includes co-payments, deductibles, etc.). Also, thanks to the provisions of the act, preventative services like checkups and mammograms are now freeeeeeeeee (no co-pay, no deductible, no nothing). So it’s quite possible in any given year you would never reach the $2,000 annual limit, ’cause you wouldn’t need health care. Then again, if something *really bad* happened to you, you’d still only be forced to pay a max of $2,000 annually. That’s great news when you consider that the cost of a hospital stay (even for a few days) can run into the thousands of dollars (before insurance).

      Overall, it’ll be a vastly better situation than what we’ve got now, even if you fall into the unfortunate area of making too much for medicaid and too little for health insurance (as currently available).

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    Technically if Romney was elected President, he would have to gain control of the senate, and keep a majority in the house, to even begin to repeal this act. Even then it could be filabustered. Interestingly enough could this be a political tactic? If Obama is not re-elected due to this, was this just a shrewd political move by Roberts? First claim corporations can go mid evil on elections, imposing their will, and getting rubber stamps elected. And then energize the crazy base by upholding the healthcare act?

  6. Thumb up 0

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    I support the passing of the bill. I think it will helps more people than it hurts, although time will tell for sure. It doesn’t seem that much different than states forcing people to have car insurance or being forced to have home/renter insurance.

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