In wake of the Supreme Court’s 6-3 decision to uphold a key component of the Affordable Care Act on June 25th, several University experts have shared their generally positive thoughts on the ruling.
The court’s ruling confirms that qualified Americans will receive health insurance tax subsidies when they buy their insurance from a federal exchange marketplace.
The question before the court was whether individuals could purchase health insurance on the federal exchange marketplace and receive taxpayer subsidies, as the act states that subsidies would be available only to those who purchase insurance on exchange marketplaces “established by the state.”
The court agreed the only way the ACA would work is for federal exchange marketplaces to be established for states without their own marketplaces to buy the insurance. Furthermore, the court ruled that individuals who buy their insurance via federal exchanges should receive tax subsidies.
Chief Justice John G. Roberts Jr. wrote in the majority opinion that Congress’ intention was to improve health insurance.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible we must interpret the Act in a way that is consistent with the former, and avoids the latter,” Roberts wrote.
In his dissent, Justice Scalia voiced his concern that the Supreme Court is rewriting laws and preferentially upholding certain laws.
“This Court, however, concludes that this limitation would prevent the rest of the Act from working as well as hoped,” Justice Scalia wrote. “So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare.”
Assistant Law Prof. Nicholas Bagley responded to Scalia’s dissent in the Los Angeles Times. He wrote that the court ruling did not rewrite the law, but rather read the law as a whole.
“It’s just that reading the law as a whole — keeping in mind what it aims to accomplish and how it goes about accomplishing it — is the right way to figure out what those words mean, not blinkered literalism,” Bagley said. “As the chief justice rightly appreciated, the broader statutory context thus confirmed that Congress could not have meant what, taken out of context, it seems to have said. That’s not rewriting the law. That’s reading it.”
A. Mark Fendrick, University professor in the department of Internal Medicine and the department of Health Management and Policy, said the court ruling allows people who are taking advantage of the healthcare system under the ACA to still receive tax subsidies, but did not necessarily make the health insurance system better.
“The court ruling kept things the same,” Fendrick said. “It’s not like people got anything better by the court ruling. What we did in my opinion is that we avoided a near disaster.”
Fendrick added the ACA has room for improvement, particularly in ensuring patients get high-quality services for what they are paying for their health insurance.
“We still need to appreciate that there are over 10 million people who are uninsured,” Fendrick said. “One of the principal reasons that people remain uninsured is they find that the health plans that are available to them are not deemed to be worthwhile expenditure, and in fact they think they are better off just paying the penalty.”
Fendrick directs the University’s Center for Value-Based Insurance Design, which is dedicated to removing financial barriers to essential, high-quality clinical services. The insurance design is based on “clinical nuance,” which acknowledges some medical services are more important than others.
“Instead of the consumers paying the same out-of-pocket for every diagnostic test, every drug and every doctor visit, we would like to see health plans that actually have low or no out-of-pocket costs,” Fendrick said. “As a doctor, I would like a health plan to send out-of-pocket expenses to patients based on how much healthier the service would make them, as opposed to how much it costs.”
Several state representatives also voiced support for the ACA ruling.
Congresswoman Debbie Dingell (Mich.–12) applauded the court ruling in a statement on the day of decision.
“The rejection of King v. Burwell by a vote of 6-3 sends a loud, strong message across this nation,” Dingell said. “Healthcare is a right, not a privilege. Bottom line: today’s decision is a victory for working families across this country.”
Sen. Gary Peters (D—Mich.) also applauded the ruling in his statement.
“The intent of the Affordable Care Act has always been crystal clear: all Americans should have access to affordable health insurance, regardless of what state they live in,” Peters said. “Eliminating these tax credits would have created a catastrophe for the nation’s health care system, taking away affordable health insurance from millions of families and leading to skyrocketing premiums.”
Michigan is one of the states that did not establish a state-based exchange marketplace for insurance and relies on the federal marketplace. Under the Court’s ruling Thursday, Michigan residents would be able to receive tax credits from the federal government.
In 2014, 184,297 Michiganders were using the federal exchange marketplace and received $13.2 million in rebates. As of March 2015, 293,843 Michigan residents were covered through the federal exchange.
Rick Pollack, president and CEO of the American Hospital Association, told U.S. News and World Report although the court ruling cleared a hurdle for the ACA, hospitals across the nation still face other issues, especially persuading state legislatures to expand their Medicaid programs to low-income adults — people under 65 and 138 percent below the federal poverty level.
Under the ACA, hospitals face payment cuts that will add up to approximately $36 billion over a decade, money that was supposed to be offset by states’ Medicaid expansion. Currently, 21 states do not have the Medicaid expansion, and hospitals in these states will be hit the hardest by the payment cuts.
As support for the Medicaid expansion, a new study from the University’s Institute for Healthcare Policy and Innovation looked at how well the expansion of Medicaid is working to reduce the burden of uncompensated care on hospitals in Connecticut. Connecticut was the first state to add low-income adults to the Medicaid program in April 2010.
Sayeh Nikpay, a visiting scholar at University of California, Berkeley’s School of Public Health and an alumna of the University’s School of Public Health, was one of the authors who conducted the study.
“This paper shows that when you provide coverage to people who don’t have it, hospitals have to absorb less of the cost of uncompensated care — both charitable care and from unpaid bills,” Nikpay said. “I hope our results will reinvigorate the discussion in state legislatures about expansion.”
The team plans to study Michigan’s Medicaid expansion next. The state of Michigan has a larger Medicaid population than Connecticut.
Rackham student Peter Haviland-Eduah, who was in Washington D.C. for a summer internship when the Supreme Court decision on Obamacare was announced, wrote in an e-mail to the Daily that the discussion surrounding the ACA is especially important for students entering the workforce.
“As (students) enter into an economy that is still recovering, getting a job is not a guarantee and getting a job that has benefits like health insurance is most certainly not promised,” Haviland-Eduah said. “Coupled with the fact that student loan debt has never been higher, it’s important that we are not putting ourselves at further financial risk just to have access to health care.”