Chief Justice John Roberts

Chief Justice John Roberts and the Affordable Care Act

Chief Justice John Roberts’ decision salvaged the Affordable Care Act.  Ironically, many of those who are euphoric about his decision have neglected to read his comments which are so highly critical of the Act.  A few excerpts from his opinion follow.  Comments in parentheses are mine as is the decision to bold certain sentences.

Justice Roberts:

We do not consider whether the Act embodies sound policies.”

The guaranteed-issue and community –rating reforms (everyone can get coverage and sick people aren’t charged more) do not, however, address the issue of healthy individuals who choose not to purchase insurance to cover potential health care needs.  In fact, the reforms sharply exacerbate that problem by providing an incentive for individuals to delay purchasing health insurance until they become sick, relying on the promise of guaranteed and affordable coverage.”

The reforms also threaten to impose massive new costs on insurers, who are required to accept unhealthy individuals but prohibited from charging them rates necessary to pay for their coverage.  This will lead insurers to significantly increase premiums on everyone.”

. . . many Americans do not eat a balanced diet.  That group makes up a larger percentage of the total population than those without health insurance.  The failure of that group to have a healthy diet increases healthcare costs to a greater extent than the failure of the uninsured to purchase insurance.”

. . .  for most Americans the amount due (penalty or tax) will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance.”

The Federal Government does not have the power to order people to buy health insurance.”

The Federal Government does have the power to impose a tax on those without health insurance.”

End John Roberts excerpts.

Where Are We?

Healthcare in the United States today is in a very chaotic era.  Articles appear every day about healthcare written with great authority but remarkable misinformation.   Let’s take, for example, the issue of pre-existing conditions.  A pre-existing condition is a medical issue that can often result in an insurance company in theindividualinsurance marketplace denying an application for coverage or not covering claims associated with that condition for some period of time.  For most Americans, pre-existing condition exclusions are not imposed as long as continuous coverage is maintained.  When one is covered through an employer and there is no gap in coverage of 63 days or longer, coverage through a new employer or Plan cannot impose pre-existing condition exclusions.  The problem in the U.S. is, of course, tying coverage to maintaining a good job with benefits or one’s relationship to the job-holder.    One can lose that employer based coverage.

Every state has a program for extending guaranteed coverage without respect to pre-existing conditions to those exhausting COBRA (a temporary extension of group coverage).

Again, you must act within the 63 day rule.  This has been true since 1996.  Also, Medicare, Medicaid and Child Health Plus programs do not recognize pre-existing conditions.

This is not to say that pre-existing condition issues have not been a terrible problem for those in the individual insurance marketplace who couldn’t qualify for insurance.  Even those who have individual health insurance are at risk because insurance is rarely portable from state to state.  It will be a great blessing for portability to become irrelevant.

Pre-Existing Condition High Risk Pool Programs

The Affordable Care Act created Pre-existing Condition High Risk Pool Programs in 2010 in each of the 50 states available to anyone with pre-existing conditions.  You have to be without coverage for six months to be eligible.  This coverage is subsidized by the federal government.  The Chief Actuary for Medicare and Medicaid estimated that 375,000 people might enroll the first year.   The Congressional Budget Office estimated 200,000 per year might enroll.  As of April 2012, there are 67,482 individuals nationwide enrolled (National Conference of State Legislators), link below:

This High Risk Pool Program ends in 2014 when guaranteed issue coverage is available through the state exchanges.

Over 50 Million Uninsured Americans

Why are there so many routes to guaranteed coverage that millions of uninsured Americans have not taken advantage of?

In my view, cost is the major factor.  Healthcare coverage is shockingly expensive unless it’s subsidized in some fashion through an employer or the government.  Many people who are eligible to elect COBRA choose not to because they gamble, often poorly, on having a new job and new coverage through that job before long.

The other major factor?  Complexity.  Our system is so complex, fragmented and confusing it can lead to indecision.

The Uninsured and Medicaid

The Supreme Court upheld the individual mandate, i.e., you have creditable coverage or you pay a penalty (the Act’s terminology), tax (Roberts’ terminology), or toll (Ginsberg’s terminology).   But the Supreme Court gutted much of the Act with seven justices agreeing that the states couldn’t be forced to expand their Medicaid programs, a key component of the Act’s very purpose, or be at risk for losing existing Medicaid funding.   This Medicaid expansion is the heart of the law and was the mechanism meant to achieve covering millions of additional Americans.

State Insurance Exchanges

As of 2014 if the ACA remains in place, it is true that all Americans will theoretically have guaranteed access to health insurance through a state exchange.  If you would like to see what an exchange looks like go to the Massachusetts site:  Regardless of the rhetoric, the Act’s goal of extending coverage to roughly 30 million of the over 50 million uninsured Americans appears much more complicated than Congress ever imagined when it passed the Act.

Healthcare is an extremely divisive political issue.  That is unfortunate.  All Americans need to work harder to make our system more affordable, sane and fair.  More to follow.