Now that Indiana and 19 other states have won a lawsuit against the Affordable Care Act, what’s next for healthcare in America?
On Dec. 14, 2018, a federal judge ruled that the ACA, also known as Obamacare, is unconstitutional. Although appeals are coming, this decision will stand if the Constitution is truly the measure used by higher courts. Obamacare’s individual mandate — its requirement that everyone purchase insurance — is unconstitutional because Congress lacks authority to require Americans to purchase a good or service such as health insurance.
The ACA survived a 2012 challenge to its constitutionality only because the U.S. Supreme Court found that the financial penalty for failure to purchase insurance amounted to a “tax” that Congress had the power to levy. In 2017, however, Congress eliminated the individual mandate’s financial penalty. Without this “tax” any longer in effect, the individual mandate lost the constitutional leg on which it stood.
This law’s obvious incompatibility with the Constitution was the reason my office chose to challenge it. From the beginning, the Affordable Care Act amounted to federal overreach. Congress should never have imposed the one-size-fits-all mandate in the first place. Choice, freedom, and the roles of the individual states must remain part of the healthcare equation in America.
Beyond violating the Constitution, the ACA also has failed on a practical level to achieve its stated aims. It has narrowed people’s healthcare options and driven up costs.
Most ACA provisions took effect in 2014. In January 2018, the Heritage Foundation reported that insurer participation in the ACA had declined for three straight years. In more than half of all U.S. counties, only one company was available through the ACA exchanges, leaving participants no choice among insurers at all.
Costs have increased under the ACA as well. “Premiums for individual coverage more than doubled between 2013 and 2017,” according to Heritage, “and rates rose again in 2018.”
At this point, Americans now must engage with the question of where U.S. policymakers should go from here. Congress, the Trump administration, and the 50 state legislatures all have important parts to play. Everyone supports the idea that all Americans — not just the 85 to 90 percent covered by their employers, Medicare or Medicaid — should have access to quality healthcare that they can afford. So, while remaining true to the Constitution, how might Congress and the individual states develop sound policies that safeguard the healthcare needs of all individuals, including those with pre-existing conditions?
To answer this question, we should consider several innovative reform efforts by both the federal and state governments. At the federal level, several of the most encouraging reforms have occurred through regulatory rulemaking authority exercised by the Trump administration, enabling many Americans to save money and receive better healthcare.
In June, the U.S. Department of Labor implemented a rule that allowed more small businesses to participate in association health plans, or AHPs. By forming these associations, businesses with fewer than 50 employees may bargain much more effectively for insurance. Through AHPs, they can purchase insurance through the large-group market rather than the much more expensive small-group market. The Congressional Budget Office has forecast that 4 million Americans — including 400,000 who are currently uninsured — will now enroll in AHPs to obtain insurance as a result of the new rule.
In October, the U.S. Department of the Treasury and U.S. Department of Health and Human Services passed a rule enabling employers to sponsor health reimbursement accounts to fund employees’ purchase of individual health insurance on a tax-free basis. The Treasury Department projects that as many as 800,000 employers, given this opportunity, are now likely to sponsor HRAs. In this way, these businesses collectively could fund the individual coverage of as many as 10 million employees. Small- and medium-sized businesses, once again, stand to benefit most from this policy.
Across the nation, meanwhile, individual states are also taking their own steps to increase the number of people covered by health insurance. You need look no further than Indiana.
A waiver from the federal government allows Indiana to opt out of certain Medicaid state plan requirements in order to operate the Healthy Indiana Plan. This consumer-driven program provides health insurance coverage for adults with incomes up to 133 percent of the federal poverty level. The Healthy Indiana Plan serves the state well, providing quality healthcare at low cost to several hundred thousand Hoosiers.
Nationwide, other states are creating programs uniquely designed to best serve the needs of their own residents — such as risk-mitigation programs. This approach pools individuals with certain medical conditions into their own groups and then, with waivers from the U.S. government, applies federal funding (in addition to state monies) to pay for these individuals’ medical claims. Alaska was the first state to take this path, and six others have followed suit.
In short, our state and federal governments have plenty of options on the horizon. Looking ahead, one can only hope that Congress will loosen the conditions and restrictions that currently limit states from formulating their own healthcare solutions to the fullest extent possible.
As a country, we have the ability to create and sustain constitutional policies enabling all Americans to have access to insurance coverage that promotes affordability, choice, freedom, and quality healthcare.
It’s time for Congress to work with the states to make this happen.
Curtis Hill is Indiana’s attorney general.