The Individual Health Insurance Marketplaces opened in 2013, and despite a few hiccups, many would argue Obamacare is working. But what about the long-term reliability of Obamacare? Will it stand the test of time? Of course, with any new law, there will always be opposition and hurdles to overcome, and many studies have analyzed Obamacare’s ability to endure for years to come. As part of our Affordable Care Act (ACA) series, this article discusses the various factors playing into the longevity of Obamacare including Supreme Court Hearings, how hospitals are impacted by Obamacare, and the effect of the premium tax credits.
Major Obamacare Road Block: King v. Burwell Case
Last week, I wrote an article titled, “Is Obamacare at Its End? [ACA Series].” In the article, I talked about the King v. Burwell case and the recent hearing by the Supreme Court. Knowing that the future of Obamacare largely hinges on the outcomes of this case, it’s hard to definitively say whether or not the Supreme Court is in favor of the plaintiff based on the hearing.
So, what would happen if the Court is in favor of the plaintiff’s arguments that the text of the Obamacare law only allows for federal premium tax credits to be used on state-run exchanges? When the Supreme Court makes their final decision in June, we’ll know for sure. Based on the oral arguments of March 4th, so far, the four left-leaning justices - Breyer, Ginsburg, Sotomayer, and Kagan - appear to be in favor of allowing tax credits in federal exchanges. Justices Scalia, Thomas, and Alito will likely rule to restrict the access to premium tax credits. Which leaves Chief Justice Roberts and Justice Kennedy.
After the hearing, it would appear Kennedy is in favor of expanded access of premium tax credits after he expressed concern that Obamacare would not survive if the ruling was in favor of the plaintiff. As far as Chief Justice Roberts goes, it’s difficult to say what his final decision will be.
A Court ruling in favor of restricted access to premium tax credits would break the ACA’s formula for mandating insurance coverage while guaranteeing controllable costs to individuals. It is estimated that 9.6 million Americans would lose their access to premium tax credits.
How Have Hospitals Been Affected by Obamacare?
According to a study conducted by Robert Wood Johnson Foundation and Athenahealth, doctors have not been trampled by new patients as some may have predicted would happen as a result of Obamacare.
The data which was gathered from 15,700 of Athenahealth’s clients (mostly physicians) was intended to measure how Obamacare has affected doctors. What they found was surprising -- new-patient visits to primary care providers increased very slightly during 2014, from 22.6 percent of total patient visits to 22.9 percent. These new patients were not sicker than patients who were insured before the Obamacare took effect, as some predicted. Percentages of patients diagnosed with chronic conditions including diabetes, high blood pressure, and high cholesterol remained comparable with past years.
Does this mean Obamacare will be a long-term solution to America’s health insurance dilemma? Again, it’s hard to say. As for now, the Robert Wood Johnson Foundation and Athenahealth study concludes that Obamacare is not negatively affecting physicians. Had the study found that hospitals were flooded with new patients, it would be difficult to know how long facilities could operate under those conditions before losing the ability to see patients quickly.
The Effect of Premium Tax Credits: Good or Bad?
Whatever your view on premium tax credits is, Fool.com says they could be doing just as much harm as they are good. Why? Though many Americans who previously were unable to afford health insurance are now able to go to the doctor for a wide array of preventive health measures, some found they owed the government money back for utilizing advanced premium tax credits.
Where the problem lies is for individuals who choose to use their premium tax credits to reduce their monthly premium at the time of purchase -- as opposed to those who wait until they file their taxes to receive their refund. Many times individuals who use their advanced premium tax credits to reduce monthly premiums underestimate their household income, causing a repayment at tax-filing time.
Kaiser Family Foundation (KFF) estimated that half of U.S. households eligible for a tax subsidy under the health law would owe a repayment. KFF estimated that the average repayment is $794. Additionally, 45 percent of individuals who received premium tax credits would receive a refund for over-estimating their household income and will receive a refund on average of $773.
What does this mean for the longevity of Obamacare? Most likely year after year, some number of American’s will continue to over or under-estimating their household incomes -- resulting in owing money to the government or getting a refund. If a long-term solution isn’t found, the question is, how many American’s will be nervous to utilize premium tax credits?
Obamacare has been around since 2010 now. Americans are just getting used to the individual and employer mandate, and starting to get a grasp on what Obamacare is doing for the country. Despite whether you’re for Obamacare,or against it, the health reform law will have an impact for many years to come. The question is, in 10 years will we look back at Obamacare as a positive force in the healthcare industry, or one we would like to forget?
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