Double Trouble for the Health Care Overhaul?

As President Barack Obama's administration gears up for its second open enrollment period next month, the president’s health care overhaul is now facing two new threats. Either piece of news, on its own, should warrant concern from the law’s most ardent supporters for the program’s long-term prospects.

The first threat is a group of legal challenges to the law that are making their way through the courts. At issue is what the plain text of Section 1401 of the Affordable Care Act means. Even though the text of the law states that the subsidies are available “through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act,” the Internal Revenue Service (IRS), without congressional authorization, allowed federal subsidies to flow into states participating in the federal exchange when it implemented the law.

At present there are four legal challenges that are based on this issue. In one case, State of Indiana v. IRS, oral arguments were heard in federal district court earlier this month. In the King v. Burwell challenge, the 4th U.S. Circuit Court of Appeals upheld the legality of the IRS subsidies.

The Halbig v. Burwell challenge is currently being re-heard by the full D.C. Circuit Court. The court originally upheld the legality of the IRS subsidies, but the Appeals Court for the D.C. Circuit ruled that the IRS subsidies were not legal in states that did not establish their own exchanges. The Obama administration petitioned the D.C. Circuit for an en banc review, and were granted one, meaning the case will be re-heard and new ruling will be issued.

But a recent ruling on Oklahoma Attorney General Scott Pruitt’s legal challenge to the law, Pruitt v. Burwell, just increased the likelihood that the case might be heard by the Supreme Court. On Sept. 30, an Oklahoma federal district court ruled that the law should be applied as written. This case will eventually be heard by the U.S. 7th Circuit Court of Appeals.

If upheld in appellate court, the ruling could have serious implications for both the law’s implementation in states that did not establish their own health insurance exchanges, as well as the likelihood that the case would be ultimately settled in the Supreme Court. There are currently 34 states that have not yet established state-based health insurance exchanges. If upheld, there will be a conflicting decision among the federal courts – making a Supreme Court decision on the matter necessary.

While these judicial challenges will take many months to be resolved, a more immediate threat to the health-care overhaul has surfaced.

The second threat comes from the law’s impact on the deficit. According to a new analysis by Republican members of the Senate Budget Committee, or SBC, the law is now estimated to increase the federal budget deficit by $131 billion over the next ten years. Not only is this is a far cry from the original estimates from the Congressional Budget Office, or CBO, that predicted the president's signature health-care law would reduce the deficit, but it is a $300 billion swing from earlier estimates that Obamacare would reduce the deficit, if the SBC numbers prove accurate.

There is broad recognition on both sides of the aisle that the U.S. health care system had problems prior to the health care overhaul. But the president’s additional broken promise that he would “not sign a [health care] plan that adds one dime to the deficit, now or in the future, period," as well as the legal challenges to the law, make a discussion of health-care solutions all the more imperative.

Thankfully, Healthcare Solutions Week is a nationwide discussion of how to pave the way forward to best deliver accessible and affordable health care to Americans at an affordable price to both consumers and taxpayers. The looming judicial threats to the law, as well as the revelation that the law will dramatically increase the federal deficit, provide two more reasons why it is time to go back to the drawing board to craft health-care solutions that give greater control to individuals and families.

Naomi Lopez Bauman is the director of health policy for the Illinois Policy Institute. You can follow her on Twitter at @LopezBauman.

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