Supreme Court Can't Save Obamacare
After Wednesday's oral argument at the U.S. Supreme Court, the odds that Obamacare will survive its latest legal challenge appear slightly better than even. But instead of relief, the law's supporters should take a moment to reflect on the deeper problem for the Affordable Care Act: its persistent and widespread unpopularity. Reversing that will do more to protect the law than any court decision.
A Pew Research Center poll last month reported that almost five years after it was signed, 53 percent of people disapprove of Obamacare -- close to an all-time high. That reflects more than just partisanship; even independents dislike the law by almost 2 to 1.
That's a bigger problem than Obamacare's supporters seem to realize. Liberals' hope is that if the law can just survive this legal challenge and succeed on the merits -- insuring more people at a reasonable cost -- it will eventually gain acceptance, or at least benign indifference. By that view, the low level of public support for the law is either minimally important or beyond fixing.
But if Democrats don’t find a way to address the public distaste, Obamacare will stay vulnerable to the next ploy that comes along to undercut it. The disapproval fuels not just the court challenges but also the obstructionism of Republican executives and lawmakers that makes those challenges so potent. After all, if every state were willing to establish its own exchange, the court's ruling on King v. Burwell would be moot.
To which Obamacare's supporters might ask, what do you expect us to do? The Barack Obama administration couldn’t do more to trumpet the number of people who are getting coverage through the law's exchanges. If you want to know how many Colorado residents signed up for a silver plan for 2015, the Department of Health and Human Services can't wait to tell you.
By focusing on the expansion in coverage, however, the law's defenders are fighting the wrong argument. The opposition doesn't center on the notion that the government shouldn't be trying to cover more people. It revolves around two other claims, neither of which Democrats have done a good job dealing with. And both of those arguments are mostly bogus.
First is the idea that Obamacare imposes mandates on insurance that needlessly drive up the cost of coverage and restrict choice, a core Republican argument. "Republicans understand that what works in Utah is different from what works in Tennessee or Wyoming," a trio of Republican senators wrote Sunday in the Washington Post. Under their alternative, "every state would have the ability to create better markets suited to the needs of their citizens."
What Republicans are arguing against is the law's requirement that insurance cover 10 types of care: outpatient care, emergency room visits, hospitalization, prescription drugs, laboratory services, preventive care, rehabilitative care, pediatric care, maternity care, and mental health and addiction treatment. Which of those is unnecessary in Utah?
Republicans are really saying that people should be free to avoid carrying insurance for problems they don't expect to have (a bout of depression, maybe, or a stroke that requires rehabilitation) or don't want to help pay for (pediatric and maternity care for men with no children, say). The former view shifts costs onto the unlucky; the latter shifts costs onto women and parents. Both undercut the purpose of insurance, which is pooling risk. Neither saves money. Yet in the abstract the argument sounds compelling. And it's going mostly unchallenged.
A second reason Obamacare remains unpopular is that many people who get coverage through their job (still slightly more than half the country) believe the law is causing their employer to cut benefits. Because that's often what their employer is telling them.
In a survey last fall by the consulting firm Towers Watson, more than half of large companies said they expect to pay the so-called Cadillac tax, which falls on high-value insurance plans, by 2020 if they don't cut costs. And two-thirds of large companies said the tax will have a moderate to large influence on their health-care strategy, driving them to cut coverage for family members, reduce provider networks, limit benefits and restrict drug coverage. No wonder more people told Pew that the law hurt them and their families than said it helped.
The problem is that only a fraction of companies that say they would face the Cadillac tax by 2020 are in fact likely to do so. Starting in 2018, the tax will apply to plans that cost at least $10,200 for an individual or $27,500 for a family. Yet in 2014, less than 4 percent of covered workers with individual coverage were in plans that cost that much, and less than 6 percent of those on family plans. And even if those costs grew at 5 percent a year -- about double the growth from 2013 to 2014 -- the share of covered workers on plans that trigger the Cadillac tax in 2020 would still be less than 1 in 5.
So employers are citing an Obamacare tax that probably won't affect them for years to justify benefit cuts now. Meanwhile, Republicans are claiming that the law's insurance mandates are making coverage more expensive, when all it's doing is pooling the cost of that coverage across more people (which is why medical debt troubles are down). Those are both compelling arguments. Yet Democrats have focused on touting the number of people who have gained coverage -- which is important, but doesn't feel as personal to most Americans.
Of course, anybody can criticize Democrats for not doing enough to sell Obamacare. And you can probably point to more arguments that the law's opponents cite to undercut it, and which the administration has done a lousy job rebutting.
The broader point remains that even if the most optimistic interpretations of Wednesday's argument are true, liberals can't count on the Supreme Court to save Obamacare. Sure, it would be nice if the justices uphold the tax credits for every state. But King v. Burwell is a symptom of a bigger problem, one that no ruling will fix. Ultimately, the only way to protect Obamacare is to convince more people that it's a good law. On that count, the government is still failing.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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Christopher Flavelle at firstname.lastname@example.org
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