All eyes are on the Affordable Care Act as the healthcare reform law's fate continues to spark debates and lawsuits.
The Supreme Court will issue a ruling sometime next month on King v. Burwell, a case it heard back in March regarding the legality of subsidized plans sold on the federal health insurance exchange. There have been many rumblings on what a ruling for or against the plaintiffs would mean, as well as a dozen or more ACA alternative plans from Republicans. While many of these plans include a temporary extension of subsidies, the impact would only delay further disruption in the marketplace because millions would end up dropping coverage, causing premiums to skyrocket, according to a report from the American Academy of Actuaries.
In addition to playing the King v. Burwell waiting game, the Obama administration has been under attack for possibly defying the Constitution in implementing the law and vastly expanding the "underinsured" population as millions of Americans gained health coverage.
FierceHealthPayer rounded up the top ACA stories from this week to discuss the legal issues, the controversies and the what-ifs.
ACA implementation lawsuit
Yesterday a U.S. District Court heard the House Republican lawsuit that challenged the Obama administration's executive changes to the ACA.
The lawsuit--initially filed last July, then pushed back until November--touched on two main points: Delaying the employer mandate and allegedly transferring money to insurers illegally, FierceHealthPayer previously reported.
What's unusual about the lawsuit, the National Journal reported, is that the House actually agreed with delaying the employer mandate by voting to put it off another year. What it doesn't agree with, however, is how the delay was executed.
The two sides made their cases in front of U.S. District Judge Rosemary M. Collyer. On one side of the argument, Justice Department attorney Joel S. McElvain urged Collyer to dismiss the case, saying, "The House cannot sue the executive branch over the implementation of the existing federal law," reported the Washington Post. On the other side of the argument, House attorneys argued that dismissing the lawsuit could possibly limit the legislative branch's ability to "combat future executive outreach," according to a second National Journal article.
After 90 minutes of back and forth, Colley said she did not know how the ruling would play out, noted the Post.
Underinsured rate
Another ACA controversy surfaced this week after reports found that cost is the main reason many Americans go without medical care. The ACA provides reduced cost sharing for certain individuals who fall below 250 percent of the federal poverty level--however, there is no assistance with cost sharing for individuals with higher incomes.
The issue at hand is how to help not the uninsured population but, rather, the underinsured population. The Commonwealth Fund defines the latter group as having out-of-pocket costs that add up to 10 percent or more of household income, in most cases, or deductible that amounts to 5 percent of income or higher, FierceHealthPayer previously reported.
A recent Families USA study found that nearly 30 percent of adults with deductibles of $1,500 or more per person went without needed care in 2014 because they couldn't afford it.
Many healthcare experts who favor the ACA believe high deductibles can, in turn, discourage unnecessary treatments, reported the Los Angeles Times. At the same time, those who say the ACA caused deductibles to rise don't acknowledge that the high-deductible trend began long before implementation of the healthcare reform law, the article said. Deductibles were equal to 3 percent of household income in 2003 but rose to 6 percent in 2010.
What's more, while the percentage of adults with deductibles higher than 5 percent of income rose through 2012, the number did drop from 30 percent of those with individual coverage in 2012 to 24 percent in 2014, the Times pointed out.
Potential silver lining
Over the past three months, industry officials have suggested different outcomes and possible ramifications--as well as bright spots--should subsidies disappear.
For instance, former Congressional Budget Office director Douglas Holtz-Eakin believes eliminating subsidies actually would have economic benefits, reported Employee Benefits News. His theory: Without subsidies, millions of Americans would not be subject to the individual mandate and, in turn, would receive a reprieve from a tax that will average $1,200 this year.
Employers would benefit as well, Holtz-Eakin told EBN. Without subsidies, the employer mandate would cease to exist, for the most part, which may encourage employers who were once worried about the penalty to increase employees' wages and hours. Reducing administrative burdens could increase wages as much as $940 per employee per year, he said.
For more:
- read the American Academy of Actuaries report (.pdf)
- read the first and second National Journal articles
- check out the Washington Post story
- read the Los Angeles Times story
- here's the Employee Benefits News piece