Health Care Blog

From a Small Business in Oregon: Health Care Law Helps

Jim Houser and his wife have owned an auto business for nearly 30 years and have always provided health care for their employees.  In recent years, their premiums have been steadily increasing to “unsustainable” levels.  However, thanks to the Affordable Care Act, their business is now eligible for the small business tax credit.  Thanks to the Affordable Care Act, up to 4 million small businesses may be eligible this year for tax credits, making it easier for them to provide coverage for their workers. In 2014, a new health care marketplace will ensure American businesses quality, affordable health care coverage options.

“It’s things like health care and other benefits which keep employees loyal, that keep these highly trained employees with you and so the health care act is going to have the additional benefit of helping your business because your now going to be able to now offer the kind of support that is going to keep valuable employees with your company.”

Jim shared his story as part of the 50 Stories/50 States project.  Check out the map to hear Jim’s full story and find additional stories from people near you.
 

Today’s Ruling in Florida

Since the enactment of health reform legislation in March, Republican Attorneys General in several states have filed lawsuits challenging the constitutionality of the Affordable Care Act.  Having failed in the legislative arena, opponents of reform are now turning to the courts in an attempt to overturn the work of the democratically elected branches of government.  This is nothing new.   We saw this with the Social Security Act, the Civil Rights Act, and the Voting Rights Act – constitutional challenges were brought to all three of these monumental pieces of legislation, and all of those challenges failed.   So too will the challenge to health reform.

Today, a judge in Florida dismissed four of the six claims in the Attorneys General suit, and issued a procedural ruling allowing two claims to move forward.   As the judge noted in his opinion, today’s ruling was not a decision on the merits of the constitutional claims in the case.   Such a ruling will come only after the judge has had the “benefit of additional argument and all evidence in the record that may bear on the outstanding issues.”

However, last week Judge George Caram Steeh of the U.S. District Court for the Eastern District of Michigan did rule on the merits when he dismissed a constitutional challenge to the Affordable Care Act.  In his ruling on the constitutionality of having everyone who can afford to carry minimum health coverage, Judge Steeh, stated:

“The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments, and to taxpayers. . . .   These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers, and the insured population who ultimately pay for the care provided to those who go without insurance.”

The Michigan decision reinforces 70 years of Supreme Court precedent by concluding that the Affordable Care Act falls well within Congress’ power to regulate under the Commerce Clause.  It reaffirms precedents that, in the words of Chief Justice Roberts, are designed to preserve the “judiciary’s proper role in our system of government” and to ensure that our courts do not become forums for political debates.  

There were two important points in the Judge’s ruling.  

First, the judge rejects the plaintiff’s claim that the Affordable Care Act is an unprecedented exercise of the commerce power to regulate “inactivity.” People who make an economic decision to forego health insurance do not opt out of the health care market, but instead shift their costs to others when they become ill or are involved in an accident and cannot pay. 

“No one can guarantee his or her health, or ensure that he or she will never participate in the health care market.   Indeed, the opposite is nearly always true.   The question is how participants in the health care market pay for medical expenses – through insurance, or through an attempt to pay out of pocket with a backstop of uncompensated care funded by third parties.   This phenomenon of cost-shifting is what makes the health care market unique.   Far from ‘inactivity,’ by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants.   As this cost-shifting is exactly what the Health Care Reform Act was enacted to address, there is no need for metaphysical gymnastics.” 

Second, the judge points out that the landmark insurance market protections, including banning insurers from denying coverage to individuals with pre-existing conditions, can only be effective if everyone is part of the system.   He states that “[w]ithout the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times.   As a result, the most costly individuals would be in the insurance system and the least costly would be outside it.   In turn, this would aggravate current problems with cost shifting and lead to even higher premiums.”

Repealing the minimum coverage provision of the Affordable Care Act would have devastating consequences for millions of Americans: 

• Because we do not leave people to die at the emergency room door –spending on uncompensated care would be $43 billion or higher.  According to a recent study, this cost-shift added on average $1,100 to family premiums in 2009 and roughly $410 to an individual premium.
• 39 million people would be uninsured, 16 million more than would be uninsured if the provision remains law.
• According to the Congressional Budget Office, average premiums would rise by 15 to 20 percent.  

Now that this preliminary stage has ended, the government fully expects to prevail on the merits.   As President Reagan’s Solicitor General Charles Fried recently wrote, “the health care law’s enemies have no ally in the Constitution.”
 

Stephanie Cutter is Assistant to the President for Special Projects