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The Possible Long and Short Term Consequences of The Recent Obamacare Ruling

Lewis Mark Published: December 20, 2018 Updated: December 20, 2018

Affordable Care Act papers with gavel

In 2012 the constitutionally of the Affordable Care Act (ACA) colloquially called “Obamacare” was upheld by the U.S. Supreme Court. On December 14, 2018, the Affordable Care Act was ruled unconstitutional in a Texas Federal Court. What are the long and short-term ramifications of this ruling and what happens next? How will it affect the people insured under the ACA?

Shared Responsibility Payment

The shared responsibility payment aka individual mandate provision of the Obama healthcare program is a penalty for not enrolling in an ACA approved healthcare plan. Opponents of the ACA have always argued that the shared responsibility payment violates the Interstate Commerce Clause of the constitution because the government is forcing citizens to buy a product.

The Supreme Court ruled that the individual mandate penalty is a tax. Therefore the ACA was legal because the government has the right to levy taxes. The recent circuit court decision was based on the virtual elimination of the individual mandate fine by congressional Republicans. The circuit court judge determined that the elimination of the penalty renders all provisions of Obama’s healthcare legislation unconstitutional.

The Appeals Process

The Federal Judge Reed O’Connor who handed down the ruling against the ACA immediately stated his decision. A stay prevents any further legal action from being taken. Judge O’Connor likely issued the stay in anticipation of his ruling being appealed.

Fifteen states have petitioned the federal courts to keep Obamacare in place until the appeals process is complete. A coalition of state attorneys general will be filing for an appeal of Judge O’Connor’s decision. If accepted the appeal will be heard in Louisiana’s 5th Circuit US Court of Appeals.

Should the 5th circuit court uphold O’Connor’s ruling the case can be taken to the Supreme Court. Depending on how the various proceedings progress ACA subscribers could spend the next two years in limbo.

The Ruling’s Short-Term Consequences

As quoted on Kaiser Health News chief Washington correspondent Julie Rovner declared, “Nothing changes for now”. Rovner encouraged people not to abandon plans to enroll in the Affordable Care Act.

To date, the ACA has survived 70 attempts at repeal. Should this latest attempt succeed Rovner warns of, “…an enormous disruption.”

Effects on the Healthcare System

How would an actual repeal of Obamacare impact the healthcare industry? Refer to how the mere threat of repealing the ACA affected the healthcare industry in 2016. The prospect of 20 million Americans suddenly being unable to afford medical treatment caused a panic among healthcare providers.

An article reports that any repeal of or alterations to the ACA would financially devastate rural hospitals. One concern was people being unable to seek treatment before an illness reaches the point that hospitalization is required.

From 2010-2015 Obama’s healthcare legislation had proven to be financially beneficial to medical providers’ bottom lines. In 2016 healthcare companies saw the value of their stock drop 13-29% because of President Trump’s threats to abolish or radically alter the ACA.

Effects on Medicare

Obamacare expanded Medicare so that an additional 10 million people could be insured under the program. According to AARP the ACA actually strengthened Medicare by putting more assurances of treatment in place. The Affordable Care Act altered the way Medicare is financed. Julie Rovner opined that if appeals to save the ACA fail the government won’t be able to subsidize Medicare.

Potential Long-Term Consequences

In fairness, it is hard to predicate the exact consequences of an Obamacare repeal. In part because no one is certain what opponents of the ACA plan as a replacement. The other unknown is what if any parts of the Obama healthcare plan will be part of a replacement plan. For example, up until the idea cost Republicans the house during the recent mid-terms President Trump had sworn to eliminate mandatory coverage for preexisting conditions.

What is known is that 29.8 million people will be without health insurance including 1.2 million adults under 26 who are on their parent’s health insurance. In healthcare and related industries, 1.2 million people will be put out of work.

More Potential Long Term Consequences

Under the ACA treatment for miners with black lung disease is provided. President Trump wants to eliminate that provision. Under the ACA companies that employ 50 plus must provide nursing mothers with a lactation room. If Republicans draft a replacement healthcare bill it appears for the time being that the lactation room provision will be kept.

Under the Obama healthcare Native Americans have greater access to preventative and wellness services. The future of that provision remains to be seen.