Tag Archives: U.S. Supreme Court

Obamacare likely to Stay, Despite Lawmakers’ Attempt to Repeal

U.S. healthcare executives say Obamacare is likely here to stay, despite repeated calls from Republican lawmakers for repeal of the 2010 law aimed at providing health coverage for millions of uninsured Americans.

Top executives who gathered in San Francisco this week for the annual J.P. Morgan Healthcare conference, say that while President Obama’s signature domestic policy achievement may well be tweaked, it is too entrenched to be removed.

The Obama administration said in November that it aims to have over 9 million people enrolled in government-backed federal and state health insurance marketplaces in 2015, their second year of operation. Another 10 million have enrolled for coverage under an expansion of the Medicaid program for the poor.

Opponents of the law in the newly-elected Congress, now dominated by Republicans, seek to replace Obama’s Affordable Care Act with their own healthcare reforms. Some are betting that the U.S. Supreme Court strikes down the federal tax subsidies helping the uninsured buy coverage in 36 states.

For private health insurers and hospitals, the addition of millions of new covered patients has helped buoy their profits. Drugmakers have benefited from the increase in the number of patients eligible for reimbursement of prescription medications.

Repeal of the Affordable Care Act “is not a possibility,” George Scangos, chief executive officer at biotechnology company Biogen Idec Inc, said in an interview. “They would somehow have to explain to millions of people that they will lose health insurance.”

Aetna Inc, the third biggest health insurer, said it is talking to Republicans and Democrats about a possible “grand bargain” to salvage Obamacare if the Supreme Court up-ends the healthcare law later this year.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Court Rules: No Subsidies for Individuals for Health Insurance

A federal appeals court has ruled the Obama administration cannot subsidize insurance premiums for nearly 7 million Americans, dealing a serious blow to the Affordable Care Act (this does not impact state funded exchanges like New York and Connecticut). The ruling sets up an almost-certain appeal to the U.S. Supreme Court.

Two judges with the D.C. Circuit Court of Appeals in Washington ruled Tuesday that the text of the reform law clearly forbids income-tax subsidies to go to low- and middle-income Americans who use one of the 34 federally run insurance exchanges. The tax subsidies have been flowing since the beginning of the year, based on a 2012 interpretation of the law by the IRS.

The actual text of the law says the sliding-scale tax credits are only available for coverage purchased “though an exchange established by the state,” which only 16 states did. IRS officials had claimed the imprecise wording of the law contradicted Congress’ overall intent to expand insurance coverage as widely as possible. But that argument did not win the day Tuesday.

“Because we conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges “established by the State,” we reverse the district court and vacate the IRS’s regulation,” the two-member majority wrote.

The ruling was the second dose of bad news for the Democrat-passed reform law this summer. Last month, the Supreme Court dealt a major symbolic blow to the law by ruling in Burwell v. Hobby Lobby Stores that the administration could not force the owners of closely held corporations to defy religious objections and cover contraceptives in their employees’ insurance plans. The ruling prompted new legislation to ensure contraceptives are covered without cost for millions of women, but the future of that proposal is far from certain.

Tuesdays ruling poses a much greater financial threat to the law’s internal function, but the decision was not altogether surprising.

During oral arguments in March, the judges seemed to be split along the partisan lines that eventually became the 2-1 vote on Tuesday, with Republican-appointed judges Thomas Griffith and A. Raymond Randolph voting for the plaintiffs and Democrat-appointed judge Harry Edwards siding with Obama’s IRS.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary