The Supreme Court could improve American health care by striking down federal subsidies offered through HealthCare.gov -- the federal exchange that sells insurance in states without government-run marketplaces.
Most Americans never wanted the Affordable Care Act. A recent Gallup poll found 56% disapprove of the law, and more than 30 states have either failed to set up exchanges or failed to establish fully workable websites.
The Competitive Enterprise Institute, which recruited four Virginia residents to bring suit, argues the Obama administration cannot offer subsidies through the federal exchange, because the specific wording of the ACA provides for subsidies only through state exchanges.
If the Supreme Court concurs, millions of Americans will either have to pay full price for health insurance or lose their coverage. However, private citizens would no longer face penalties if they failed to purchase insurance, and businesses with more than 50 employees would no longer be required to provide coverage.
The entire ACA-inspired health care reform would be upended -- but it needs to be.
The law has not kept its promises -- some cynically made -- and has created enormous burdens on the economy.
Americans who already had coverage were promised they could keep the health insurance plans they like, but millions lost serviceable policies that were declared illegal or made impractical for insurance companies to continue offering. Without the ACA's subsidies and its rules, insurance companies would have a strong incentive to reintroduce those or similar policies.
ACA was supposed to lower costs. Yet economist and ACA architect Jonathan Gruber has acknowledged the administration was warned the law was thin on cost containment.
In many jurisdictions, the number of insurance companies offering ACA-approved insurance plans fell so low that informal monopolies formed with local hospitals that are pushing costs up rather than reducing them. Moreover, many of the health insurance plans Americans could afford through the federal exchange have deductibles and copays so high as to render them useless.
In the 28 states that have adopted ACA extensions of Medicaid, many able-bodied men are jobless and not seeking employment in part because that program gives them free health insurance. Millions of men between the ages of 25 and 65 are on the sidelines, collecting other government largess, not paying taxes, and imposing enormous costs on the economy.
Obama is using the ACA to offer businesses a $3,000 subsidy to hire immigrants. Those granted work permits under his temporary amnesty program are not eligible for ACA subsidies, and businesses are not compelled to either offer them health insurance or pay a penalty, as is the case for U.S.-born workers.
The ACA intrudes unconscionably on privacy and imposes terrible bureaucratic burdens. The Internal Revenue Service now tracks the health insurance decisions of every citizen and business, and forms for decisions are mind-numbingly long for items such as a taxpayer request for a waiver from the individual mandate.
Democrats rammed the ACA through Congress without significant Republican input or support, and Obama refuses to consider meaningful fixes and alternatives. A Supreme Court decision affirming the CEI position would force both sides to comprise, lest they face the wrath of voters who would otherwise lose federal assistance for purchasing health care altogether.
Sen. Richard Burr (R, N.C.), Sen. Orrin Hatch (R, Utah) and Rep. Fred Upton (R, Mich.) have proposed keeping parts of the ACA, but junking the individual mandate, and instead offering tax credits to low income individuals and block grants to states to craft reasonable Medicaid programs for those who can't afford health insurance.
No doubt, states would not offer free health care to just anyone who decides not to work. Rather, because they are closer to the real challenges of providing affordable health care coverage -- and because they would be limited in what they could spend -- states would craft solutions that genuinely contained costs, instead of encouraging monopolies and open-ended, unrestrained subsidies to health insurance executives and hospitals.
Peter Morici is an economist and professor at the University of Maryland, and a national columnist. He tweets @pmorici1.