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News March 2015

Washington Watch

Critical Health Care Decisions Now in the Hands of the Supremes along with Young Representatives and Some Octogenarians in the Senate

By Alan M. Schlein

This time the issue is about the authorization for tax subsidies for low and middle income folks. The lawsuit alleges that the government should not be providing subsidies to people who purchase coverage in the 36 states that have opted not to run their own health insurance marketplaces.

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Unlike their young House counterparts, seniors may find some sympathetic voices among the conservative Republicans in the Senate. That’s because six of the incoming Senate Republican chairmen are at least 80 years old already or will have their 80th birthday in the course of this 114th Congress.

For the second time in three years, the U.S. Supreme Court could determine the fate of the president’s health care law with a case coming up for oral arguments in March. While a limited number of seniors are covered under the health care law, a Court decision could have a big impact financially on your health care costs if the High Court rules the law unconstitutional.

With President Obama controlling the veto pen over Congress, lawmakers and the White House will continue their health care legislative standoff. Two years ago, the Supreme Court voted 5-4 in favor of the law. Now, the Court will hear a new challenge to the law, in the case of King v. Burwell. The fight is over whether the Obama administration is improperly providing tax credits to consumers who purchase health insurance through the federal exchanges.

When the Supreme Court upheld the Affordable Care Act last time, it was on a constitutional challenge to the individual mandate that you must have health insurance or pay a tax penalty. This time the issue is about the authorization for tax subsidies for low and middle income folks. The lawsuit alleges that the government should not be providing subsidies to people who purchase coverage in the 36 states that have opted not to run their own health insurance marketplaces.

Critics say the law explicitly allows subsidies in exchanges that are run by the states. In all the remaining states, the federal government has stepped in. But because of a typo that got into the final version of the law, it says states are the only ones that can provide subsidies. Those challenging the law say the subsidies shouldn’t be allowed for the states that didn’t set up exchanges.

The apparent ambiguity in the text of the law, the one specifying that subsidies are available "through an Exchange established by the State under [section] 1311 of the Patient Protection and Affordable Care Act," comes because Congress hasn’t been behaving like it usually does. Normally, after any major legislation is passed, lawmakers often find typos, and minor errors that need to be fixed and usually pass a corrective piece of legislation by unanimous consent. But because the Obamacare legislation was extremely partisan with Democrats pushing through the vote without a single Republican vote, no one dared to try and pass another bill correcting errors, typos and minor fixes. Congress was so divided at the time that even routine corrections would never have passed. So errors and typos in the Obamacare law became law.

Two U.S. appeals courts in July issued conflicting rulings on health-law subsidies, raising questions about the fate of tax credits provided to millions of Americans which the Supreme Court will have to resolve before it rules in June. The legal question will revolve around the actual writing of the law and Congressional intent when the law was written. Supporters of the law say the critics are focused on too narrow a reading of the intent of the lawmakers.

Why not ask the guys who wrote the bill, you wonder? Reporters have, and virtually everyone who was involved in the writing acknowledges that Congress intended to have the federal exchange allow subsidies as well as the states.

But the Supreme Court is not bound by what Congress intended at the time. That’s the power of the Court. While they can cloak things in upholding precedents, the Court can rule however it wants to. And if Congress doesn’t like it, they can rewrite the law – if they can get the legislation passed by both chambers and signed by the president.

Whatever the High Court rules, there are consequences. If the Court rules against the administration in King v. Burwell, more than 5 million people would lose their subsidies and far fewer people would be able to buy coverage on the insurance exchanges. Most of the payments insurers were planning to receive this year — about $32 billion, according to the Congressional Budget Office — would disappear as well.

This could have enormous implications that could upend the entire ACA. To understand what’s at stake, a Rand Corporation study last month explains just why the subsidy challenge is such a big deal. Of the 5.4 million people who signed up for health insurance on federal-run exchanges last year, 87 percent of them received subsidies. So if you wiped away those subsidies, Rand predicts that premiums would be 43.3 percent higher on average in the individual market, while enrollment – on and off the exchanges – would drop by 68 percent.

That means 11.3 million fewer Americans would have health insurance, according to the think tank’s analysis. The fallout would put more pressure on Medicaid and Medicare, which already provides health care to the vast majority of seniors. It could mean millions of Americans would see dramatic price increases in their insurance, causing many of them to drop out or be unable to afford health care insurance. That would likely undermine the individual insurance market altogether, leaving mostly sick people left to fund the program, which is not a financial model that can succeed.

 

Your Health and the New Players in Town

On the Congressional front, the Republican takeover of both houses means lawmakers must make a change in tactics – moving from opposing everything President Obama supports to actually governing and finding a way to pass legislation.

Leading Republican lawmakers have outlined an ambitious agenda with dismantling the president’s health care initiative as the GOP’s top goal. Completely repealing the measure will not happen with Obama in office, but Republicans are hoping to peel off enough Democratic votes in the Senate to override a certain veto from the White House.

Already in the 114th Congress, which started in January, the House Republicans have voted four times to totally repeal the health care law. The House has now voted more than 60 times to take down the law, in some form or another. The latest vote was largely a symbolic gesture to allow new House members who haven’t yet had a chance to vote in opposition to  – or in support of – the health care law.

Meanwhile, the November elections and the normal job-shuffling within the administration have changed the key players on health care issues that matter to seniors.  Congress finally approved Dr. Vivek Murthy to serve as U.S. Surgeon General – who does not set policy but is an advocate for the people’s health. The government has been without a Senate-confirmed Surgeon General since July 2013. Murthy, 37, a physician at Boston’s Brigham and Women’s Hospital and instructor at Harvard Medical School, won confirmation on a 51-43 vote. He is the son of immigrants from India and is a co-founder of Doctors for America.

But the big surprise was the sudden retirement of Marilyn Tavenner, as the head of Medicare. Tavenner, the administrator of the Centers for Medicare and Medicaid Services (CMS), was a nurse who rose to become a top executive at the hospital chain Healthcare Corporation of America and then became Virginia’s health secretary, before becoming the first Senate-confirmed CMS administrator since 2006. What made Tavenner particularly effective in this partisan gridlock environment was her unusually good relationship with Republicans in Congress. She supervised the troubled rollout of the federal insurance marketplace through several political minefields. She will be replaced, temporarily by Principal Deputy Administrator Andy Slavitt.

In the House of Representatives, the biggest change will be at the tax-writing Ways and Means Committee, where former Republican vice presidential nominee Paul Ryan, R-Wisc., takes over as chairman. Ryan as Budget Chairman last year got the House to approve his budget, which would have turned Medicare into a voucher program, gutted Medicaid for the poor and slashed discretionary spending to less than half of Reagan-era levels. Now he takes over the powerful tax writing committee.

Ryan is so stoked about his new committee assignment that he has already taken himself out of the running for the 2016 campaign for the White House. He leads a group of young conservatives taking over key committees in the House of Representatives who hope to pass bold conservative blueprints on core issues like health care and taxes, even if they’re doomed to face a presidential veto.

Another key chairman to pay attention to is Rep. Tom Price, R-Ga., who takes over for Ryan at the Budget Committee. Price, a former orthopedic surgeon who represents the suburbs of Atlanta, is a diehard Tea Party conservative. As Budget Chairman, he’s the key player in negotiations with the White House over all the entitlement programs, including Social Security and Medicare. Price has pledged to deliver a spending blueprint that builds on the austerity outlined by Ryan, with more dramatic cuts to Medicare, Medicaid and other safety-net programs.

The key question will be if the House Republicans let ideology control their agenda in health care fights with the Obama administration or if they will be open to finding middle ground in order to get legislation approved and signed by the president.

Things will be somewhat different in the new Republican-controlled Senate, where veteran lawmakers are more likely to demonstrate a belief that governing requires sometimes putting the possible ahead of the ideal.

Unlike their young House counterparts, seniors may find some sympathetic voices among the conservative Republicans in the Senate. That’s because six of the incoming Senate Republican chairmen are at least 80 years old already or will have their 80th birthday in the course of this 114th Congress.

Utah Senator Orrin Hatch takes over the Senate Finance Committee while Tennessee’s Lamar Alexander takes over the Health Education Labor and Pensions (HELP) Committee. Both Senators are long-time lawmakers who understand how to make deals and craft legislation.

Hatch has said that his top priorities are repealing the medical device tax, and making retirement reform a priority in the Senate. But Hatch is expected be to use his role as chairman to put every element of the Affordable Care Act under a microscope.

 

[Also contributing to this story were: Politico, the Hill, Bloomberg, the Washington Post, Fiscal
Times and the National Journal.]

Alan Schlein runs DeadlineOnline.com, an internet training and consulting firm. He is the author of the bestselling “Find It Online” books.

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