The Supreme Court and Obamacare

Ever since President Barack Obama signed Obamacare into law, Republicans have tried to shut down. They may want to be more cautious about what they hope for in the future.

Republicans criticize the Affordable Care Act at every opportunity, yet they have never come up with any kind of alternative. This tactic will have run its course if Supreme Court rules in the King versus Burwell case that federal government insurance subsidies are illegal in the 27 states that do not have state insurance exchanges.

If this happens, Republicans seem under the illusion the Affordable Care Act will simply go away. We’ll go back to pre Obamacare and all will be well with the world. Unfortunately, this scenario is naïve at best and blatantly stupid at worst .

The Obamacare reality

Wisconsin does not have a state insurance marketplace. Eighty-nine percent of the 207,349 Wisconsinites enrolled in the Affordable Care Act’s online exchange in 2015 qualified for subsidies averaging $315 per month. This works out to over $58 million. The average subsidy for these folks is 76 percent. Add in the 24 percent paid in additional premiums and the total paid by this group is over $72 million per month.

Without the subsidies, most, if not almost all the people in this group couldn’t afford their insurance and would drop it. On an annual basis, this would take $865 million out of Wisconsin’s health care system. One doesn’t have to be an expert in health care economics to figure out that taking $865 million of income out of Wisconsin’s medical system will at least seriously cripple and in a worst case scenario, bankrupt the state’s health care establishment.

Governor Scott Walker would be inundated with protestors. These won’t be the kind of protesters he could have the state police shag out of the Capitol. These would be insurance and hospital executives with six and seven-figure salaries worried about their personal livelihood unless something is done to get the people subsidized by the federal health insurance marketplace back into the system.

Newly uninsured people with health problems and not enough income to pay for them will go back to expensive emergency room treatment. Doctors who swore an oath to treat the sick and injured will do so, causing even more problems for cash strapped hospitals and clinics.

Obamacare, will the song sound different if played by a Republican?
Obamacare, will the song sound different if played by a Republican?

To make matters worse, health insurance is more expensive in Wisconsin than states like Minnesota that have state health insurance exchanges. An online calculator at the Kaiser Family Foundation website (http://kff.org/interactive/subsidy-calculator/) quantifies the differences.

Entering in a family of four with non-smoking adults aged 42 and 43 making $55,000 annually and two non-smoking children using both St. Paul, Minnesota and Madison, Wisconsin zip codes, the Silver policy in Minnesota cost $639/month and in Wisconsin $789/month. After federal subsidies, they each cost $340/month.

Worse nationally

Multiply the $865 million income loss Wisconsin’s healthcare system potentially loses by 27 for an estimate of the national impact. Republicans in Congress will have to come up with a replacement for the Affordable Care Act very quickly. They won’t have time to do their usual pontificating.

Other articles on this website have argued that the Affordable Care Act was always more about rescuing the health insurance industry than providing universal health care insurance for all citizens.  If the Supreme Court rules against Obamacare, Congress must face this reality.  Health care represents about 18 percent of the US Gross Domestic Product. Letting that part of the economy become insolvent simply isn’t an option.

The insurance industry won’t allow efforts to re-engineer the Affordable Care Act without the insurance mandate. The insurance mandate is the requirement that everyone must have health insurance or they will have a penalty fee added to their taxes.  One Obamacare criticism is that not enough people have signed up to keep the system solvent. Take away or weaken the health insurance mandate and the problem is exasperated. Under intense time pressure from all directions, Republicans would be forced to re-write the Affordable Care Act to include the federal exchanges and with no other substantive changes.

Odds are, the Supreme Court won’t let this Doomsday scenario unfold. However, the thought of Republicans having to put their name on something they’ve fought for years would be poetic justice.


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