The Future of Obamacare

By Ross A. Frommer, vice president for Government and Community Affairs and associate dean at Columbia University Medical Center  

Republicans made huge gains in last week’s midterm elections, but a more immediate threat to the Affordable Care Act (ACA) may be coming from the courts. On Friday the U.S. Supreme Court announced that it had granted certiorari and would hear arguments in the case of King v. Burwell, one of several cases in which plaintiffs say the federal government lacks authority to provide insurance subsidies in certain states.

A key part of the ACA’s plan to provide coverage to the uninsured was the creation of health care exchanges, virtual marketplaces where people could purchase coverage. For those who could not afford the products offered on the exchange, the federal government would provide a subsidy to make the payments affordable. Each state was authorized to create its own exchange, but for those that chose not do so, the federal government would step in and manage the exchange. Only 16 states and the District of Columbia chose to create their own exchanges.

This past summer, in another case, Halbig v. Burwell, the U.S. Court of Appeals for the D.C. Circuit ruled that the subsidies could be used only in state-based exchanges. People living in states that had chosen not to create their own exchange were ineligible for government support to help them buy insurance on the federal exchange. According to the Court, that is what the language of the ACA statute clearly stated. Normally, such a problem with the legislative language could be cleared up with a technical corrections amendment, but the ACA is so controversial—and Congress so polarized—that it would be virtually impossible to get passed anything that could be seen as helping the ACA.

On the same day, a different appeals court, the Fourth Circuit in Virginia, issued a decision in the King case stating that the subsidies could be used on the federal exchange. This court argued that despite what may have been less than perfect drafting of the legislative language, resulting in ambiguous language of the ACA, Congress’s intent was clear. The entire D.C. Circuit had agreed to hear the Halbig case in December, but since the two circuits are in disagreement, the Supreme Court elected to step in and address this matter. A negative ruling on the subsidies would be a huge blow to the ACA, making policies offered on the exchange unaffordable to millions of Americans.

Repealing the ACA was a top priority for many, if not all, Republicans running in 2014, and their success this past Tuesday will no doubt be at the top of their legislative agenda when the 114th Congress convenes in January. Republicans picked up at least seven seats (most likely nine after the outcomes of other races are determined) and the majority in the Senate and increased their majority in the House of Representatives by at least 13 seats. The victory extended to the state level, where Republicans gained a net of three governorships and took control of six state legislative bodies.

Republicans have made repeal of the ACA a priority since its passage in 2010. Over the past four and a half years, House Republicans have proposed 50 measures to repeal or make major changes to the ACA; none of these was voted on in the Democratically controlled Senate. A repeal bill will doubtlessly pass the House, probably on a straight or close-to-straight party-line vote, but unlike in previous years, it will come up for a vote in the Senate. With the Republicans in control, Senate Majority Leader Mitch McConnell (KY) will set the agenda and have enough votes to pass it. He is unlikely, however, to be able to convince enough Democrats to vote for it to get the 60 votes needed to end a filibuster, so the repeal will probably end up dying in the Senate.

The real test will come—probably later in the year—on bills that make significant changes to, but do not outright repeal, the ACA, e.g., repealing the employer mandate, changing the definition of part-time employee, repealing the medical device tax, repealing the Independent Advisory Payment Board, granting state Medicaid programs greater flexibility, repealing the Cadillac tax, and developing a less expensive “copper” plan. Some Democrats—including President Obama—have expressed a willingness to revisit some of these items. Furthermore, since many of these measures would affect the federal budget, the Senate could consider them under a procedure referred to as reconciliation. Under budget reconciliation, debate is limited and measures can pass with a simple majority.

Of course, any measure that passes would need to be approved by President Obama, who will veto any bill that guts or makes fundamental changes to the ACA. A veto override is highly unlikely to pass in either the House or Senate.

The impact of the election on the ACA also will be felt in several state capitals. Republicans won the governor’s race in Arkansas, Illinois, Maryland, and Massachusetts, all of which had chosen to expand their Medicaid programs. Though enhanced Medicaid probably faces no real threat in the latter three states, in Arkansas, with a Democratic governor, the state legislature attempted last year to reverse the state’s decision. It could try again with a new Republican governor. However, one can expect to see a renewed expansion effort in Alaska and Pennsylvania, where incumbent Republican governors lost to candidates who favored Medicaid expansion. (As of this writing, the race has not officially been called in Alaska, but challenger Bill Walker holds a 1.4 percent lead.)

Four and a half years after passage of the ACA, debate about it continues at the White House, in Congress, in the judiciary, in the press, and, of course, in the court of public opinion.


2014 midterm elections, Affordable Care Act, Columbia, Columbia University, Columbia University Medical Center, government and community affairs, healthcare, obamacare