Kitchen Table Economics

How Would Supreme Court Ruling Against the ACA Affect Your Health Care?

Hospital Hallway

The United States Supreme Court began hearing oral arguments in King v. Burwell, a case that challenges the federal health care subsidies established by the Affordable Care Act. The law says pretty simply that these subsidies – or federal government help to pay for coverage – are only for those who sign up on exchanges “established by the state.”

The problem is that some states are still getting these federal subsidies even though they did not set up their own state exchange.

Given that these exchanges are at the heart of the ACA, a victory for the law’s opponents could significantly alter the health care system in this country.

1)      Lower health care costs

The problem with the ACA isn’t what it tried to do, it’s what it failed to do– control costs. In fact, premiums are expected to rise by double digits in most states this year. In some areas, rates may spike by as much as 35%. Some patients – like those with preexisting conditions – may pay less under the ACA, but most still face the same – or worse – price hikes than before the ACA.

The ACA has thousands of regulations, taxes, and mandates, all of which distort the market and drive up cost.A Supreme Court ruling against the law could be the first step in finally bringing down the cost of health care and bringing millions of Americans some relief.

2) Better access to healthcare

Although the Affordable Care Act was touted as a solution to providing coverage for the 40 million American’s who lacked insurance, the results have been lackluster. So far the Affordable Care Act has covered less than one fifth of America’s uninsured population.

Reforming the ACA could improve access in the same way that privatized grocery stores improved access to food in the former Soviet Union after the fall of the Berlin Wall. In other words, history has shown the best way to improve access to goods is through a functioning market, not government overreach.

3) Better healthcare

Better access to health care does not mean better health care. Just ask the citizens of Venezuela or most other countries with socialized medicine where everyone has access but only the elite get care. A landmark study on Oregon Medicaid patients illustrates this: Economists found no significant improved health outcomes among those on Medicaid versus those with no insurance.

A victory for ACA opponents in the current Supreme Court case would allow doctors and patients to spend more time focusing on care rather than complying with government regulations. (Currently doctors spend about 10 hours a week doing paperwork and administration, time that otherwise could be devoted to improving health outcomes of their patients.)