Does Obama Care? True Consequences of the “Affordable” Care Act

In mid-August, the U.S. Court of Appeals for the Eleventh Circuit ruled on the Florida lawsuit challenging the Patient Protection and Affordable Care Act (Obamacare or PPACA).  The suit represents 26 states, but not North Carolina.

During this past legislative session, North Carolina’s Republican leadership wrote an amicus brief supporting the 26 states’ position that Obamacare was unconstitutional and infringed on states’ rights.

The Eleventh Circuit court determined Obamacare’s individual mandate is unconstitutional.  In essence, the individual mandate forces individuals to enter the stream of commerce by requiring them to purchase health insurance or pay a penalty.  The government’s position purports that a person’s mere existence affects interstate commerce and therefore, Congress has the right to regulate every component of an individual’s life.  However, this assumption would provide no restraint on Congress’ limited enumerated powers.

The justices in the Eleventh Circuit believed while Congress has broad power to deal with the uninsured, Congress cannot mandate that individuals “enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”

The Eleventh Circuit’s decision is the second appellate court ruling on Obamacare in recent months. A June ruling in the Sixth Circuit found the healthcare overhaul constitutional in a 2-1 decision. However, the earlier Northern Florida district court decision that was appealed to the Eleventh Circuit determined that the entire law must be voided because of the unconstitutional individual mandate provision.

The Eleventh Circuit’s ruling splits the difference somewhat – declaring that the individual mandate should be struck from Obamacare, but the other provisions could remain “legally operative.”

If such an outcome is allowed, the public policy implications could be devastating.  One stand-alone clause requires insurers to accept all prospective customers, regardless of health status, encouraging people to wait until they are sick to acquire coverage.  As a result, the cost of healthcare is likely to increase for both the healthy and the sick.

With each new appellate decision reaching a different conclusion, the likelihood that the U.S. Supreme Court will offer a final verdict significantly increases.  Federal appellate decisions provide legal precedent for entire regions of the nation.  If a national law, such as Obamacare, has been found both constitutional and unconstitutional in different regional appellate courts, the U.S. Supreme Court may decide to intervene and provide a final decision.  Because of the varying decisions, at least one of the lawsuit parties is likely to ask the Supreme Court to make a final determination.  In the meantime, we’re left pondering and estimating the full impact of Obamacare if it is implemented in its entirety and whether Obama actually cares about the right of individuals to make health decisions themselves.

For example, does Obama care that, according to the Congressional Budget Office (CBO), PPACA will raise premiums by up to 30 percent?  The new mandates and federal regulations will substantially increase premiums for families, contrary to Obama’s earlier comments that insurance premiums will be cut by an average of $2,500 per family.  In addition, several new taxes on individuals and businesses will take effect as a result of Obamacare.  There will be a tax on individuals who do not purchase government-approved health insurance; a tax on employers who fail to fully comply with PPACA mandates; an excise tax on “Cadillac” high-cost health plans; a tax on medical devices – and the list goes on.

These new burdensome regulations and taxes will cause many small businesses to discontinue employer-based health coverage.  Obama had promised that individuals who already had health insurance would not be harmed or affected by Obamacare.  However, according to the Republican Policy Committee, as much as 80 percent of small businesses are estimated to abandon health insurance plans because of the massive increased costs under the national law.  In many cases, the penalty for not providing employer-based insurance will be less than the costs of providing coverage to their employees – likely to undermine employee morale, decrease benefit packages, and dump thousands of employees into state-run health benefit exchanges and Medicaid. 

Where businesses can afford to offer employee coverage, they may be less likely to hire new employees given the increased burden of doing so. Such a result will further impact the unemployment rate in America and discourage innovation and job growth.  In fact, even the CBO has admitted PPACA will reduce the amount of labor used in the economy.

And what about the impact on Medicare and Medicaid?  Does Obama care that millions of seniors will lose access to Medicare Advantage plans?  According to a Centers of Medicare and Medicaid Services report (CMS), millions of seniors will be forced to give up health care plans they have while Obamacare cuts a half-trillion dollars from Medicare over the next decade.  The cuts in Medicare Advantage will impose steep costs on millions of Medicare beneficiaries and will fall disproportionately on low income and minority seniors.

Obamacare significantly expands Medicaid eligibility as well, resulting in the states picking up a larger portion of the costs down the road.  As more qualifying individuals participate in Medicaid, state costs will continue to grow, but within a few years, the federal government will cease to provide the enhanced matching rate to pick up this increase in participants.  The size of the unfunded mandates is estimated at $118 billion.  On top of all of this, the administrative costs of expanding Medicaid and participating in a health benefit exchange will only add to these state expenses in a time where many are struggling just to stay afloat.

As a whole, the CBO has projected the true cost of health insurance expansion will be $229 billion in 2020 and $245 billion in 2021.  National health spending, according to CMS, is estimated to increase by almost $311 billion.  These estimates demonstrate a trend towards uncontrollable costs resulting largely from the total disconnect by the insured patient with regards to the actual costs of health services rendered in addition to the ever growing onerous regulations.

So, does Obama really care?  He has recently criticized his political opponents, claiming he cares about the American people and their healthcare decisions while his opponents do not.  However, the ramifications of Obamacare indicate an overly intrusive reach into the private lives of citizens and lead one to believe that the only thing Obama cares about is his political contributors, and not the American people.