As public sours, Obamacare faces an uncertain future

In a few weeks, ObamaCare’s second open enrollment season will close. Unfortunately for the president, the law may not live to see a third open enrollment — thanks to an increasingly hostile public and a case before the Supreme Court that could render a major part of the law unconstitutional.

According to Gallup, public approval of ObamaCare dropped to a record low of 37% at the end of 2014. The latest RealClearPolitics average of polls shows that 51% of Americans oppose the law.

That shouldn’t be a surprise. For a full year, individuals have had to deal with canceled plans, premium shocks, higher deductibles and narrow networks of health care providers — all thanks to ObamaCare.

Forty-six percent of Americans now describe health costs as a “hardship,” up from 36% in 2013.

Those who purchased coverage through ObamaCare’s exchanges will get a lot more ornery come tax time this spring. They’ll have to fill out a new and extraordinarily complicated form — the instruction booklet runs 21 pages — that directs them to do things like “add allocated amounts across all allocated policies with amounts for non-allocated policies from Forms 1095-A, if any, to compute a combined total for each month.”

After enduring this nightmare, about 3.4 million people — roughly half of those who received government subsidies to purchase insurance in the exchanges last year — will have to pay back part of those subsidies because they misreported their incomes, according to tax preparer H&R Block.

Business owners have grown disgruntled, too. Forty-two percent of small businesses report that they’ve experienced double-digit increases in the cost of health care in the past year. As a result, 37% have delayed investment; 26% have frozen or cut wages.

Americans may get relief from the U.S. Supreme Court, which will consider King v. Burwell on March 4. The case could effectively destroy the federally operated exchanges active in more than two-thirds of the states.

The plaintiffs in King argue that ObamaCare forbids the federal government from providing subsidies through the federal exchange.

The law’s text clearly states that financial assistance from the government can only come through exchanges “established by the State.”

If the court sides with the plaintiffs, about 4 million people would lose subsidies. Their premiums would suddenly become unaffordable. They’d likely choose to remain uninsured and pay the individual mandate penalty. That could destabilize the insurance marketplace.

Individuals with chronic conditions would likely be the only ones to comply with the individual mandate. Insurers may respond to the loss of millions in subsidized premiums and a sicker population by raising rates for everyone else.

As the exchanges crumbled, the White House would be powerless to intervene. States that had previously used would have to set up exchanges themselves. But that’s highly unlikely.

Republicans control 31 governors’ mansions and 68 out of 98 state legislative chambers — the highest number ever. And yet Republicans cannot simply root for ObamaCare’s demise this year. They must also assemble a package of reforms to put in its place.

State-level high-risk pools, for example, could provide targeted help to those with pre-existing conditions who otherwise cannot afford insurance. States could administer these pools, and the federal government could fund them until a properly functioning, competitive health care system was up and running.

ObamaCare purported to cover the uninsurable by simply decreeing as much — and forcing everyone to pay more for insurance in the process.

By segregating high-cost patients from the rest of the insurance pool, high-risk pools can ensure that premiums remain affordable for the vast majority of the population. Congress should also reform the tax code to allow individuals to purchase health insurance with pre-tax dollars, just like businesses can.

To ensure that low- and middle-income folks could take full advantage, lawmakers could make the credit refundable. Such a move would instantly make health insurance more affordable and level the playing field for all.

ObamaCare advocates might think the law is working wonders and is increasingly safe from repeal, but the public knows better. And so should Congress.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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