Health Reform After SCOTUS

Nelson Mullins LLPJuly 20, 2012

Joseph R. Antos, Ph.D.Wilson H. Taylor Scholar in Health Care and Retirement PolicyAmerican Enterprise Institute

Do we really have to eat it?

…and does it matter?

AEI

Guaranteed issue, community rating without ~full participation → selection spiral

IRS authority limited by ACA Behavioral economics vs. simple arithmetic

Subsidized premiums = 2% to 9.5% of income (plus inflation plus “excess” premium growth in 2019+)

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Mandate penalty/tax remains weak

Year “Tax”2014 $95/1% of income2015 $325/2% of income2016 $695/2.5% of income

2017+ 2016 rate + inflation

A moot point?

Can the federal exchange distribute subsidies?Will the federal exchange provide “1-stop shopping”?Is it a state exchange managed by the feds?

Medicaid typo? Exchange subsidies for 100-133% FPL?

◦ Premium = 2% of income◦ Cost-sharing credits = 94% of plan value◦ State cost = $0◦ Medicaid: State cost = 5% in 2017 → 10% in 2020+

AEI

Lame duck, lamer than usual Romney: Repeal and replace?

◦ Reconciliation◦ What goes, what stays under a new name?◦ How much has already changed?◦ Put health subsidies on a real budget

Obama: The economy is in charge, not him◦ Replay of Budget Control Act, but with teeth

Major spending cuts—including Medicare, Medicaid, exchanges

Reality that ACA is not ready for 2014 prime time Devolution to the States

◦ Difficult balance with short-term “stimulus”

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What happens next?

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Don’t worry……Congress will work it out