Avoid­ing health­care chaos

Los Angeles Times - - OPINION - Y the end

Bof this month, the Supreme Court is ex­pected to de­cide whether to throw out a cru­cial piece of the 2010 health­care law: the in­sur­ance sub­si­dies for lower-in­come Amer­i­cans in the 34 states that have in­sur­ance-buy­ing mar­ket­places op­er­ated by the fed­eral gov­ern­ment. The prospect that the sub­si­dies might be elim­i­nated has some Oba­macare crit­ics in the GOP tin­gling in an­tic­i­pa­tion, but oth­ers are rightly wor­ried about the po­ten­tial for health in­sur­ance chaos and harm to their con­stituents. The prob­lem for the lat­ter is com­ing up with a plan that wouldn’t leave peo­ple worse off than they were be­fore Oba­macare.

The law­suit, King vs. Bur­well, is one of sev­eral filed by op­po­nents of the 2010 law that chal­lenge how the Obama ad­min­is­tra­tion in­ter­preted one line buried in the 955-page statute. The plain­tiffs ar­gue that the plain lan­guage of the pro­vi­sion lim­its sub­si­dies to the states that es­tab­lished their own ex­changes, as Cal­i­for­nia and 15 oth­ers have done. Although one fed­eral ap­peals court agreed, the one hear­ing King’s case said such an in­ter­pre­ta­tion makes no sense in the con­text of a law de­signed to make health cov­er­age avail­able to all Amer­i­cans.

The sec­ond is the right read­ing, but the Supreme Court has the fi­nal say. And if the jus­tices agree with King, more than 9 mil­lion peo­ple will lose their sub­si­dies the mo­ment their de­ci­sion goes into ef­fect.

That would be a ter­ri­ble re­sult, forc­ing many lower-in­come Amer­i­cans to go back to emer­gency rooms for the care they ur­gently need but can’t pay for. Those costs would ul­ti­mately get passed on to ev­ery­one who has in­sur­ance. Mean­while, the loss of sub­si­dies would drive many younger and health­ier peo­ple out of the in­di­vid­ual mar­ket, caus­ing pre­mi­ums to shoot up 35%, one study es­ti­mates. Sev­eral polls in re­cent months have shown that most peo­ple do not want the sub­si­dies to evap­o­rate, even if they have other com­plaints about Oba­macare.

The sim­plest fix would be for Congress to change the dis­puted pro­vi­sion to clar­ify that sub­si­dies are avail­able in ev­ery state, but that’s not go­ing to hap­pen: Repub­li­can mem­bers of Congress aren’t will­ing to do any­thing that extends the life of Oba­macare. The same prob­lem is likely to pre­vent leg­is­la­tors in many of the 36 af­fected states from set­ting up their own ex­changes.

To avert the loom­ing cri­sis, sev­eral Repub­li­cans in Congress have floated plans that would ei­ther act as stop­gap mea­sures or per­ma­nent re­place­ments for the 2010 law. In ad­di­tion to con­tin­u­ing the sub­si­dies for some of those el­i­gi­ble to­day, all of th­ese pro­pos­als would pre­serve some of the most popular in­sur­ance re­forms of the 2010 law, par­tic­u­larly the ban on deny­ing cov­er­age to peo­ple with pre­ex­ist­ing con­di­tions, while re­peal­ing the least popular re­quire­ments. The prob­lem in each case is that they would leave too many peo­ple unin­sured while also cre­at­ing new prob­lems for ev­ery­one else.

The most prom­i­nent of th­ese pro­pos­als is a bill by Sen. Ron John­son (R-Wis.) that is cospon­sored by more than half of his Repub­li­can col­leagues, in­clud­ing Ma­jor­ity Leader Mitch McConnell (R-Ky.). John­son de­scribes the bill, S 1016, as a bridge be­tween Oba­macare and a new ap­proach to health­care re­form that Repub­li­cans would try to en­act af­ter Pres­i­dent Obama leaves of­fice. It would al­low sub­si­dies to con­tinue in states us­ing fed­er­ally op­er­ated ex­changes un­til Septem­ber 2017, but it would deny them to any­one in those states who doesn’t al­ready have a sub­si­dized pol­icy. That would freeze out the sur­pris­ingly large num­ber of lower-in­come peo­ple who move in and out of el­i­gi­bil­ity as their in­comes fluc­tu­ate. To help those con­sumers, the bill would al­low states to ap­prove less com­pre­hen­sive in­sur­ance plans than the 2010 law al­lows. Cheap poli­cies with limited cov­er­age, how­ever, won’t be much help to any­one who doesn’t stay healthy and in­jury-free.

John­son’s bill would con­tinue re­quir­ing in­sur­ers to cover ev­ery­one re­gard­less of pre­ex­ist­ing con­di­tions while elim­i­nat­ing the re­quire­ment that in­di­vid­u­als and busi­nesses ob­tain cov­er­age. End­ing the in­di­vid­ual and em­ployer man­dates may be shrewd po­lit­i­cally in a GOP-con­trolled Congress, but it would cre­ate an un­sus­tain­able in­sur­ance sys­tem. With no penalty for not car­ry­ing in­sur­ance, the bill would en­cour­age peo­ple to drop their poli­cies un­til they be­came sick, leav­ing in­sur­ers to cover only those peo­ple who needed treat­ment. Over time, pre­mi­ums would sky­rocket as a grow­ing num­ber of younger and health­ier peo­ple cut their costs by go­ing unin­sured.

Some other GOP pro­pos­als that are in­tended to be longer-term fixes strike a bet­ter bal­ance be­tween mak­ing it eas­ier for those who need care to get cov­er­age and per­suad­ing younger, health­ier peo­ple sign up. But they would still leave more peo­ple with­out in­sur­ance — and al­low in­sur­ers to re­sume the odi­ous prac­tice of cherry-pick­ing cus­tomers by with­hold­ing cov­er­age for costly con­di­tions. And the sub­si­dies are so low, they’d force low- and mod­er­ate-in­come con­sumers to carry less cov­er­age and pay more out of pocket.

There is an eat-your-veg­eta­bles as­pect to fix­ing the health­care sys­tem that Repub­li­cans don’t ac­knowl­edge. In or­der to make the changes that ev­ery­one wants, such as stop­ping in­sur­ers from shun­ning peo­ple with pre­ex­ist­ing con­di­tions, Congress also has to do things that are po­lit­i­cally dif­fi­cult. That in­cludes cre­at­ing penal­ties that dis­cour­age peo­ple from en­rolling in a plan only af­ter they need treat­ment. Sim­i­larly, hold­ing down health­care costs is hardly a pain-free ex­er­cise, given that it raises dif­fi­cult ques­tions about how medicine is prac­ticed and how the risk and cost of ill­ness and in­jury are spread.

Plans such as John­son’s will be moot if the Supreme Court rules against the King law­suit, as it should. Oth­er­wise, Repub­li­cans will be forced to come up with a Plan B, and what they’ve of­fered so far isn’t good enough.

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