In a ruling brought down June 25, the Supreme Court of the United States (SCOTUS) in a 6-3 decision upheld one of the central parts of President Barack Obama’s Affordable Care Act (ACA), also known as ObamaCare—subsidies.
Those in opposition to the ACA had argued that the federal government should not be allowed to continue providing subsidies to individuals living in states without their own health insurance exchanges.
The ruling by SCOTUS affirms that ACA can authorize federal tax credits for eligible Americans living, not only in states with their own exchanges, but also in the 34 states with federal marketplaces, according to a report by CNN.
The income-based subsidies or tax credits were imperative to the success of ACA, allowing health insurance to be more affordable and therefore accessible to more people. Ending subsidies for individuals in the 34 states that rely on exchanges run by the federal government would have dealt a potentially lethal blow to the law. Had the ruling gone in the other direction, it would have cut off subsidies to 6.4 million Americans, requiring a congressional fix or immediate action by the states.
“Five years ago, after nearly a century of talk, decades of trying, a year of bipartisan debate, we finally declared that in America, health care is not a privilege for a few but a right for all,” Obama said in a statement at the White House. “The Affordable Care Act is here to stay.”
Steve Vladeck, a law professor at American University told CNN that the decision means the next President can’t just undo federal exchanges. Congress would have to pass a bill and a president would need to sign it to thwart the ACA now.
Neil Trautwein, vice president of Health Care Policy for the National Retail Federation (NRF) told Convenience Store Decisions that the ruling was “a mixed bag,” and depending on the size of your business might impact you differently.
“On one hand, if you were a large employer (with more than 50 full-time employees), that would have knocked out your employer mandate liability in those 34 states, which would have been a good thing,” Trautwein said. In 2014, the Obama administration delayed the employer mandate until 2016 for companies with 50-99 workers. Employers with fewer than 50 workers have always been exempt from the mandate.
“On the other hand, chains that size or smaller need to worry about the purchasing power of their customers. That purchasing power would have suffered for those who lost their subsidies. So in the balance, I can’t quite say it’s a wash. The ACA seems to have more lives than any given cat out there,” he noted.
Conservatives worried that a ruling by SCOTUS in favor of the ACA in this matter would further solidify the law, making it harder to overturn.
Trautwein noted that while the fight against ACA continues, the focus is now on details of the law.
“During the current administration, we’ve had to focus smaller and on key liabilities under the law. We’re focusing on things like the definition of a full workweek, which needs to be 40 hours instead of ACA’s 30 hours; reporting requirements that couldn’t be more of a mess; the ‘Cadillac Tax’ (a 40% non-deductible excise tax on employer-sponsored health coverage that provides high-cost benefits) that is going to tax high dollar plans and increasingly drip down to middle class plans very quickly,” Trautwein said.
In other words, there are numerous specific problems, short of a full repeal that can be tackled despite the SCOTUS ruling, which NRF and other organizations will continue to fight on now that the subsidies have been upheld.
“In the short term what this really means for us is we’re going to redouble our efforts, focus on our priorities and it may take a future President and a future Congress to work together to change the law or repeal it, but we think there is room and bipartisan support for a lot of these smaller fixes and that is where we are going to put our efforts in the interim,” Trautwein said.
Healthcare A Necessary Evil?
Tony Huppert, CEO of Team Oil Inc. and the Team Oil Travel Center in Spring Valley, Wis., and a retail blogger for Convenience Store Decisions, has previously noted that we might all be better off if we spent less time fighting the healthcare mandate in its entirety and more time looking to improve the law.
“The Affordable Healthcare Act has a lot of positive as well as negatives….but, our health care system couldn’t continue on the way we were going,” Huppert told CSD following the ruling. He noted that despite the numerous problems with the law, it does also offer benefits. He pointed out that ACA allows people with pre-existing conditions to still acquire insurance and has helped make insurance affordable for many people. “Farmer friends of mine, (their) insurance dropped from $2,500 a month down to less than a $1,000 a month,” Huppert pointed out.
“The necessities in life are part of belonging to a society. Healthcare is one of them,” he said.
It remains to be seen, however, if bipartisan support can, in fact, change sections of the law, to make it less of a hardship for employers to comply with the expensive mandates, now that the ACA appears to be here to stay—at least for now.