Obamacare overview

The Patient Protection and Affordable Care Act, commonly known as Obamacare, was passed in its finality on March 21, 2010, and signed into law by President Barack Obama on March 23, 2010.^[1]

Law overview

The aim of the law was to provide an expansion of health insurance coverage to more Americans through both individual health insurance marketplaces as well as through employer-provided plans. Minimum requirements of coverage were established and both individual and employer mandates, enforced by tax penalties, were established over a period of years in order to achieve the goal of expanded coverage. Subsidies and tax credits are provided to individual consumers based on income level and dependents, and existing programs such as Medicaid and the Children's Health Insurance Program (CHIP) were expanded to increase reach. Small businesses were given tax credits based on the level of insurance offered to employees, as well.^[2]

Ten essential benefits for coverage

The law specified ten essential benefits that plans created after the law's passage need to include. Existing plans were grandfathered in, but few of the grandfathered plans remain due to frequent changes to health insurance policies.^[3] The ten essential benefits outlined by the law are^[4]

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance abuse disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care

Congressional passage

The Patient Protection and Affordable Care Act (HR 3590) was sponsored by Rep. Charlie Rangel (D-NY) and co-sponsored by 37 House Democrats and 3 House Republicans.^[5] On October 10, 2009, the bill passed through the House to the Senate. After amendments were added in the Senate, the bill was passed by Democrats in the Senate with voting strictly along party lines, 60-39.^[6] The bill returned to the House for a vote on its final passage. All 178 House Republicans opposed the bill's passage along with 34 Democrats, while 219 Democrats voted in favor, leaving the final vote in favor of passage at 219-212.^[7]

Democrats in opposition

The following is a list of U.S. House Democrats who voted against Obamacare's passage during the March 21, 2010 vote:^[7]

Implementation timeline

The following is a timeline of the implementation dates of key aspects of Obamacare:^[8]

2010

• January 1: Small business tax credits provided for small businesses offering health insurance to employees
• July 1: Pre-existing Condition Insurance Plans offered by either the federal government or individual state governments
• July 1: Healthcare.gov minimal functioning website established to educate consumers on coverage options
• July 1: Tax of 10 percent on indoor tanning services implemented
• September 23: Adult children are permitted to remain on a parent's healthcare plan until age 26
• September 23: Insurance plans prohibited from setting lifetime coverage limitations
• September 23: Insurance plans required to allow appeals with an external review process
• September 23: New plans required to cover the established minimum coverage

2011

• January 1: Insurers required to provide rebate the following year if a minimum proportion of premiums were not spent on medical services
• January 1: Limitations placed on uses for tax-free health accounts such as HSAs, FSA and HRAs
• March 23: Grants awarded for the establishment of state health insurance exchanges

2012

• September 23: All insurance providers must provide a uniform summary of care and benefits to consumers

2013

• January 1: States required to notify the U.S. Department of Health and Human Services whether they would form their own exchanges or join the federal exchange
• July 1: Consumer Operated and Oriented Plan (CO-OP) put into action to encourage nonprofit, member-run health insurance companies

2014

• January 1: Medicaid coverage expanded to those under 65 with income levels up to 138 percent of the federal poverty level
• January 1: Minimum medical coverage required for people with individual insurance plans
• January 1: Annual coverage limits on insurance plans prohibited
• March 31: Individuals lacking healthcare coverage must pay a tax penalty for each month spent uninsured

2015

• January 1: Employers with more than 100 employees assessed fees, per employee, for not providing health insurance options

2016

• January 1: Employers with 50-99 employees assessed fees, per employee, for not providing health insurance options

Individual mandate

Healthcare exchanges began a six-month open enrollment period for individuals on October 1, 2013, during which uninsured individuals could sign up for health insurance plans to avoid fines assessed if not insured by the end of the period, March 31, 2014.

Health insurance exchanges

See also: Healthcare.gov website rollout

Healthcare.gov is the website published by the federal government that is intended to serve as the central online hub for the rollout of Obamacare. The federal website is intended to provide insurance options and administer government subsidies for residents of 36 states.^[9] Fourteen states and the District of Columbia elected to create their own healthcare exchanges.^[10]

2016 co-op failures, premium increases, and insurer exits

Are there places where a single insurer is offering coverage through ACA exchanges? December 29, 2016

New York Times reporters Reed Abelson and Margot Sanger-Katz claimed that there are many locations across the United States where only one insurer is offering coverage through the government exchanges. Is it true that a single insurer is offering coverage through ACA exchanges in many parts of the country? Read Ballotpedia's Verbatim fact check »

To learn more about these issues in detail, see Ballotpedia's full page on the health insurance exchange issues.

Several events occurred in 2015 and 2016 that led some to question the stability and sustainability of the Affordable Care Act (ACA) health insurance exchanges:

• Over half of the nonprofit insurance co-ops established under the law, which sold plans on the exchanges, had closed by October 2016.
• Three major nationwide insurers scaled back their presence on the exchanges for 2017.
• Insurers requested an average 24.6 percent premium increase for their 2017 exchange plans.

The health insurance exchanges were created under the ACA to serve as a platform where individuals without employer-sponsored insurance can browse and purchase plans. The law also provided for the establishment of insurance co-ops to compete with larger insurers on the exchanges. Twenty-three co-ops were created under the law, but many were in a precarious financial position after their first year. Policy analysts primarily attributed these early financial struggles to premiums that were set too low, benefits that were too generous, and enrollment that grew too quickly. By the end of 2015, half had been deemed insolvent by state regulators and closed. Five others closed in 2016, leaving six in operation by October.^{[11][12][13][14]}

In addition to the co-ops, many other insurers lost money on their exchange plans—two-thirds of those participating in the exchanges were unprofitable in 2014, according to the Commonwealth Fund. During 2016, three major insurers—UnitedHealthcare, Humana, and Aetna—announced intentions to withdraw from most exchanges in 2017 due to their losses. Due to these exits and other exits of smaller statewide insurers, consulting firm Avalere found that about 36 percent of ACA markets would have just one carrier offering plans in 2017.^[15]

Insurers nationwide also requested large premium increases for 2017, which they said are necessary to continue to pay medical claims for enrollees who were unhealthier than expected. In mid-2016, as insurers filed their premium rate requests for 2017, several reports emerged of large premium increases. Data analyst and blogger Charles Gaba estimated that nationwide, insurers selling plans in the individual market requested an average 24.6 percent rate increase. This figure includes premiums for plans sold both on and off the exchanges. On October 25, 2016, the U.S. Department of Health and Human Services announced that in the 38 states using the Healthcare.gov platform, premium rates for benchmark plans would rise by an average 25 percent in 2017. These increases have been attributed to rising medical costs, the end of the transitional reinsurance program, and a pool of enrollees who were sicker than expected.^[16][17][18]

While some argue that these events show that the ACA's insurance model is unsustainable, others have argued that the events are part of an adjustment period as insurers learn the new individual market.^[19]

Rollout issues

The rollout date was met with high demand for the website, both by those seeking insurance and those curious to see how the site worked. Attempts to use the website resulted in errors, including:

• Error messages while creating an account and trying to log in^[20]
• Data transfer problems from the exchange to healthcare providers^[21]
• Errors in price quotes when not logged in^[22]
• Lack of ability to sign up directly through individual insurance providers.^[23]

A report later showed that consultants hired by HHS identified problems with the website while it was in development, but this information was never shared with the staff actually working on the website.^[24]

There was also some controversy involving a government partnership with the drugstore chain Rite Aid to help people enroll in healthcare plans. On September 9, 2013, Kathleen Sebelius announced a partnership with Rite Aid to promote the Affordable Care Act throughout the country. The company promised to place insurance agents at 2,000 of the chain's 4,600 locations nationwide. Agents were not to be affiliated with the insurers offering new exchanges, but they did receive commission on each policy taken out. Rite Aid also received a commission per policy. Sebelius commented on the agreement, stating, "We weren't ever going to make this program work from Washington. This has to be an on-the-ground effort. Americans trust their pharmacists. Often the pharmacist is the on-the-ground health provider people see the most and know the best, so having this critical role in a pharmacy makes wonderful sense."

Steve Lonegan, a New Jersey candidate for U.S. Senate, spoke out against the agreement, stating, "If Rite Aid and the other big companies are so enthusiastic and think this is such a great plan, let it stand on its own two feet."^[25]

Post-enrollment period data inconsistencies

The HHS inspector general released a report in June 2014 documenting that from October to December 2013, 2.6 million data inconsistencies were not able to be resolved and pressured the Centers for Medicare and Medicaid Services to establish a public plan for resolving the inconsistencies. The healthcare exchange's data hub was designed to fact check applications against federal information from the Internal Revenue Service, Social Security Administration and U.S. Department of Homeland Security, but the initial tech issues with the data hub created inconsistencies that possibly misled customers about their eligibility for certain plans and tax credits. The inconsistencies that could not be resolved by the federal exchange dealt with citizenship status, income verification, and employee-sponsored minimum essential coverage. Eleven state marketplaces also reported inconsistencies during the rollout, but only four states reported unresolved problems. If the customer received a premium tax credit due to an inconsistency, the IRS would likely either seek benefits that were not supposed to be given or award tax credits to those who should have been eligible. The report stated, "If the applicant chooses the advance premium tax credit, the Internal Revenue Service (IRS) will reconcile the actual credit amount made on behalf of the individual when an individual files a tax return at the close of the year."^[26]

Cost overruns

The Government Accountability Office (GAO) investigated the costs of the Healthcare.gov federal exchange website, estimating that the total cost, as of March 2014, was $840 million.^[27] GAO Director of Acquisition and Sourcing Management William Woods claimed that the overrun was due to inconsistent oversight and constantly changing requirements, which were noted by contractors when asked to testify during the website rollout. Woods stated in his written testimony, "We found that CMS undertook the development of HealthCare.gov and its related systems without effective planning or oversight practices, despite facing a number of challenges that increased both the level of risk and the need for effective oversight. According to the Centers for Medicare and Medicaid Services program and contracting officials, the task of developing a first-of-its-kind federal marketplace was a complex effort that was exacerbated by compressed time frames and changing requirements."^[28] According to Kathleen Sebelius' House testimony on October 30, 2013, the website had a cost of $118 million plus another $56 million for IT support.^[29] However, by February 2014, the costs for the federal marketplace jumped from $56 million to $209 million and the data hub went from $30 million to nearly $85 million. Additionally, in January 2014 the firm Accenture took over parts of the build from the original contractor, CGI Federal, with a contract initially worth an estimated $91 million that increased to $175 million by March 2014.^[28]

The GAO released five recommendations for the Centers for Medicare and Medicaid Services, including:^[28]

• addressing the cost overruns and managing them appropriately,
• collecting quality assurance plans on a regular basis and
• formalizing the guidelines and expectations of contract managers.

Eligibility-verification sting operation

The Government Accountability Office (GAO) conducted a sting operation on the verification system of the federal healthcare exchange in which they submitted fake account information while signing up. The verification system allowed 11 of the 18 fake accounts to sign up for subsidized health insurance. The GAO tried telephone and online signups, while failing in their attempts at using in-person navigators. Several Republican members of Congress requested the operation prior to the Healthcare.gov website rollout.^[30] Acting Director of Forensic Audits Seto Bagdoyan insisted that the investigation was ongoing and members of Congress "can’t draw any conclusions" from the small sample size. Bagdoyan admitted that the sample raised questions about the effectiveness of the verification program but did not suggest that the sting was any more than a small sample.^[31]

Health insurance policy cancellations

See also: Health insurance policy cancellations since Obamacare

Leading up to the passage of Obamacare into law, President Obama stated in an August 22, 2009 Internet address: "If you like your private health insurance plan, you can keep your plan. Period."^[32]

However, when the law was enacted on October 1, 2013, many individually insured people began receiving letters from their insurance carriers notifying them that their current plans would be canceled at the end of the policy term. The plans were canceled because they did not meet new minimum coverage requirements set by the law.^[33]

On November 14, 2013, under pressure from Democratic members of Congress, President Obama announced the administration's intention to allow people whose insurance plans had been canceled to re-enroll in their plans.^[34] On December 19, 2013, the administration announced that those whose plans were canceled under the law met the Health and Human Services Department's "hardship exemption." The stated exemption covers those who "experienced financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan."^[35]

On March 5, 2014, the administration announced that the delayed mandate could extend to two years, one more than was offered in the original delay due to canceled plans. Sen. Mitch McConnell stated his opposition to the new delay, stating, "By announcing a new delay in requiring that policies meet minimum coverage standards, the administration avoids a new round of health policy cancellations set to hit shortly before the November elections."^[36]

Enrollment numbers by deadline

March/April enrollment official report

The official report for the closing of the open enrollment period was released May 1, 2014. Below are some notes from the report:

• At the conclusion of the open enrollment period, 8,019,763 users had selected a plan. Of those signups, 5,446,178 signed up through the federal exchange.^[37]
• Of the signups, 34 percent were age 34 and under, while 48 percent were between the ages of 45 and 64.^[37]

Enrollment goals

Verbatim fact check: Do "30 million Americans remain uninsured"?

Yes. The uninsured rate varies substantially by state, and by demographic group. But national estimates place the total number of uninsured at approximately 30 million. Read Ballotpedia's Verbatim fact check »

The federal government expected that seven million Americans who were previously uninsured would buy a health insurance plan by March 31, 2014. The White House hoped that about 2.7 million of the enrollees would be young adults in order to offset the costs of insuring those with pre-existing conditions.^[38] Ezra Klein of the Washington Post, wrote on November 26, 2013 that in order for Obamacare to be successful, 39 percent of the new signups should be young, healthy people. If the number of young and healthy people did not reach that number, Klein suggested the premium costs for next year could be disastrous.^[39] However, in 2015 the RAND Corporation released an analysis showing that premiums would only increase by about 3 percent if the government failed to meet its enrollment goals for young adults.^[40]

Increased funding for minority enrollment

HHS announced the Partnership to Increase Coverage in Communities on September 11, 2014, which was established to disburse funding to organizations focused on helping minorities enroll in healthcare coverage. The Centers for Disease Control and Prevention estimated that only 40 percent of Latinos and 25 percent of African Americans were enrolled following the first enrollment period. The director of the Office of Minority Health stated, "Racial and ethnic minorities have lower rates of health insurance coverage than the national average and stand to benefit greatly from the Affordable Care Act."^[41]

Initial enrollment period results

In a report released June 18, 2014, the Health and Human Services Department announced that due to federal subsidies, 3.2 million Americans were paying less than $100 per month for their health insurance coverage. A senior HHS official claimed the average premium went from $346 to $82 because of the tax credits through the federal marketplace. Opponents of the credits claim the federal budget would suffer from the increased burden. President of the American Action Forum Douglas Holtz-Eakin noted, "The report does not demonstrate that families had more choices or that premiums are lower in the past. It does demonstrate that consumers avoid 76 percent of premiums because federal spending subsidizes the cost."^[42]

Polling released by Gallup, the Commonwealth Fund and the Urban Institute on July 10, 2014, found that the number of uninsured people in the United States dropped by anywhere from 8-9.5 million Americans. Experts agreed there was no definitive number on the amount of people with health insurance that weren't previously insured, but the number of uninsured was lower than it was prior to Obamacare taking effect.^[43]

Sebelius resignation

On April 10, 2014, Secretary of Health and Human Services Kathleen Sebelius resigned from her position following the troubled rollout of Obamacare. She and President Obama determined that the end of the open enrollment period provided a chance for change. Sebelius saw her public appearances dwindle as the problems with the Healthcare.gov rollout persisted. President Obama named Director of the Office of Management and Budget Sylvia Mathews Burwell as the nominee to succeed Sebelius.^[44] Mathews Burwell was confirmed on June 5, 2014.^[45]

Penalties

The penalty for not being enrolled in a health insurance plan by March 31, 2014, was a charge of either $95 per person or 1 percent of household income, whichever is greater.^[46] On October 21 2013, White House Press Secretary Jay Carney would not say whether the website issues could delay the individual mandate.^[47] The administration announced in March 2014 that uninsured users could still enroll in April, paying their first premium, to avoid the penalty as long as a plan was selected by March 31, 2014.^[48]

Employer mandate

Employers with more than 100 employees were required to extend health insurance options to 70 percent of full-time employees by 2015, with the number rising to 95 percent by 2016 in order to avoid paying fines. Employers with 50-99 employees were required to extend health insurance to all employees by 2016.^[8]

Boehner lawsuit

See also: Boehner's lawsuit against the Obama administration

Claiming President Obama "changed the healthcare law without a vote of Congress, effectively creating his own law by literally waiving the employer mandate and the penalties for failing to comply with it," Speaker of the House John Boehner (R-OH) announced a lawsuit focusing on the president's failure to enforce the employer mandate as written in the ACA.^[49] A draft resolution to for a Bipartisan Legal Advisory Group (BLAG) was introduced on July 10, 2014, by House Rules Committee Chairman Pete Sessions (R-TX).^[50][51]

Penalties

Employers that did not offer health insurance would be fined $2,000 per full-time equivalent (FTE) employee, excluding the first 30 employees. Employers that did offer health insurance, but had at least one full-time employee receiving the tax credit for purchasing on the exchange, would be fined either $3,000 for each employee receiving the tax credit or $2,000 for each employee after the first 30 employees.^[8]

Insurance company regulations

Under the law, insurance companies were required to provide essential benefits and to cover people regardless of preexisting conditions. Limits were also placed on how they could spend money they received through the premiums that people pay to enroll.

Medical loss ratio

The medical loss ratio (MLR) is the percentage of money received from premiums that is spent on actual medical care. Insurance companies usually have an MLR of 75 percent to 85 percent, with the remaining amount of money received from premiums (25 percent to 15 percent) going towards salaries, profit, and administrative overhead. The Affordable Care Act specified that insurance companies must maintain MLRs of at least 80 to 85 percent--in other words, that insurance companies must spend at least 80 percent to 85 percent of premiums on medical care. Companies that didn't maintain this target MLR would have to issue refunds to their enrollees.

Rick Ungar, writing for Forbes, predicted that this regulation would "lead to the death of large parts of the private, for-profit health insurance industry."^[52] However, Tim Worstall pointed out that insurance companies have a second stream of income from investments, and may therefore remain profitable.^[53]

For the 2011 plan year, when the regulation took effect, insurance companies had to pay $1.1 billion in rebates to their customers. By the 2013 plan year, as companies became more efficient at meeting the target MLR, the number had declined to $332 million.^[54][55]

Medicaid

See also: Medicaid spending by state

Physicians had previously been less likely to accept Medicaid than Medicare, because of Medicaid's lower reimbursement rates. The Affordable Care Act increased Medicaid's reimbursements to primary care physicians, matching Medicare levels. The law also modernized Medicaid enrollment by requiring states to accept multiple forms of enrollment, including online applications.

Medicaid expansion

The Affordable Care Act expanded eligibility to enable more people to receive Medicaid. Medicaid had originally been designed as a program to provide healthcare to pregnant women and young children with household incomes around the federal poverty level, and to disabled people, older children, and parents with household incomes below the federal poverty level. Each state was allowed to decide whether to also cover able-bodied adults without children or people with slightly higher incomes.^[56]

The Affordable Care Act encouraged states to grant Medicaid to all people with incomes less than 138 percent of the federal poverty line, regardless of age or parental status. It provided 100 percent of funding to cover the new recipients for the first few years, and cut off federal Medicaid funding to states that chose not to expand coverage. However, the Supreme Court ruled in National Federation of Independent Business v. Sebelius (2012) that the federal government could not withhold Medicaid funds from states that chose not to expand eligibility. By 2015, 22 states had chosen not to expand eligibility.^[57][58]

The Affordable Care Act had not provided tax credits to adults with household incomes less than the federal poverty line, because the law had aimed to cover these people under Medicaid. In states that didn't expand Medicaid, many of these adults fell into a "coverage gap" in which they neither qualified for Medicaid nor for federal tax credits to purchase health insurance.^[59]

By 2014, about 6 million new individuals had enrolled in Medicaid as a result of the Affordable Care Act.^[60]

Medicare

Medicare spending cuts

The Affordable Care Act reduced Medicare spending—by an average of $45 billion per year—in order to help fund new provisions of the law.^[61] The law cut spending by reducing benefits for high-income beneficiaries, by cutting some of Medicare's reimbursement rates to healthcare providers other than physicians, and by reducing funding to private insurance companies that contract with the federal government to offer Medicare Advantage plans.^[62]

Independent Payment Advisory Board

The law established a new government agency called the Independent Payment Advisory Board (IPAB), with power over the Medicare program. IBAP was modeled on a proposal by former senator Tom Daschle, who in turn modeled it after the Federal Reserve Board. IPAB's decisions were binding and would require a three-fifths super-majority from Congress in order to be overturned. The Department of Health and Human Services would automatically implement its recommendations unless overridden by Congress. However, the law stipulated that IPAB could not ration healthcare, raise premiums or restrict eligibility.^[63]

Writing in the Wall Street Journal, Sarah Palin argued that the Affordable Care Act "implicitly endorses the use of 'death panel'-like rationing by way of the new Independent Payments Advisory Board—making bureaucrats, not medical professionals, the ultimate arbiters of what types of treatment will (and especially will not) be reimbursed under Medicare."^[64]

Medicare prescription drug coverage

The law closed the "doughnut hole" of Medicare prescription drug coverage (Part D). Previously, Medicare beneficiaries had been responsible for 100 percent of their prescription drug costs between $2,250 and $5,100 per year. The Affordable Care Act covered part of the costs for drug spending in this range and also required pharmaceutical companies to provide discounts to Medicare beneficiaries.

Attempts to change or repeal

See also: Alternative proposals to the Affordable Care Act (Obamacare)

Legislation

Could 36,000 people die if the ACA is partially repealed? January 19, 2017

Ian Millhiser, Justice Editor at Think Progress, recently claimed that “Nearly 36,000 people could die every year, year after year, if the incoming president signs legislation repealing the Affordable Care Act.” He said he based his conclusion on two studies: one predicting that 29.8 million people will lose health insurance if parts of the Affordable Care Act (ACA) are repealed, and another that calculated one less death per year for every 830 adults that gained health insurance under Massachusetts’ reform plan. Do the studies support Millhiser's claim that nearly 36,000 people could die every year, year after year, if the Affordable Care Act is repealed? Read Ballotpedia's Verbatim fact check »

On January 6, 2016, the U.S. House of Representatives voted in favor of a bill to repeal parts of the Affordable Care Act, also known as "Obamacare," and to end federal funding for Planned Parenthood over the next year. President Barack Obama vetoed the measure on January 8, stating that the legislation would have caused harm "to the health and financial security of millions of Americans."^[65]

The bill, HR 3762, was widely expected to be vetoed by the president and was viewed as more of a symbolic move for the Republican Party to show voters "how they would govern if they win back the White House in November." The measure had been passed earlier in the Senate as a reconciliation bill, which bypasses filibuster attempts and needs only 51 votes to pass, rather than the standard 60 votes. The bill would have ended the expansion of Medicaid and federal subsidies for people buying health insurance on the new exchanges. These changes would have taken place in 2018, and Republicans say they would have used the two years in between to implement a replacement of the law.^[66]

According to the Congressional Research Service, as of December 2015, the House had voted to alter, defund, delay or repeal portions of the Affordable Care Act in some way 56 times before. Sixteen of these measures were ultimately enacted, and four would have repealed the law in its entirety had they been enacted. The passage of HR 3762 marked the first time a measure to repeal major portions of the law had passed the Senate. The Congressional Budget Office and the Joint Committee on Taxation estimated that the bill would have reduced the federal deficit by $282 billion between 2016 and 2025.^[65][67]

Lawsuits

See also: Obamacare lawsuits

National Federation of Independent Business v. Sebelius

Twenty-six states and the National Federation of Independent Business sued to challenge the constitutionality of several key Obamacare provisions. The United States Supreme Court ruled to uphold Obamacare in National Federation of Independent Business v. Sebelius, decided June 28, 2012. In a 5-4 decision, the Court upheld the Affordable Care Act's individual mandate as a legitimate exercise of Congress' Article I power to lay and collect taxes. Chief Justice John Roberts, delivering the opinion of the Court, wrote, "The court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation, the Constitution has made no such promise with respect to taxes."^{[68] [69]} The Court declined to rule whether the Affordable Care Act was also a legitimate exercise of Congress' Article I power to regulate interstate commerce.

The Court also considered whether the Affordable Care Act's expansion of Medicaid was a constitutional exercise of federal power. The Court concluded that, by cutting off all Medicaid funding to states that refused to expand the program, the federal government was engaging in coercion. The Court stated that the law transformed the original Medicaid program into "an element of a comprehensive national plan to provide universal health insurance coverage."^[70]

Justices Scalia, Kennedy, Thomas, and Alito dissented. The dissenting opinion argued that the individual mandate was not a legitimate regulation of interstate commerce, because it compelled people to engage in particular transactions rather than regulating existing transactions: "the mere fact that we all consume food and are thus, sooner or later, participants in the 'market' for food, does not empower the Government to say when and what we will buy. That is essentially what this Act seeks to do with respect to the purchase of health care."^[71] The dissenters argued that the individual mandate represented an unprecedented abuse of federal power, for the federal government has "never before used the Commerce Clause to compel entry into commerce." The dissenting opinion also argued that the individual mandate was not a legitimate exercise of the power to tax, because the statute described the fine as a "penalty" rather than a tax. The opinion concluded that the Affordable Care act should be overturned in its entirety, as it could not function as intended without the individual mandate.

Burwell v. Hobby Lobby

The Affordable Care Act had mandated that insurance plans must cover certain essential benefits--which HHS later interpreted to include contraceptive coverage. Employers that didn't provide this benefit in their health insurance plan would face hefty fines. Two family-owned companies—Hobby Lobby and Conestoga Wood Specialty—challenged the contraception mandate in court. They sought exemptions from coverage of four different contraceptives--two emergency morning after pills and two intrauterine devices (IUDs)--on the basis that those contraceptives were forms of abortion according to their religious beliefs.

In November of 2013, the Supreme Court granted certiorari to the two cases and consolidated them. Both companies' appeals were heard together during a one-hour public session. The Supreme Court ruled in favor of Hobby Lobby in Burwell v. Hobby Lobby on June 30, 2014.^[72][73]

The 5-4 decision allowed closely-held companies to opt out of offering contraceptives on the basis of religious beliefs. The case hinged on the free exercise clause of the First Amendment and the Religious Freedom Restoration Act (RFRA) passed by Congress in 1993.^[74] RFRA stated that the federal government "shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability."^[75]. Justice Samuel Alito, writing the court's opinion, turned to Title 1 of the United States Code (the "dictionary" used in interpreting statutes) in order to interpret the word "person." Since Title 1 defined "person" to include "corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals," the Court found that for-profit corporations qualified as persons for the purposes of RFRA. The opinion concluded, "We doubt that the Congress that enacted RFRA — or, for that matter, ACA – would have believed it a tolerable result to put family-run businesses to the choice of violating their sincerely held religious beliefs or making all of their employees lose their existing healthcare plans."^[76]

The dissenting justices claimed the ruling would allow companies to "opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs." Likewise, the Obama administration argued that companies that did not wish to provide the contraceptive coverage or other areas of coverage due to religious beliefs could decide not to provide any company-wide options.^[76]

Although the decision expanded the notion of corporate personhood to include religious rights "to provide protection for human beings," members of the public found it highly divisive as it reaffirmed the Court's perceived "pro-business" stance.^[77] Senate Majority Leader Harry Reid (D-NV) pledged to restore the Affordable Care Act's contraception coverage, stating, "If the Supreme Court will not protect women’s access to health care, then Democrats will. We will continue to fight to preserve women’s access to contraceptive coverage and keep bosses out of the examination room."^[78]

King v. Burwell

The Affordable Care Act stated that individuals are eligible for tax credits to help pay for plans "which were enrolled in through an Exchange established by the State."^[79] However, the Internal Revenue Service (IRS) granted the tax credits "regardless of whether the Exchange is established and operated by a State (including a regional Exchange or subsidiary Exchange) or by HHS."^[80]. Many states objected to the IRS rule of granting tax credits to individuals purchasing on the federal exchange. They found the tax credits objectionable because individuals who received tax credits actually triggered tax penalties for their employers. Furthermore, the availability of tax credits made it harder for individuals to opt out of purchasing insurance on the basis of hardship. In order to shelter their residents from these penalties, many states had chosen not to establish exchanges at all—at the time of the lawsuits, only 16 states had exchanges.

A number of lawsuits were filed against the IRS interpretation, claiming that the Affordable Care Act only allowed the IRS to grant tax credits to individuals who purchased insurance through state exchanges. Lawsuits against the tax credits were filed in Oklahoma (Pruitt v. Burwell), DC (Halbig v. Burwell), and Virginia (King v. Burwell).

In Pruitt v. Burwell and Halbig v. Burwell, the U.S. Court of Appeals for the DC Circuit and the U.S. District Court for the Eastern District of Oklahoma both ruled that the tax credit should be restricted to the state exchanges only. In King v. Burwell, the U.S. Court of Appeals for the Fourth Circuit ruled that the tax credit can be provided through both the state and federal exchanges. In order to resolve this discrepancy, the Supreme Court granted certiorari to King v. Burwell on November 7, 2014.

On June 25, 2015, the Supreme Court ruled 6-3 to uphold the tax credits for purchasing on the federal exchange. Chief Justice John Roberts delivered the opinion of the Court, joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. Justices Antonin Scalia, Clarence Thomas, and Samuel Alito dissented.^[81]

In the opinion, the Court applied a two-part test in interpreting the Affordable Care Act: "we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable." The Court found that, when taken in context, the phrase "established by the State" was ambiguous, because other parts of the Affordable Care Act treated the federal and state exchanges as equivalent and assumed that tax credits would be available through either. The Court then turned to the issue of whether the IRS interpretation was reasonable. The Court described the Affordable Care Act as "a series of interlocking reforms" and noted that its other reforms would enter "a death spiral" without the tax credits. Thus granting tax credits to those purchasing on the federal exchange was not only reasonable but "necessary" in order to accomplish Congress' goals in passing the Affordable Care Act.^[82]

Ballot measure challenges

Beginning early on during congressional debate over the bill, several legislative referrals and citizen initiatives appeared seeking to stop implementation of the act in a number of states. Most of these ballot measures proposed an amendment to the state's constitution declaring that citizens of the respective state could not be compelled to purchase health insurance or be fined for not doing so. Some measures, however, instead chose to focus on prohibiting the state's government from establishing a health insurance exchange. This particular tactic was used so as to gain additional legal leverage before the courts by making available the argument that the federal law violated state constitutions. Another aspect of this strategy was to demonstrate public disapproval of the bill by having such constitutional changes be decided by voters rather than state legislators. This effort was not universally successful however, because some states' voters refused to approve these constitutional amendments. Interestingly, despite Florida being at the forefront of the massive lawsuit that finally reached the United States Supreme Court, its own such amendment failed during the 2012 general election.

The following is a list of states that saw such constitutional amendments on their ballots since 2008. Successful measures are indicated with a a.

• Arizona Health Insurance Reform Amendment, Proposition 106 (2010)a
• Missouri Health Care Freedom, Proposition C (August 2010)a
• Oklahoma Health Care Freedom Amendment, State Question 756 (2010)a
• Alabama Health Care Amendment, Amendment 6 (2012)a
• Montana Health Care Measure, LR-122 (2012)a
• Wyoming Health Care Amendment, Constitutional Amendment A (2012)a
• Missouri Health Care Exchange Question, Proposition E (2012)a
• Florida Health Care, Amendment 1 (2012)d
• Arizona Medical Freedom to Choose, Proposition 101 (2008)d
• Colorado Health Care, Amendment 63 (2010)d

Recent news

This section displays the most recent stories in a Google news search for the term Obamacare

See also

• Effect of the Affordable Care Act in the United States
• Obamacare lawsuits
• U.S. Department of Health and Human Services
• Healthcare.gov website rollout
• Health insurance policy cancellations since Obamacare
• Boehner's lawsuit against the Obama administration

External links

• Healthcare.gov website
• Health Care in America website

Footnotes

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