On June 25, 2015, the Supreme Court of the United States ruled 6-3 that the Obamacare tax credits for the states is legal. This is a major victory for Obamacare and prevents millions of people from losing subsidized coverage. Unfortunately, for those who don’t receive subsidies and have already received huge rate increases, this decision does nothing to fix the broken parts of this law that are costing many people thousands of dollars a year.
What Was The Case About Exactly?
King v. Burwell (the official name of the case) centered on the question: Is it legal for the government to offer premium tax credits in states with insurance exchanges set up by the state, and also in states where the Department of Health and Human Services stepped in?
A lot of the discussion revolved around how the law was actually written and how it should be interpreted. There was one phrase in particular where the law said that tax credits could be given only to people in states with state-run exchanges, but the Court decided this was invalid. This is because that particular clause (according to the majority ruling) didn’t make sense with the rest of the law’s wording, and that it was obvious that Congress meant for their requirements to apply to every State.
What Happens Now?
This ruling is a victory for people who need those premium tax credits to afford health insurance. Analysts say that about 6 million people could have lost their subsidized insurance if the Court had ruled the other way.
However, if you are part of the other group of millions who do not qualify for tax credits, you can expect your already expensive premiums to cost more and more. In just two years since Obamacare went into effect, premiums have nearly doubled. So while the law still stands, many changes need to be made so that health insurance also stays affordable for the middle-class.
Policy Suggestions To Lower Costs
Since Obamacare, the insurance marketplace has gotten a lot more complicated, confusing, and pricey. To make healthcare affordable for all Americans, there are several policy changes that could help:
- Educate and encourage people to get HSAs (health savings accounts)
HSAs are accounts where you can put aside money to cover future healthcare costs. The great thing about HSAs is that you don’t have to pay any taxes on the money before you put it into the account, and the money continues to earn interest tax-deferred. Anyone who has an HDHP (high-deductible health plan), qualifies to set up an HSA.
- Create a totally open, competitive pharmaceutical market
Pharmaceutical drugs cost a lot in America. In places like Canada, common drugs like Lipitor are much more affordable. If the United States allowed international competition, it would drive the price down and force companies to sell their drugs for less. The FDA already has a standard to monitor the quality of international drugs (Current Good Manufacturing Practices), so why not put it use in order to benefit Americans?
- Get rid of expensive mandates
The ACA regulations require that insurance providers cover expenses like preventative care, which they haven’t had to do before. Unfortunately, these mandates drive up costs. In eliminating some of these mandates, people could deposit more into their HSAs and thus be able to carry lower-priced, higher deductible plans.
- Allow higher deductibles on health insurance plans, which can greatly reduce monthly premiums. Let insurance serve its purpose as a protection against catastrophic expenses, and let people choose to pay their smaller medical bills out-of-pocket.
Everyone Deserves Affordable Health Insurance
SCOTUS’ ruling is good news for those who need tax subsidies in order to get health insurance. However, there are still millions who struggle to find affordable health insurance and who don’t qualify for premium tax credits. By making overall policy changes that benefit everyone, getting health insurance can finally become less of a burden.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.