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Linda Bergthold Headshot

What's Next for Obamacare?

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The US Supreme Court has upheld the constitutionality of the Affordable Care Act (aka Obamacare). Never mind that 41% of the public polled by Kaiser Family Foundation did not even know that the ruling had occurred.

In upholding the law, the majority (5-4) of the Court declared that for the ~1% of the population that might object to enrolling in health insurance (i.e. individual mandate), the penalty for not buying insurance would be to pay a "tax" that would be managed by the IRS (without any real enforcement power by the way). In addition, the Court ruled that states did not have to accept the federal money that would pay for 100% of the expansion of Medicaid programs to people who earned up to 133% of the federal poverty level ($14k a year for an individual). That means that if you are poor and live in a Red State that rejects the federal money, you may be out of luck in terms of finding insurance at a price you can afford.

The lies and distortions of course began immediately, which is why I am writing this blog -- to set a few things straight. The public, as ignorant of the specifics of the Law as ever, can be forgiven for believing Republicans that this decision is "the biggest tax hike in history." But that is actually an outright lie. Not only does the "penalty/tax" affect very few people -- only those who have no insurance and reject buying it -- in terms of other tax increases, the entire Affordable Care Act increases taxes less than the Reagan tax increase of 1982. Yes, I acknowledge that there are tax increases in the ACA to pay for helping Americans buy health insurance affordably. Those taxes fall mainly on health care providers like hospitals and device manufacturers, as well as wealthy Americans. Is this ruling then the biggest tax hike in history? You should laugh when you hear that. (Thanks to Ezra Klein of the Washington Post and Austin Frakt of the Incidental Economist for the chart below that you can tell your friends to look at if they don't believe you. And there is also an interesting comment section on Austin's page answering some questions about whether or not premiums are included as a tax. Read here. )

2012-07-03-Obamacaretaxchart.jpg

The second biggest lie and distortion is that the Republicans can and will repeal "Obamacare" on DAY ONE if they win the Presidency. First, the President has no authority to do that alone. Second, the Republicans would have to win the House and a 60 vote filibuster-proof member Senate, PLUS the Presidency to totally repeal the ACA. Even the Minority Leader of the Senate, Mitch McConnell admits repeal is unlikely. The main reason that repeal will not be so easy is that the "reconciliation" process applies only to budgetary items with financial impact, and there is much more in the law than just budgetary items. (Read this if you are really interested in the complexities of reconciliation). In addition, the CBO has said that repealing the ACA would add $210 BILLION to the deficit over 10 years. Despite the fact that the country is pretty evenly split about the ACA, people like the individual elements of the law and it would be tricky for Republicans to be associated with overturning some of the most popular parts of the law (see below and here).

What is clear is that over half of people polled in the days after this decision was delivered last Thursday want politicians and the country to MOVE ON.

So what's next, now that the Law has been deemed to be constitutional? The implementation of the ACA is well underway. Some states like California are making great progress in setting up a health insurance exchange for the individuals and small businesses eligible to participate in 2014. Enrollment will start in little over a year. In the meantime, the Law requires insurance companies to do the following -- eliminate lifetime maximums on what your insurance will pay for your care so you don't go bankrupt, keep you on your insurance if you get sick, cover children with pre-existing conditions, and allow your adult children to stay covered under your plan until they are 26 years old. Seniors will continue to get discounts on their drugs until the "doughnut hole" closes in 2020 and they will continue to enjoy preventive care without co-pays. Small businesses can take advantage of the "tax credit" in the law to help their employees get affordable insurance. People who do have insurance will get $1.3 BILLION in rebates from their insurance companies if those companies are not spending at least 80 to 85% of the insurance premium on medical care (not marketing). The list goes on.

Object to Obamacare if you wish. Object to the individual mandate as well. But do not call the mandate the biggest tax hike ever because it is not. And do not go around bragging that if Republicans are elected they will repeal Obamacare. They will not. They will not, especially if the rest of us do our part and vote in November.