November 1, 2014

The Supreme Court’s Health Care Decision

  • The American health care system is a patchwork of public and private programs that serve citizens in different ways, depending on their age, military...

The Supreme Court’s decision last week to largely uphold the 2010 Affordable Care Act cleared the way for a dramatic expansion in the number of Americans with health insurance coverage. But while the law includes some measures designed to curb rising health care costs, much more remains to be done.

“Despite the partisan rhetorical exchanges over today’s ruling, the fundamental fact remains that policymakers still have a lot to do to put rising health care costs onto a sustainable track,” Concord Coalition Executive Director Robert L. Bixby said Thursday.  “Those rising costs, together with the aging population, are putting tremendous pressure on private companies and government at all levels in the United States, and especially the federal government.”

The case focused largely on the law’s “individual mandate” that will require people to buy health insurance, a provision designed to prevent some people from gaming the system by waiting until they are sick or injured to pay for coverage. Chief Justice John G. Roberts Jr. surprised observers across the political spectrum by joining the court’s more liberal justices in a 5-4 ruling that the individual mandate was a constitutional use of federal taxing authority.

At the same time, however, the high court restricted the federal government’s ability under the new law to push states to expand Medicaid programs. While Washington can tie new federal assistance to Medicaid expansion, the court said, the federal government cannot threaten states that do not want to participate in such an expansion with the loss of existing aid.

The fiscal effects of this part of the decision remain to be seen. It could result in lower spending if states opt out of covering new individuals through Medicaid. On the other hand, it might lead to higher spending because some of those not covered through Medicaid could be eligible for subsidized insurance in the exchanges, which would be more costly. The Congressional Budget Office is expected to weigh in with an analysis soon.