The Moment of Truth

[ERD50]

The insurance companies already have policies for the year with the language... so the contract would (or should) be honored until the next year's contract comes up... they then can take it out if they wish...

To me, that is the likely outcome of most of the things implemented... they will either stay in place because it would be seen as a bad move on the insurance company or the buying company.... as for individual policies, I would think there would be an option, with higher costs of course....

Ahhh, that makes sense. The contract is still in force, just maybe would not be renewed. That gives time to adjust. Thanks. - ERD50

 

[MichaelB]

This discussion presumes the Supreme Court will simply vote yea or nay on the provisions brought forward. They are not limited to those two options and can rule in a way that favors none of the litigants or opiners, there or here. They do not need to choose, they write their own rules, and there is plenty of precedent for them to fall back on.

 

[pb4uski]

Are you sure? I would think that they would be limited to deciding the issues appealed from the lower courts and would not have the leeway to "write their own rules".

 

[Independent]

Is anybody planning any concrete changes, or heard of strategies for this, based on this week's hearings? Of course, nothing has actually changed yet, but it's fair to say that the popular perception is that the law is in much more trouble than most people believed it would be. We'll obviously know more when the ruling is announced in Juine, or before then if information from deliberations becomes public, but maybe there's hedging or other practical steps that make more sense today than they did a week ago?

Me: The only way the ACA has affected me to date is that DD (23 YO) became eligible to stay on my (previous) employer's insurance plan. It's a big plan (TRICARE), so I'm watching for "what if" news on that.

Anyone else investigating options? Any value added in acting today?

If the law had been passed a few years earlier, we would have been impacted. My DS (23 YO) had a flare-up of a congenital problem that had never affected him until he was in law school. Knowing that he could buy individual insurance at standard rates would have been a relief in those days. I expect it would have made it easier for him to find a job after graduation, too.

A couple years after I ER'd I got a letter from my prior employer saying they were canceling their subsidized retiree health insurance plan. The letter arrived while my wife was on chemo. That impacted our finances noticeably.

But, I can't say that I would have planned differently, since I didn't foresee either of these and we had money in the retirement budget for unforeseen losses. I'll say that this stuff has made me more cautious about spending money today, because I've seen how quickly medical costs can pile up. I'll breath easier for all my kids if the law is upheld (DW and I will be on Medicare before 2014).

 

[Chuckanut]

IMO, the people who voted for this knew they could not get plan A passed... so they did plan B... and are hoping it sticks...

I agree that was the original hope of these people. But, if Plan B gets tossed because it is unconstitutional, then people will ask/demand something else. That is when Plan A will suddenly look a lot better than no reform at all. Just my 2 cents. I could be wrong.

 

[Gone4Good]

A simple Plan B (which further highlights that the existing bill is constitutional as written).

All we need to do is strike the word "mandate" and change the words "penalty" to "option premium' and ACA is 100% Constitutional.

Elsewhere we insert a paragraph explaining that by virtue of the guaranteed issue requirement on insurers, the government is granting every citizen a valuable financial option to purchase insurance at a standard rate even after they get sick when such insurance would not otherwise be available at those prices. Each year every person can pay the “option premium” to maintain this benefit, or they can exercise the option granted by the government and purchase private health insurance at then prevailing rates.

Now instead of a mandate to buy health insurance, the government is charging a fee for the valuable option the law conveys to those who don't want to buy insurance. It is the exact same bill but there should be no question whether the government has the right to extend benefits to everyone (like an option to buy insurance at healthy people's rates after they've gotten sick) or to charge a fee for those benefits.

It is important to note that the above tweak doesn't change the substance of the bill, all it does is change the way the bill is marketed. Marketed poorly, we're told the bill is Unconstitutional. Marketed as requiring a payment in exchange for something of value, it is clearly Constitutional.

 

[pb4uski]

So in your mind, if it is unconstitutional for the government to force people to buy insurance, it is constitutional for the government to force people to buy an option to buy insurance?

Seems like a distinction without a difference to me.

 

[Texas Proud]

A simple Plan B (which further highlights that the existing bill is constitutional as written).

All we need to do is strike the word "mandate" and change the words "penalty" to "option premium' and ACA is 100% Constitutional.

Elsewhere we insert a paragraph explaining that by virtue of the guaranteed issue requirement on insurers, the government is granting every citizen a valuable financial option to purchase insurance at a standard rate even after they get sick when such insurance would not otherwise be available at those prices. Each year every person can pay the “option premium” to maintain this benefit, or they can exercise the option granted by the government and purchase private health insurance at then prevailing rates.

Now instead of a mandate to buy health insurance, the government is charging a fee for the valuable option the law conveys to those who don't want to buy insurance. It is the exact same bill but there should be no question whether the government has the right to extend benefits to everyone (like an option to buy insurance at healthy people's rates after they've gotten sick) or to charge a fee for those benefits.

It is important to note that the above tweak doesn't change the substance of the bill, all it does is change the way the bill is marketed. Marketed poorly, we're told the bill is Unconstitutional. Marketed as requiring a payment in exchange for something of value, it is clearly Constitutional.

Actually, I disagree with your premise as presented... I think the challenge would be the same and likely the outcome...

Again, the reason that something else was not done was something else could not pass.... remember that they were trying to get a fed gvmt option at first which (FWICR) was not even able to be passed...

 

[samclem]

A simple Plan B . . .

Two probable issues:
1) The members of the Court may see this as being just a bit too "cute." Once (and if) they've said it's unconstitutional to force people to engage in commerce, it's unlikely that dressing it up differently will fix the problem. If my experience with my parents and bosses is any indication, getting approval for an idea once it has been disapproved requires at least the perception of a big change. They are justices, but people, too.
2) There's not much appetite in Congress for another ride on this particular horse. The beast has already killed off many of their associates and the public likes the legislation even less today than they did before.

If the Supreme Court rejects it, the public rejects it, and the Congress rejects it--maybe it will finally be time to admit that we have a bigger problem than the semantics/wording.

 

[Running_Man]

I was discussing this topic at work today and a coworker fully was hoping the law would be upheld and stated he would be willing to pay more in taxes to have the government run the healthcare. stating "I would pay my fairshare" . I then asked if he would be willing to pay the $12,000 - $18,000 cost the premium would cost his familiy if the goverment ran it and he said, "No, I would think 150 - 250 a month (about 3K) would be my share, if it cost more than that the rich should pay" I think that pretty much sums up the level of thought the average American has put into their healthcare costs and expects to pay. A very Greek-like approach.

Coming up with a plan to provide 12-18 K in family benefits for an entire country with 3K in taxes is a pretty hard to do scheme. Medicare alone is presently paying 15K per person over 65 and as that age population increases the ability to even afford that group is going to be incredibly difficult and a challenge our country should work to maintain. I plan on having an income stream of 20-25K per year for my healthcare retirement no matter what the government plans on doing. And when I saw the website showing what the government plans on charging for non-employeed Americans in the ACA I am glad that is my plan.
Health Reform Subsidy Calculator - Kaiser Health Reform

 

[Old Microbiologist]

Constitutionality

It is a big question. I hadn't looked at it as nothing tin the Act actually impact me or my family. My 87 year old mother is on Medicare and she is paying out just as much as before and her monthly costs are over $700. I am overseas and on Tricare Overseas and pay cash here in Hungary for health care which is so cheap it isn't really worth hassling over. I took a deeper look into actually weeding through the 2,000 pages of the Act. A couple of things don't add up to me. First, prior to the Act 36 million Americans were on Medicaid. By expanding this to include all "eligible" (and that is another whole can of worms) AND earn less than 133% of the poverty level which is roughly $13,000. By this process they added another roughly 4 million Americans to Medicaid. Those earning above the 133% like everyone else, now because of the individual mandate MUST purchase health care from a private source (not government agency thus it doesn't legally qualify as a tax. I believe for an individual that is somewhere between $600 and $1,000 a month. What are these people supposed to use for money to eat, much less a place to live? And non-compliance of buying insurance forces the penalty, which is probably going to be $1,000 a month. Failure to pay that fine results in prison (which might be a better deal as they get free health care, food, and a place to live). So, to benefit private insurers and to keep the government from actually running this we have this kludge of a law. Perhaps they should have instead added a Health Care Act tax of $1,000 a month to everyone and managed it directly the could still have subcontracted the work out to insurance companies and failure to pay the tax would be just like any other tax with typical penalties. The industry would keep reaping in the massive profits like they are now and everyone would more or less have identical coverage regardless of their income and status. People could still pay cash like I do here in Hungary or like people do in Canada, to get premium services. I find it difficult that it is constitutional for the government to order me to pay a private individual money and if I don't I go to prison. That is a slippery slope.

 

[obgyn65]

I am not as optimistic as you are.

My prediction is the SC will rule that the AHCA is constitutional and will stand as it is written.

 

[pb4uski]

......My 87 year old mother is on Medicare and she is paying out just as much as before and her monthly costs are over $700. .....I believe for an individual that is somewhere between $600 and $1,000 a month. ......and non-compliance of buying insurance forces the penalty, which is probably going to be $1,000 a month. .....So, to benefit private insurers and to keep the government from actually running this we have this kludge of a law. .....The industry would keep reaping in the massive profits like they are now....

Your mother's costs sound a bit high to me in that my 94 yo great-aunt is on Medicare and also has a Medicare supplement policy and her total health insurance (for both) is about $300/month. $600-$1,000 is probably in the range of what an individual policy would cost for a couple, not for one person based on my recent purchase of health insurance in a state where there are no pre-existing condition limitations. My understanding is that the penalty would be $1,000 to $2,400 a YEAR, not a month. Under the new law, the profits made by private insurers would be limited. If benefits are less than a certain percentage of premiums, then the insurer needs to refund any excess to the policyholders. If you look at health insurer returns on equity, they are in the mid to high teens, good but not outrageous compared to some other industries (like oil companies for example).

 

[Old Microbiologist]

Optimism?

I am not optimistic when I say I think the SC will uphold the law as written. I think it is a horribly drafted piece of legislation. If we are to have something meaningful for all people then it needs to be a single payer plan which was taken off the table in the first 10 minutes by our President. I am more worried about the slippery slope of ordering people to support businesses which as written is perhaps innocent enough as long as it pertains to health care but opens the door to other more draconian concepts. I think a clause must be in place to opt out of it altogether, in essence, total and complete freedom. Take for example a person who lives completely off the grid. They own their own land and are self-sufficient completely by growing all their own food and hunting. I suppose these people might be covered under Medicaid BUT they also must be eligible, i.e., have a disease that is covered. It isn't enough to just be poor to qualify for Medicaid. So, they are going to be required to buy insurance and if they don't they will be fined and if they don't pay the fine, and remember these are the same people that believe income tax is arguably unconstitutional, will go to prison merely for trying to stay completely uninvolved in American Society. They also could in fact be independently wealthy and again must buy a policy they don't want or perhaps need. That seems to me to be an onerous and burdensome mandate by our government.

As for my mother's costs I am including in the costs all her pharmaceuticals. Luckily as she is poor enough to get Lucentis for macular degeneration which costs $2,000 a shot but is covered by charity and is only partially covered ($400) by Medicare. But, her other medications also run around an additional $400 a month and are not paid by Medicare. Not to mention things like glasses, dental, or hearing aids also not covered by Medicare. I don't see Medicare as the great thing everyone touts it to be. In my mother's case nearly half her income goes for health care.

 

[Gone4Good]

1) The members of the Court may see this as being just a bit too "cute."

I agree that this may not work as a second bite at the apple. But what if this were the original approach? Would you still argue that if the law were described as conveying a benefit that the government charged a price for, that it would still be Unconstitutional?

 

[Gone4Good]

In keeping with MichaelB's observation that the Court rules in ways that satisfies only itself, one way they could choose to navigate this minefield is with a bit of fancy footwork.

The Court rules that it believes a government mandate would be Unconstitutional and any law with one risks being struck down. It further notes that the "mandate" in ACA is a financial incentive only, and a weak one at that. There is no remedy available to the government in the Law if people ignore the mandate and fail to pay the "penalty." Congress specifically forbade the threat of prison or additional penalty.

"In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure."

Instead of a mandate, what Congress has done in the ACA is create a voluntary contribution scheme and called it a mandate. As such, the law stands as written but the court reserves the right to review any legislative action that contains a true mandate backed by the power of the state.

I like it. In fact I'm predicting it. You heard it here first.

 

[Texas Proud]

I agree that this may not work as a second bite at the apple. But what if this were the original approach? Would you still argue that if the law were described as conveying a benefit that the government charged a price for, that it would still be Unconstitutional?

As I stated earlier, yes... if you look at Medicare, everybody pays the same 'rate' of tax on income... they also pay the same on the extra benefits... the only way you get help is if you qualify for Medicaid.... but, I know you disagree...

 

[Independent]

I was discussing this topic at work today and a coworker fully was hoping the law would be upheld and stated he would be willing to pay more in taxes to have the government run the healthcare. stating "I would pay my fairshare" . I then asked if he would be willing to pay the $12,000 - $18,000 cost the premium would cost his familiy if the goverment ran it and he said, "No, I would think 150 - 250 a month (about 3K) would be my share, if it cost more than that the rich should pay" I think that pretty much sums up the level of thought the average American has put into their healthcare costs and expects to pay. A very Greek-like approach.

Coming up with a plan to provide 12-18 K in family benefits for an entire country with 3K in taxes is a pretty hard to do scheme. Medicare alone is presently paying 15K per person over 65 and as that age population increases the ability to even afford that group is going to be incredibly difficult and a challenge our country should work to maintain. I plan on having an income stream of 20-25K per year for my healthcare retirement no matter what the government plans on doing. And when I saw the website showing what the government plans on charging for non-employeed Americans in the ACA I am glad that is my plan.
Health Reform Subsidy Calculator - Kaiser Health Reform

I think you've hit the key problem with medical care reform. Most Americans have no idea how much medical care "should" cost, or how much they are paying today.

According to Kaiser, the average cost of an employer group family insurance plan in 2011 was $15,000. The "employer share" was about $11,000 and the "employee share" $4,000. But, almost all economists would say that the employee really pays the $11,000 through lower wages. And, that's just the insurance premium. He also pays deductibles and coinsurance.

In addition, he pays Medicare taxes of 1.45%+1.45%, which is over $2,000 for a typical working couple. But some of Medicare is funded through income taxes, so they also pay that. Medicaid is funded through the federal income tax and through state taxes (sales? income?), so add on something for Medicaid.

I think he would be shocked if someone showed him what he is already paying for medical care for his family and for others.

 

[samclem]

I agree that this may not work as a second bite at the apple. But what if this were the original approach? Would you still argue that if the law were described as conveying a benefit that the government charged a price for, that it would still be Unconstitutional?

Well, I would still consider it unconstitutional (that is, outside the scope of the Constitution as it is written and amended). But, I feel that way about a lot of things that previous courts have found to be Constitutional. I think it's more likely the present court would have favorably considered the law if written as you propose, because it is more in keeping with precedent.
It was a bit of a rush job. As more than one fed up worker has mumbled "If you want it bad, you'll get it bad."

 

[Gone4Good]

As I stated earlier, yes... if you look at Medicare, everybody pays the same 'rate' of tax on income... they also pay the same on the extra benefits... the only way you get help is if you qualify for Medicaid.... but, I know you disagree...

I don't know if I disagree because I'm not sure I understand what it is you find unconstitutional.

The way I'm thinking about it, the example I outlined fits perfectly with the Medicare precedent. With Medicare the government defines a benefit that everyone gets, and charges everyone it feels is wealthy enough to pay for that benefit. Nobody gets a choice about the benefit, or a choice about whether to pay for it. My example works the same exact way, only they can opt out of paying for the benefit by getting private insurance.

 

[MichaelB]

I don't know if I disagree because I'm not sure I understand what it is you find unconstitutional.

The way I'm thinking about it, the example I outlined fits perfectly with the Medicare precedent. With Medicare the government defines a benefit that everyone gets, and charges everyone it feels is wealthy enough to pay for that benefit. Nobody gets a choice about the benefit, or a choice about whether to pay for it. My example works the same exact way, only they can opt out of paying for the benefit by getting private insurance.

In fact, one part of the charge is paid by everyone with earned income regardless of wealth or level of income. The benefit is divided into parts, one of which is deemed earned if the tax was paid over a long enough period. Additional benefits are available, voluntary, with one price and a single subsidy. Very straightforward.

 

[ziggy29]

I don't know if I disagree because I'm not sure I understand what it is you find unconstitutional.

The way I'm thinking about it, the example I outlined fits perfectly with the Medicare precedent. With Medicare the government defines a benefit that everyone gets, and charges everyone it feels is wealthy enough to pay for that benefit. Nobody gets a choice about the benefit, or a choice about whether to pay for it. My example works the same exact way, only they can opt out of paying for the benefit by getting private insurance.

IMO, Medicare sets a precedent for a "single payer" model with all the "premiums", taxes and reimbursements to providers handled by the federal government. The way the PPACA does it, the mandated premiums go entirely to private insurers. There is no precedent I'm aware of that allows the federal government to mandate, under threat of financial penalty, that people buy private products of any kind.

(And auto insurance is not a good counterexample. For one thing, driving is legally a privilege and not a right. Secondly, you don't HAVE to have car insurance; you just can't legally operate a motor vehicle on public roadways if you don't. And finally, the auto insurance mandates for those who *do* drive are state laws, not federal laws.)

This goes back to what I said the other day -- I think Medicare is a precedent that would have supported a "public option", and it's a little ironic that those who wanted PPACA *only* without the public option may have insisted against the only mechanism (as this proposed bill was being debated) which would have passed constitutional muster, assuming the court respected the precedent set by Medicare.

 

[M Paquette]

IMO, Medicare sets a precedent for a "single payer" model with all the "premiums", taxes and reimbursements to providers handled by the federal government. The way the PPACA does it, the mandated premiums go entirely to private insurers. There is no precedent I'm aware of that allows the federal government to mandate, under threat of financial penalty, that people buy private products of any kind.

(And auto insurance is not a good counterexample. For one thing, driving is legally a privilege and not a right. Secondly, you don't HAVE to have car insurance; you just can't legally operate a motor vehicle on public roadways if you don't. And finally, the auto insurance mandates for those who *do* drive are state laws, not federal laws.)

This goes back to what I said the other day -- I think Medicare is a precedent that would have supported a "public option", and it's a little ironic that those who wanted PPACA *only* without the public option may have insisted against the only mechanism (as this proposed bill was being debated) which would have passed constitutional muster, assuming the court respected the precedent set by Medicare.

Oddly enough, Medicare as an option combined with pools of private insurers with a 'must carry' requirement and a federal subsidy system more or less funded by a dedicated tax (on payroll or self-employment income) is in the Federal budget just passed by the House. Only for people 65 and older, of course.

 

[uofmbish]

In keeping with MichaelB's observation that the Court rules in ways that satisfies only itself, one way they could choose to navigate this minefield is with a bit of fancy footwork.

The Court rules that it believes a government mandate would be Unconstitutional and any law with one risks being struck down. It further notes that the "mandate" in ACA is a financial incentive only, and a weak one at that. There is no remedy available to the government in the Law if people ignore the mandate and fail to pay the "penalty." Congress specifically forbade the threat of prison or additional penalty.

This is very interesting news to me! So someone without insurance can receive a bill for the fee, and if they refuse to pay…nothing happens? If the mandate is actually this toothless, there really is no impact from the SC striking down the "mandate." Those willing to game the system can do so without a real penalty in either case.

I suddenly care much less about the outcome

 

[TromboneAl]

Certainly. They easily could have written the law to bump every tax bracket up 1%-2.5% (the size of the penalty), included a per-person tax deduction for everyone who buys health insurance equal to 1%-2.5% of AGI, dropped the word "mandate," and the word "penalty" and the whole thing would be constitutional. The ease with which we can achieve the same exact thing by slightly different means exposes the silliness of this whole debate.

OK, now that we've decided that the penalize vs. tax and deduct protocols are essentially equivalent, would that be a reasonable argument:

Advocate: Your honors, if you would approve a tax and deduct protocol, and you agree that it is equivalent to a penalize protocol, shouldn't you approve it?

Justice: But it is worded as a penalty.

Advocate: But it's equivalent.

Justice: It's the principle of the thing.