Welcome to Health Reform Watch, Jason Millman's regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Jason with questions, comments and suggestions here. Check back every Tuesday and Thursday afternoon for the latest edition, or sign up here to receive it straight from your inbox. Read previous columns here.
A federal appeals court just dealt Obamacare its biggest legal defeat in more than four years. Potentially bigger than the Supreme Court's 2012 ruling that the Medicaid expansion isn't mandatory, and more consequential than last month's Hobby Lobby decision finding that religious owners of closely held businesses don't have to provide contraception coverage to employees.
The D.C. appellate court ruling in Halbig v. Burwell, that the federal government isn't authorized to administer insurance subsidies in the 36 states that refused to set up their own health insurance exchanges, is a major blow to the key feature that makes coverage affordable. Of the 5.4 million people who signed up for coverage in the 36 states with a federal exchange, 87 percent of them received federal subsidies to purchase insurance, according to the Obama administration. Those discounts, on average, meant those customers are paying about one-fourth of their actual premium, the Department of Health and Human Services reported.
The consulting firm Avalere Health calculated that those states by 2016 would forfeit about $36 billion in federal subsidies to purchase insurance. The impact would be much larger in some states — Mississippi, one of the poorest states, saw 94 percent of exchange enrollees qualify for subsidies. On average, premiums in these federal exchange states would increase 76 percent as a result of this decision, Avalere said.
The Halbig case hinged on whether the federal government actually has authority to offer the federal subsidies in these federal exchange states. Opponents of the law said the statute clearly said only an exchange established by the state could offer the payments — further, that was an intentional design of the law's drafters to encourage states to set up their own insurance marketplaces. The administration argued an entire reading of the law proves that the Affordable Care Act makes subsidies available in every state, and that's what Congress always intended.
The court's opinion nodded to just how big its decision is:
We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still.
There's no guarantee, though, that today's court ruling holds up. The administration could request the entire appeals court to review the case. Another federal appeals court, thought to be more friendly to the administration's side, is still expected to rule on a similar challenge. Two district courts are also weighing subsidy challenges.
The ruling won't actually go into effect until the court fully considers the administration's request for an entire court review. Today's decision, though, is sure to be making those supporting and overseeing the law pretty nervous.
Top health policy reads from around the Web:
Doctors are fed-up with certification requirements. "The medical community is embroiled in a bitter debate about what board-certified physicians should be required to do to prove that their knowledge and skills are up-to-date. Besides holding a state medical license, about 75% of U.S. doctors are certified by 24 privately run boards, signifying that they have mastered their area of specialty, in fields ranging from internal medicine to orthopedics. The specialty boards require their physicians to pass rigorous exams, generally every 10 years, to stay certified. In recent years, those boards also have begun requiring doctors to enroll in official Maintenance of Certification programs in between exams to show they are committed to lifelong learning and quality improvement." Melinda Beck in the Wall Street Journal.
A cancer patient's choice: health insurance or marriage? "Health-care incentives dictate a lot of Americans’ decisions today. Some people cling to jobs they hate to keep their families covered; others work less than they could just to keep government coverage. The Affordable Care Act is only beginning to scramble those incentives and push them into more intimate choices. That includes where people live — and maybe even whom they love, and how." Danielle Paquette in the Washington Post.
Another Obamacare lawsuit gets tossed. "A federal judge said Monday that Sen. Ron Johnson (R-Wis.) cannot challenge the Obamacare policy that lawmakers and their staff obtain health insurance through the exchanges. The ruling could prove ominous for House Republicans as they prepare to file suit against the Obama administration, also against Obamacare. That suit would focus on a different issue, the president’s delay of the employer mandate. ... [The judge] said that the Wisconsin Republican cannot prove he is injured by the policy." Jennifer Haberkorn in Politico.