The U.S. Supreme Court is set to issue its ruling in California v. Texas, the latest case challenging the constitutionality of Obamacare, later this month. The conventional wisdom holds that the high court will uphold the law. But that’s no sure thing.
Regardless of what the court decides, Obamacare has failed on the merits. People who shop on the exchanges created by the law have had to deal with surging premiums and deductibles that provide them access to narrow networks of doctors and hospitals. The cost of the law to taxpayers has been roughly double what President Obama promised. And millions of people are still uninsured.
The coalition of Republican state attorneys general challenging Obamacare maintain that the law is unconstitutional because one of its central components — the individual mandate to purchase health insurance — has been effectively repealed. The 2017 Tax Cuts and Jobs Act zeroed out the tax penalty for failing to purchase coverage. The challengers argue that the individual mandate is not “severable” from the rest of the law. Without it, the whole thing must fall.
It’s a controversial argument, one that even many conservative and libertarian legal scholars don’t buy. At oral arguments in November, Chief Justice John Roberts and Justice Brett Kavanaugh did not seem sympathetic to the position of the Republican state attorneys general.
What’s remarkable is that the left has taken the current challenge to Obamacare more seriously than has the right. As many progressives see it, California v. Texas represents a grave threat to the coverage of millions of Americans, particularly those with pre-existing conditions.
To support this claim, Obamacare’s partisans cite an analysis from the Kaiser Family Foundation estimating that 54 million Americans live with a pre-existing condition that would have left them uninsurable in the individual market of many states before Obamacare.
A report issued by the U.S. Department of Health and Human Services in the waning days of the Obama administration asserted that 133 million Americans have such pre-existing conditions — and “could have been denied coverage, or offered coverage only at an exorbitant price, had they needed individual market health insurance before 2014.”
The implication is that challenges to Obamacare somehow endanger the coverage of this massive segment of the population. But that isn’t the case.
For starters, Obamacare’s pre-existing condition protections apply to the individual market. In the employer-based market, workers with pre-existing conditions have long been protected by provisions in the Health Insurance Portability and Accountability Act of 1996.
As of 2019, fewer than 19 million Americans were covered in the individual market. So it’s misleading to claim that 133 million people would see their coverage jeopardized absent Obamacare.
What’s more, Obamacare’s pre-existing conditions regulations — as well as restrictions on what insurers can charge older sicker patients — are among the reasons exchange coverage is so expensive.
Average premiums for a Healthcare.gov plan in 2017 were more than double average individual-market premiums in 2013, the year before Obamacare’s many mandates took effect. Deductibles have also gotten out of hand. This year, the typical bronze plan has a deductible of nearly $7,000.
On top of that, nearly three-quarters of exchange plans have narrow provider networks and thus severely restrict which doctors patients can see.
Is it any wonder, then, that more and more patients are choosing to forgo coverage altogether rather than purchase an Obamacare exchange plan?
In the unlikely event that the Supreme Court overturns Obamacare, the result wouldn’t be a crisis that puts millions of lives in danger. Instead, it would be the end of a law that has made high-quality private coverage less accessible and less affordable.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is “False Premise, False Promise: The Disastrous Reality of Medicare for All,” (Encounter 2020). Follow her on Twitter @sallypipes.