ACA Obstacles to Overcome

Obamacare, the Affordable Care Act, has been America’s hope and bane since it passed a few short years ago. It’s been rife with controversies, delays, complications, and legal maneuvers. Its original purpose was healthcare reform to lower and control the cost of healthcare for everyone and prevent insurance companies from denying coverage because of pre-existing conditions. It’s been opposed by many since before it was implemented, and although it prevailed in its most recent attack, there is more to come.

King v. Burwell

King versus Burwell was a lawsuit coordinated and funded by the Competitive Enterprise Institute, a nonprofit U.S. think tank that fights excessive government regulation. It challenged the legality of the Affordable Care Act, claiming that subsidies for those who bought health insurance on the federal exchanges were illegal. Its aim was to strike down the ACA, or at least the part of it that makes it mandatory for all Americans to obtain health insurance.

The case went to the U.S. Supreme Court, which ruled on it June 25th. The outcome of the Court ruling was watched closed because of the possibility of dismantling the ACA, which would drastically affect affordability of health insurance for millions of Americans and make the employer mandate unenforceable.

Those who closely watched the justices in the case said the court appeared to be leaning toward upholding the law, which turned out to be the case.  Ultimately, the Supreme Court upheld subsidies for Obamacare.  This is the second case that the Court has decided in favor of the Affordable Care Act.

United States House of Representatives v. Burwell 

Last November, House Speaker John Boehner (R-Ohio) launched a case that also questions the public assistance offered through the exchanges.  His lawsuit includes the following two issues:

  1. Is the administration illegally making payments directly to insurance companies in order to provide “cost-sharing reductions” to certain qualified low-income individuals; and
  2. Did the administration exceed its authority in delaying the enforcement of the employer mandate without the vote of Congress?

While the second issue has little impact on the future of the ACA due to its timing, the first issue is of more concern.  There are two types of assistance under section 1402 of the Affordable Care Act for qualified individuals.  The first is a refundable tax credit reported on the tax return, helping consumers pay for their insurance premiums.  This is the assistance that was recently upheld in King v. Burwell.

The other type of assistance is a cost-sharing reduction option, which provides the insured with lower deductibles, copays and coinsurance depending on their level of qualification.  Currently, 53% of the 6.2 million Americans receiving tax credits are also eligible for cost-sharing reductions.

While the cost-sharing itself is not under question, the party paying for it is.  This case argues that the government should not be paying these without “appropriation,” which is when Congress authorizes spending money for a particular purpose.  Appropriation is required for government spending, and that’s what gives this lawsuit a chance.  The lawsuit claims that, “The Executive Branch has no authority to expend public funds that have not been [properly] appropriated.”

If the House pulls off a verdict in their favor, it’s likely that insurers would end up footing the bill for the cost-sharing, which would cause premiums everywhere to spike.

The case is currently at the District Court level, which is still an early stage in the process.

                                      

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About the Author:

As Director of Operations, Jessica oversees the day-to-day operations for payroll, human resources, tax, finance and client affairs. She also plays an active role in formulating corporate strategy and developing client programs. Jessica believes a company’s success begins with its people. She strives to build a team encompassing excellence and professionalism, and to play a large role in developing the staff on an ongoing basis. Her passion for strong client relationships drives her in ensuring that clients receive the highest level of personal service and the best products in the industry. Jessica joined PAYDAY in 2004, and quickly advanced to Development Coordinator in 2006, when she took charge of Human Resources. She was promoted to Director of Operations in September, 2011.

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