Obamacare in the Balance: Will the Court Ruling Really Matter?
Until the justices speak, only one thing can be known for certain: The decision will change the lives of tens of millions of Americans.
The Story So Far
It's been more than two years since the Patient Protection and Affordable Care Act -- aka Obamacare -- became law. On the one hand, it runs to thousands of pages of new rules, yet it still falls short of a total solution to the nation's health care problems.
Make no mistake. The law has makes significant changes:
- There's a ban on "lifetime limits" on the amount of benefits an insured person can collect.
- Insurers must justify decisions to increase insurance premiums.
- 50,000 children age 18 and under have been able to obtain coverage despite pre-existing conditions.
- Millions of women can now receive mammograms and other preventive care with no deductibles and no copays.
- 2.5 million children are now able to stay on their parents' health insurance policies up through age 25.
- 5.1 million seniors are receiving discounts on prescription drugs, helping to fill the Medicare Part D "doughnut hole."
One reason many people think Obamacare has hurt them, or at least not helped, is that many of the law's biggest benefits haven't taken effect yet. If Obamacare survives the Supreme Court's ax, it will still be another year and a half -- 2014 -- before the major provisions kick in. Benefits such as:
- A universal prohibition on denying coverage for pre-existing conditions.
- Prohibition of capping the annual amount that will be paid out on a patient's claims.
- Requiring insurers to cover the cost of experimental treatments.
- Tax credits for "low-income" consumers -- as much as $43,000 annual income for an individual, or $88,000 for a family of four.
- Establishment of "insurance exchanges" -- a competitive market for insurance plans.
- Health-care tax credits for small businesses.
- And most importantly, the "individual mandate" -- a requirement that everyone in America either buy a health insurance policy or pay a penalty.
The Road Ahead
It's this last provision that's most questionable. The court must first decide whether health care is part of "interstate commerce." And second, it must decide whether Congress can use the Constitution's Commerce Clause to require Americans to buy insurance -- a novel question of law.
If the court finds in the negative on either point, then the individual mandate goes away -- and we're in a real pickle. The insurance industry will be saddled with a host of expensive benefits it must provide, but not enough money to pay for them. Insurance rates will skyrocket -- perhaps by as much as 40%.
Recognizing this, the court could well decide that Obamacare is unworkable without the mandate, and wipe the whole thing off the map. In this case, all the changes instituted over the past two years could go away.
Jeffrey Young, writing for our sister site, Huffington Post Business, points out that health-care providers have already instituted "new consumer protections to health plans, [altered] the way medical providers get paid and [taken steps] to improve health and save money. Experts say the push by President Barack Obama's health care reform has created an unstoppable momentum."
Motley Fool contributor Rich Smith has no investment-related dog in this fight, neither owning stock nor selling it short in any health care companies.