ACA at risk?

[Smitty700]

Maybe the law can be changed to incorporate a "wealth" test instead of the current MAGI test; then I think the costs might become more bearable to the public (i.e., taxpayers) and the system (i.e., exchanges) can stay.

A wealth test may not pass constitutional muster.

Today's ACA is based on the Premium Tax Credit and the Shared Responsibility Payment (now $0), both of which are based on income.

The Constitution prohibits federal direct taxes that are not apportioned by population, except for the income tax which is specifically permitted by the Sixteenth Amendment.

So legal scholars are debating whether taxes based on wealth would be constitutional. There were a flurry of articles about this recently when Senator Warren proposed wealth taxes.

 

[audreyh1]

Beat me to this important point.
It would also take a decent amount of time for it to be heard in the SC.
Need 5 more years of this coverage.

Same here.

 

[ziggy29]

Actually the ACA was not changed.

It was the tax bill where they changed the individual mandate tax to $0.

Well, here is a question: Did they repeal the mandate outright, or did they change the tax to $0? If the latter, I could see the ACA surviving the court challenge, since there is still technically a mandate on the books, but its "tax" rate was set to zero, and Congress would retain their power to tax it. It's a technicality but there is a chance it could be a critical distinction.

 

[Aerides]

Well, here is a question: Did they repeal the mandate outright, or did they change the tax to $0? If the latter, I could see the ACA surviving the court challenge, since there is still technically a mandate on the books, but its "tax" rate was set to zero, and Congress would retain their power to tax it. It's a technicality but there is a chance it could be a critical distinction.

It was the latter. Congress removed the penalty as a line item in the big tax bill from December 2017, not the actual mandate.

 

[ziggy29]

It was the latter. Congress removed the penalty as a line item in the big tax bill from December 2017, not the actual mandate.

That is what I thought, but wasn't sure of it. IMO that significantly increases its chances to survive another court challenge, since Congress still retains the power to enforce the mandate through penalties (taxation).

An outright repeal of the mandate would have been a lot tougher to defend against, since it removes Congressional power to enforce through taxation. All that said, you never know what they are going to do, so if someone has more than a year or two before they expect access to other insurance, preparing for a Plan B might be prudent, hoping that it will not be necessary.

I suspect all eyes will be on Roberts again. I think it's safe to say he will likely be the swing vote on this one.... again.

 

[joeea]

Maybe the law can be changed to incorporate a "wealth" test instead of the current MAGI test; then I think the costs might become more bearable to the public (i.e., taxpayers) and the system (i.e., exchanges) can stay.

Maybe.

But that won't happen by wiping out the current law.

 

[joeea]

if someone has more than a year or two before they expect access to other insurance, preparing for a Plan B might be prudent, hoping that it will not be necessary.

Other than "deal with whatever happens to come your way at that time, and worst case get back to work for a company offering healthcare", I don't know what kind of Plan B makes any sense at this time.

Do you?

 

[explanade]

Maybe.

But that won't happen by wiping out the current law.

Actually can they amend laws after they've passed?

Or do they have to get rid of it in its entirety first and then replace it?

I guess depends on what kind of change it is. If it substantially changes the existing law, no point in keeping it, might as well come up with new legislation.

 

[footenote]

Washington Post:

-- If the high court took up the case, many analysts presume that Chief Justice John Roberts would find a way to save the law again, as he did in 2012. But the dynamics have changed in the past seven years. Brett Kavanaugh and Neil Gorsuch haven’t ruled on the ACA since joining the high court, but their records lead experts across the ideological spectrum to say there’s a high probability that they’d both vote to kill the law if they could, even if they’re dissenters. [mod edit]

Full article: https://www.washingtonpost.com/news...a544a1b326b0f7f38f26f/?utm_term=.e6ade43c459b

 

[Smitty700]

Actually can they amend laws after they've passed?

Or do they have to get rid of it in its entirety first and then replace it?

I guess depends on what kind of change it is. If it substantially changes the existing law, no point in keeping it, might as well come up with new legislation.

Congress and does amend laws very often. In fact, that's what happened to the ACA individual mandate. Congress amended the law to make the Shared Responsibility Payment $0.

And an aside. Congress could avoid this whole constitutionality question by making the Shared Responsibility Payment $1. The tax would still be present, and Roberts' 2012 opinion would still stand.

 

[ziggy29]

Other than "deal with whatever happens to come your way at that time, and worst case get back to work for a company offering healthcare", I don't know what kind of Plan B makes any sense at this time.

Do you?

Well, it's more like Plan Z, but unfortunately "go back to w*rk" is an option, at least for some. Hope it doesn't come to that for many, but....

 

[ivinsfan]

Washington Post:

-- If the high court took up the case, many analysts presume that Chief Justice John Roberts would find a way to save the law again, as he did in 2012. But the dynamics have changed in the past seven years. Brett Kavanaugh and Neil Gorsuch haven’t ruled on the ACA since joining the high court, but their records lead experts across the ideological spectrum to say there’s a high probability that they’d both vote to kill the law if they could, even if they’re dissenters. [mod edit]

Full article: https://www.washingtonpost.com/news...a544a1b326b0f7f38f26f/?utm_term=.e6ade43c459b

political clickbait....

 

[joeea]

Well, it's more like Plan Z, but unfortunately "go back to w*rk" is an option, at least for some. Hope it doesn't come to that for many, but....

Sure.

I suppose that's always some sort of "plan". I know if for some unanticipated reason, all our years of hard work and planning fail to produce enough safe retirement income, we'll find a job doing something.

But for most, there's no preparation needed in that regard and no prudence. There's simply nothing actionable for most, other than to wait and see what actually happens and then deal with it as it happens.

 

[donheff]

I think the argument about the ACA is a little more convoluted than described. As I understand the situation the SC held that a mandate would be unconstitutional except that in reality it isn't a mandate, it's a tax for not carrying insurance. Setting the tax rate to $0 should not affect the legality of establishing a "mandate tax." Instead, the states argue that the viability of the entire edifice of the ACA hangs on having a real mandate/tax to force people to participate. In the absence of those people participating so the argument goes, the insurance companies are put in an impossible position. They have to cover pre-existing conditions. no caps, full coverage, low rates, etc., but people can wait until they get sick to sign up. This makes the whole house of cards an impossible burden on the industry and thus unconstitutional. One problem with that argument is that the insurance companies haven't cratered without the mandate.

 

[Crabby Mike]

Sadly, it seems that of "repeal and replace" (not that there was ever a "replace" strategy in place anyway), in the current environment "repeal" is possible via the Supreme Court, but "replace" depends on a divided Congress, and is thus a non-starter IMHO.

 

[joeea]

Setting the tax rate to $0 should not affect the legality of establishing a "mandate tax."

Except that's exactly the argument the red state attorneys general brought before the court.

https://constitutioncenter.org/blog/doj-moves-to-oppose-all-of-obamacare-in-court :
"The decision held that without a fine related to Obamacare’s individual mandate, which was eliminated by Congress in 2017, the rest of the health care law’s features could not survive a constitutional challenge."

 

[samclem]

One problem with that argument is that the insurance companies haven't cratered without the mandate.

Agreed. Eliminating the mandate has hardly changed the participation rate at all (many think the tax/fee provided by the ACA was ineffective--just too small relative to the cost and perceived value of the insurance).

 

[explanade]

Sadly, it seems that of "repeal and replace" (not that there was ever a "replace" strategy in place anyway), in the current environment "repeal" is possible via the Supreme Court, but "replace" depends on a divided Congress, and is thus a non-starter IMHO.

There wasn't a replacement plan when the Congress wasn't divided either.

 

[joeea]

There wasn't a replacement plan when the Congress wasn't divided either.

And that's the reason the repeal failed in the non-divided Congress.

 

[ziggy29]

Except that's exactly the argument the red state attorneys general brought before the court.

https://constitutioncenter.org/blog/doj-moves-to-oppose-all-of-obamacare-in-court :
"The decision held that without a fine related to Obamacare’s individual mandate, which was eliminated by Congress in 2017, the rest of the health care law’s features could not survive a constitutional challenge."

Maybe. But let's not forget that this was Texas, where you would be inclined to expect a ruling a bit more than, say, from California. And it seems that even some in the administration think the president's position and instructions to DOJ will not be upheld, because the theory is that the law still gives Congress the power to enforce the mandate through "taxation" (the penalty for being uninsured).

So the question is, as long as the law still gives Congress enforcement power through the tax code, is that enough? One Texas court is hardly the harbinger of what the Supreme Court would say.

 

[Beststash]

I hope it doesn't go away and doubt that it will

After retiring early (52), my former mega-corp employer cut pre-65 retiree health insurance. I benefited from it (ACA) after 3 years of having to pay for high-risk pool coverage in Texas because of a "pre-existing" condition. When the ACA came along I was thankful and even though I didn't qualify for subsidies it was much more affordable that the HR Pool until I reached Medicare age.

If it is replaced in any manner I suspect that features such as pre-existing conditions and able to keep child till 26 will remain.

I love Medicare...mainly because I have a PPO Advantage plan with low maximum OOP. Although not sure how long that will last.

 

[220volt]

You should never, ever bet on any kind of certainty in the US considering its political system. Not ACA, not Roth not SS. Especially something as divisive as ACA.
Nothing is safe anymore. Who is to say congress won't start taxing Roth or full SS? Temperature of the system an d the whole country can change at frightening speed.

Once we FIRE we are moving to Europe until Medicare. If Medicare gets moved up or is not there at all, we stay in Europe.
We are not relying on any ACA or subsidies or messy promises.

 

[aaronc879]

Without getting "porky", what do you think the chances are that ACA - particularly the subsidies - is at risk of disappearing?

Just the likelihood of elimination, possible program changes, etc.,. No politics please.....


(question spurred by recent Justice Dept. ruling...)

I think the only way ACA goes away is if we go to Single Payer/Medicare For All type of program. Subsidies could potentially be net worth based. Doesn't make a lot of sense for millionaires to be getting subsidies. I think subsidies will stay as they are until Medicare for all takes over.

 

[joeea]

Maybe. But let's not forget that this was Texas, where you would be inclined to expect a ruling a bit more than, say, from California.

That's not really the point.

Hopefully everyone understands red state / blue state partisanship.

I was pointing out the incorrectness of what was stated regarding the challenge. ("Setting the tax rate to $0 should not affect the legality of establishing a "mandate tax.")

And it seems that even some in the administration think the president's position and instructions to DOJ will not be upheld, because the theory is that the law still gives Congress the power to enforce the mandate through "taxation" (the penalty for being uninsured).

So the question is, as long as the law still gives Congress enforcement power through the tax code, is that enough? One Texas court is hardly the harbinger of what the Supreme Court would say.

So you are trying to guess how the Supreme Court will eventually rule? That's a different question.

 

[skipro33]

There's something I do not understand about the legality of ACA. As stated;

By a vote of 5–4, the Court upheld the individual mandate component of the ACA as a valid exercise of Congress's power to "lay and collect taxes" (Art. I, §8, cl. 1).

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;​

I have my medical insurance paid by my employer before I was retired and now as well after I am retired. (To be modified when I'm eligible for MediCare.) So how is it that this considered a tax, and mandated to be uniform throughout the US, that I don't pay anything for it? I understand the benefit aspect was earned during my retirement years based on my work years, but I honestly don't see that as a fair assessment of a 'uniform tax'.

As a tax, is it treated as any other tax would be for filing purposes? I've never had to consider it.


***EDIT***
After further consideration, perhaps the crux of the ruling is that the 'tax' is the penalty for not purchasing medical insurance? If so, then the ACA forces everyone to buy from a private company, a product they may or may not want to buy. Is there any other time in US history where a citizen has been forced to buy a product from a vendor for any reason or suffer a penalty in the form of a 'tax'?
​