Healthcare system meltdown?

Published February 24, 2015

By Rob Schofield

by Rob Schofield, NC Policy Watch, February 24, 2015.

Thirty-five years ago, Hollywood made the American public aware of something called “The China Syndrome” – a vivid and terrifying descriptive term for the potentially devastating consequences of a runaway nuclear reactor. In 1986 at Chernobyl, Ukraine and again in 2011 at Fukushima, Japan, humans got a glimpse of what a nuclear “meltdown” is and how thin the margin can be between mere disaster and utter catastrophe.

A similar experience arguably occurred with respect to the American economy in 2008 and 2009 when, save for the flawed but still forceful interventions of the Bush and Obama administrations, the world economy could have experienced a cascading and calamitous meltdown rather than the awful, but ultimately survivable, devastation of the Great Recession.

The lesson of these and other such examples, of course, is that one needs to think carefully before unleashing powerful scientific and societal forces (the Iraq War comes to mind) and to thoroughly consider potential consequences of national law and policy decisions.

A potentially disastrous spark

Let’s hope fervently that a majority of the United States Supreme Court is on this wavelength of care and caution in the coming days and weeks as it considers the latest ideologically-driven challenge to the Affordable Care Act (aka Obamacare).

Next Wednesday, the Court will hear oral arguments in the case of King v. Burwell in which a collection of conservative plaintiffs are seeking to have one of the cornerstone components of the law declared illegal. Click here to read some of the stories of those who would be affected, including a small business owner from North Carolina named Rachel.

According to the plaintiffs and their defenders, the law is being implemented illegally in states like North Carolina because of a handful of words in a clumsily and hastily constructed sentence buried in the 900-plus page bill.

They claim, in effect, that unless each individual state affirmatively opts into the law by enacting a state-level health care exchange wherein consumers can shop for insurance and receive tax credit subsidies to help them pay the premiums, the residents of those states are not eligible to participate.

As Associated Press reported yesterday:

“The lawsuit focuses on the health insurance marketplaces, or exchanges, that have been set up to allow people to find coverage if they don’t get insurance through their jobs or the government. The challengers argue that the health law provides subsidies only to people who get their insurance through an exchange ‘established by the state.’ But most states have not established their own marketplaces and instead rely on the federal healthcare.gov.”

In other words, notwithstanding hundreds of other pages of contradictory language, a voluminous legislative history and the plain intent of the authors and sponsors of the legislation, the ACA should, as a practical matter, be tossed out the window because of what amounts to a typo.

This is from an excellent explanation at the website explaining what’s at stake in the case developed by the Center for American Progress called “Hear the Nine”:

“The law has many parts, but there are three main components at its core: (1) banning insurance companies from denying coverage because of a pre-existing condition; (2) requiring everyone to take personal responsibility by getting covered; and, (3) providing tax credits to make coverage affordable.

What’s at stake in this case, then, is whether one of the three pillars of the law can continue in the roughly three dozen of states using the federal marketplaces. As of January 2015, 87 percent of people enrolled in the federal marketplaces received a tax credit.”

A healthcare “China Syndrome”

As with a nuclear meltdown, the immediate consequences of the demise of the ACA would be disastrous. According to an article authored by Supreme Court expert Ian Millhiser of the Center for American Progress:

“If a lawsuit seeking to gut the Affordable Care Act succeeds in the Supreme Court, enrollment in plans purchased through the law’s health exchanges would decline by 9.6 million people and unsubsidized premiums in this market would spike by 47 percent in the states impacted by the ruling, according to a study released last week by the RAND Corporation. Although a footnote to the study explains that 1.6 million of these individuals would be able to find coverage through some other source, that still leaves 8 million people without health insurance.

RAND’s conclusions are largely corroborated by an Urban Institute study, also released last week, which concludes that “a victory for the plaintiff would increase the number of uninsured by 8.2 million people” and that “average nongroup premiums in 34 states would increase by 35 percent, affecting those purchasing inside and outside those Marketplaces.”

Based on the latest enrollment numbers this would include 560,000 North Carolinians who would face the immediate loss of their subsidies.

Even John Locke Foundation health analyst Katherine Restrepo warned last month in Forbes magazine that:

“Outrage would also ensue. No subsidies means that millions of citizens would be exposed to the full cost of Obamacare health insurance premiums….Regardless of the justices’ ruling, it is paramount that North Carolina lawmakers warn citizens of the potential consequences this lawsuit brings.”

As with the nuclear variety, such immediate impacts of a healthcare system meltdown might just be the beginning of our problems. As veteran NPR health reporter Julie Rovner explained last fall:

“Legal scholars say a decision like that would deal a potentially lethal blow to the law because it would undermine the government-run insurance marketplaces that are its backbone, as well as the mandate requiring most Americans to carry coverage.

Indeed, the insurance industry argued in a legal brief for a related case that elimination of the federal exchange subsidies could seriously undermine those markets, creating an insurance death spiral.

‘A sicker pool of consumers results in higher premiums, which causes an additional relatively healthy subset of participants to drop out, which in turn results in a further increase in premiums,’ the group’s trade group, America’s Health Insurance Plans, said in its brief.

Eliminating subsidies also would undermine the so-called employer mandate that seeks to require larger firms to provide coverage. That’s because it requires employers to pay a fine if their employees obtain subsidies on the exchange. If there are no subsidies, there are no employer fines and thus effectively, no mandate.”

But wait, it gets worse. As Ian Millhiser notes in this article, by the logic of such a Supreme Court ruling, more than five million poor children covered by the federal Children’s Health Insurance Program (CHIP) – a program that long predates the ACA — would also face loss of their insurance.

After that, who knows what’s next? What happens to the insurance giants who suddenly find themselves without millions of customers? What happens to the hospitals, doctors and other health care providers who suddenly experience a sharp drop in clients? What happens to the national economy in which health expenditures amount to roughly 18% of gross domestic product?

Other commentators have also noted the potentially enormous impact that such a decision would have on the very “principle of separation of powers and the Supreme Court’s institutional legitimacy and credibility.”

Put simply: If the Court rules the wrong way in King v. Burwell, not only will millions suddenly find themselves uninsured, but the very stability of the national health insurance system (and even our current understanding of the justice system) could well be threatened. As with a runaway nuclear reactor, thousands will surely die prematurely in the near term and where things will stop and how long the effects will be felt is anyone’s guess.

Let’s hope the Supreme Court opts not to set such a chain reaction in motion.

- See more at: http://www.ncpolicywatch.com/2015/02/24/healthcare-system-meltdown/#sthash.Jrto0Fp4.dpuf

February 24, 2015 at 9:10 am
Frank Burns says:

The courts will be doing us all a big favor by their ruling. We all know that there is nothing affordable with the "Affordable Health Care Act". Very simply it was a poorly crafted law built on lies (remember Jonathan Gruber?) The Democrats crafted the law with no GOP input, so they own the failure of it. Now with a GOP majority, perhaps we can craft a completely new law and save Obama the embarrassment by saying the courts made a bad ruling or something. Blame shifting is one thing that Obama is skilled at.

February 24, 2015 at 9:44 am
Richard Bunce says:

Here is my out of the box prediction. USSC will find the language is clear that policies purchased in the Federally established State exchanges are not eligible for the premium tax credit. They will then rule that this language violates some equal protection provision in the Constitution and strike that language from the law allowing premium tax credits to apply to all Marketplace policies.

February 24, 2015 at 10:53 am
Norm Kelly says:

A post from a socialist who works for a socialist organization? Worth reading?

The law says that the 'exchange' must be set up by THE STATE in order for people to qualify for subsidies. One of the architects specifically stated that this wording was put into the law on purpose, as a bribe to the states to setup their own 'exchange' and not depend on the central planners. The architect has specifically stated that the central planners DIDN'T want to be in the health insurance business and the way to get states to do it on their own was to bribe them into it by making sure any state that didn't participate would prevent their citizens from receiving subsidies. Who better to tell us what the intent was than one of the architects. And he said this on video, so anyone, even left-wing zealots, can go back to review it. I know that if it's available to me, a lowly home user/reader, then it's certainly available to editorial writers. Even those editorial writers who choose to ignore the truth actually have access to it. But since the truth doesn't support the left-wing zealot agenda, they do CHOOSE to ignore it and hope and pray that you choose to accept their ignoring it and don't do your own research to determine that you are being LIED to.

Then again, there's the left-wing zealot's tendency to want to ignore the law. These left-wing zealots want to be able to pick & choose what words in THE LAW matter and which ones don't. When ANY conservative or RINO wants to pick and choose what words mean, left-wing zealots go absolutely nuts and their media allies simply go along with their rage. How do we know the average media type is an ally of the left-wing zealots and demon party? By watching what they react to and what they don't. When the CHOOSE to not react to demons who want to violate the law that ONLY THEY VOTED FOR, we know the media types are allies of demons and not actually news people! Remember when Nancy told us we'd have to pass the bill to know what was in it? Well, she did, even if her allies choose to forget this one too! Check this out: 'a handful of words in a clumsily and hastily constructed sentence buried in the 900-plus page bill'. A handful of words written INTO LAW, passed only by DEMONCRAT POLITICIANS, and singed into LAW by the unqualified community organizer occupant. It's THE LAW that these left-wing zealots believe we should IGNORE! Then again, the excuse is that the bill was constructed in a 'clumsy and hasty' manner. Really!? This is supposed to make me feel better about it? The central planners craft a bill to take over approximately 1/6th of the entire US economy, completely interfere with the relationship between my doctor and myself, and I'm supposed to be OK with it being clumsy & hasty? The only ones who accept this as meaningful, useful, or explanatory are left-wing zealot allies of socialist democrat politicians who are hell-bent on socializing as much of the US as possible. Remember, it was the demon politicians who floated the idea of the central planners taking over the oil/gas business. Not just regulate more. But a complete take-over of these private businesses. Remember it's also demon pols who say that it takes a village to raise a child, the child is the responsibility of government, and it's not private business that creates jobs. This IS SOCIALISM! The demon party and their media allies are implementing socialism and telling those of us who object that we are silly to worry or even question the wording of the laws THEY PASS. When these same pols and their allies want to violate THEIR LAWS, we are supposed to sit down, shut up, and accept what they choose to do. Regardless of how it affects us, our families, our future, it's their way, even if they violate the law!

Common sense has completely escaped left-wing zealots. But it's worse than that. It's not just common sense that left-wing zealots lack. It's the ability to tell the truth. It's the ability to think logically. It's the desire for the masses that they rule to also refuse to think logically or expect the truth.

Have I read the entire post from this left-wing zealot? Of course not! One can only accept so much garbage before stopping. It's like banging your head against the wall: eventually a headache results. Stopping is the only cure. It's like listening to the occupier speak. A complete waste of time cuz he's gonna do what he wants regardless of what he's said or how it violates the Constitution or law! If the left-wing author bothered with the truth, the whole story, or wondered why one of the architects TOLD US the bribe was put in on purpose, then perhaps it would be worth reading the entire post. But since the point is to perpetuate the lie, perpetuate demons violating their OWN LAW, then the post is pointless. Just another left-wing zealot who feels comfortable telling lies.