The Biggest Legal Challenges to Obamacare

The Wire outlines the biggest legal challenges to Obamacare:

Federal exchange states aren’t eligible for tax subsidies: Because the Affordable Care Act only specifically mentions subsidies for exchanges “established by the state,” the federal exchange can’t grant subsidies.

Tax laws should be introduced in the House, not the Senate: The argument was that Obamacare violated the Origination Clause of the Constitution, which says that bills for raising revenue have to originate in the House and basically piggy backs off the conservative talking point that Obamacare is a tax, not a law.

Contraceptives coverage defies religious freedom: The contraceptives mandate doesn’t make or break the law, but it’s a blow to women and women’s rights activists.

If religious employers are exempt, nonprofits like schools should be as well: The University of Notre Dame re-submitted a lawsuit over Obamacare that was originally rejected in January.

Obama might be “rewriting his own law”: Technically this isn’t a legal case, but the House Judiciary Committee will review those arguments, as well as the legal case against subsidies.

Obamacare May Finally Cut Health-Care Costs

James Surowiecki makes a convincing argument that Obamacare is helping to usher in “deeper structural changes in the health-care system” that ultimately will control costs for all.

“Hospitals and doctors have typically been paid on a fee-for-service basis … Insured patients have paid only a small fraction of the cost of their care, and insurers have just passed costs along to their customers. Employers and the government, meanwhile, have been left to foot the bill.”

Said investor Jason Yeung: “What we’re moving toward instead is a world in which everybody in the system is sharing financial risk … And therefore everybody has an incentive to control costs.”

“The Affordable Care Act is also helping hold down costs by changing incentives for hospitals and doctors.”

“What all these initiatives have in common is the idea that health-care providers are going to be paid based on the value they deliver, rather than on the services they perform.”

More Good News for Obamacare

According to the National Journal, “a new report released by the Centers for Medicare and Medicaid Services Tuesday shows that more than 1.46 million people were determined in October to be eligible to enroll in Medicaid or the Children’s Health Insurance Program.”

The good news: “In states that are expanding Medicaid, applications jumped 15.5 percent.”

And the better news: An increase in Medicaid applications even in states that are not expanding Medicaid. “Applications to Medicaid and CHIP agencies increased 4.1 percent in October over the previous few months.”

Young Americans Least Familiar With Obamacare

According to a new Gallup poll, “Americans younger than 30, a key group targeted by the Affordable Care Act, continue to be the least familiar with it. Another important group, those with lower incomes, are less familiar with the healthcare law than are those with higher incomes.”

“Republicans across the country are significantly more familiar with it than are Democrats. This could reflect the desire among those who are most emotionally opposed to the law to know more about it, or underlying differences in attention to news across party groups.”

“Those who are familiar with the healthcare law are significantly more likely to oppose it [(40% approving; 59% disapproving)] than those who are not familiar with it.”

“Those who are unfamiliar with the law are evenly divided, with 41% approving and 43% disapproving.”

One in Four Uninsured Prepared to Pay Fine

According to a new Gallup poll, “a substantial minority [of Americans], currently 28%, say they are more likely to pay the government fine imposed for not having insurance. The percentage planning to pay the fine has changed little in the last month, even as the 2014 deadline for having insurance draws nearer.”

“Importantly, the percentage planning to pay the fine is not skewed toward younger uninsured Americans — 26% of the uninsured under age 30 say they are more likely to pay the fine, compared with 30% of those aged 30 and older.”

“The biggest differences appear by party identification — 45% of uninsured Republicans plan to pay the fine, compared with 31% of independents and 15% of Democrats.”

Implications: “The biggest challenge to achieving universal coverage … may not be in making Americans aware of the requirement or in getting younger uninsured Americans to sign up. Rather, it may be getting those likely to oppose the law, namely Republicans, to overcome their ideological opposition to the law and sign up for insurance.”

Five Key Questions on Obamacare's Future

Sean Sullivan lists the five biggest political questions for the next phase of the Obamacare battle:

  1. Can Obama be an effective advocate for his law anymore? Obama knows he needs to regain the public’s trust and good will gradually. It’s not going to happen overnight.
  2. Will the Republicans stay out of their own way? If the Web site problems fade from the forefront, the policy discussion will dominate once again. The question then becomes whether conservatives will restart their crusade to repeal the law.
  3. Will congressional Democrats begin to fall in line or move further away from the law? What the White House needs is a unified party with a consistent message regarding the health-care law. That’s not what they have now.
  4. Will enrollment bolster the Democratic case or the Republican one? [Low enrollment numbers] will fuel Republican arguments that the law is a disaster. [High numbers] will bolster the administration’s case that people want the new coverage options. Young people in particular are a crucial demographic.
  5. Will the GOP embrace an alternative? The fact that [House Speaker John] Boehner isn’t committing to [a GOP alternative] right now suggests the GOP believes its best play is to keep the focus on the Affordable Care Act.

Obamacare a 'Moral Triumph' But Drone War a 'Moral Failure'

In his argument against U.S. drone attacks, Eugene Robinson agrees that they “may be militarily effective, but they are killing innocent civilians in a way that is obscene and immoral.”

“Armed, pilotless aircraft allow the CIA and the military to target individuals in enemy strongholds without putting U.S. lives at risk. But efficacy is not legitimacy, and I don’t see how drone strikes can be considered a wholly legitimate way to wage war.”

“Under what theory, then, does the president order drone strikes in countries such as Pakistan, Yemen and Somalia, with which we are not at war? It would seem the definition of ‘enemy’ is, basically, ‘someone the United States decides to target.’”

“I believe historians will look at Obama’s second term and see the implementation of the Affordable Care Act, despite its rocky launch, as a great moral triumph. I fear they will see the drone war as a great moral failure.”

Is it Fair to Compare Healthcare.gov With Amazon.com?

Acknowledging that one way to assess Healthcare.gov’s progress is to compare its performance to commercial websites, Jonathan Cohn provides “two very important caveats”:

One is an acknowledgment of the huge, fundamental difference between what the two types of systems must do. Innovative companies like Amazon are … still engaging consumers, producers and retailers in a series of relatively straightforward transactions. And they are using technology that, for the most part, has been around for a long time.”

“Healthcare.gov, by contrast, must perform a whole series of complex transactions [and] communicate with multiple government agencies, at both the federal and state levels, as well as private insurers.”

Two: “If we’re going to compare the process of buying health insurance at healthcare.gov to the process of buying books at Amazon, we should also compare it to the process of buying health insurance before Obamacare came along … Without the law’s requirements on essential health benefits and simple use of metal tiers to describe plan generosity, there was always the risk of buying plans with major gaps in coverage—the kind that only relatively sophisticated consumers understood to check.”

Obama Links Obamacare With Economic Security

Selecting one of the poorest Washington D.C. neighborhoods to deliver today’s speech, President Obama intends to highlight income inequality and wage stagnation as a threat to this nation’s economic security.

The White House statement: “President Obama will discuss the twin challenges of growing income inequality and shrinking economic mobility and how they pose a fundamental threat to the American dream, [and he will detail] the steps … taken to help reverse these trends, restore mobility and increase economic security for every American, including the economic benefits of the Affordable Care Act.”

The New York Times: “After being on the defensive for weeks about the health care program’s malfunctioning website and his own faulty promises, Mr. Obama previewed his economic case for the Affordable Care Act.”

Obama: “For too long, few things left working families more vulnerable to the anxieties and insecurities of today’s economy than a broken health care system … Now that the website is working for the vast majority of people, we need to make sure that folks refocus on what’s at stake here, which is the capacity for you or your families to be able to have the security of decent health insurance at a reasonable cost.”

Pensions Not Safe Under Detroit Bankruptcy Protection

The New York Times reports that Detroit – once the fourth largest city in the nation, and now mired in debt – was granted bankruptcy protection on Tuesday.

“In perhaps the most contested portion of the case, the [federal] judge made it clear that federal [Chapter 9] bankruptcy law trumps the state law when it comes to protections for public employees’ pensions, making the pensions of 23,000 retirees fair game for the city to include in its plan of adjustment. But while the judge said pensions could not be treated differently from other unsecured debt, he said the court would be careful before approving any cuts in monthly payments to retirees.”

“Appeals were expected to be filed quickly. At least one union filed a notice of appeal on Tuesday, and other unions and pension fund representatives said they were considering contesting the outcome as well.”

A spokesman for the Detroit Police and Fire Retirement System commented: “This is one of the strongest protected pension obligations in the country here in Michigan … If this ruling is upheld, this is the canary in a coal mine for protected pension benefits across the country.”

Illinois Unions Poised to Battle New Pension Legislation

The Wall Street Journal reports that “[Illinois] state legislators passed an overhaul of the public-employee retirement system Tuesday, cutting benefits for workers and retirees in a move that sets up a likely court battle with organized labor.”

“Illinois has seen its credit rating fall in recent years to the lowest among U.S. states as it has struggled to address a gap in its pension funds that is nearing $100 billion.”

“Now, union leaders are gearing up to fight. Labor leaders expect to sue the state, arguing benefits promised to employees and retirees are protected under the state constitution.”

“To date, unions have successfully argued that government workers shouldn’t be punished for decades of mismanagement by the state, which underfunded the retirement system. But union leaders have seen support erode as concern over the state’s finances grows and their sway in a statehouse dominated by Democrats ebbs.”

Tougher Restrictions for Banks Under 'Volcker Rule'

According to The Wall Street Journal, “federal regulators are expected next week to approve a toughened version of the so-called Volcker rule, ending years of wrangling over the controversial provision of the Dodd-Frank law and opening a new phase of stricter oversight for Wall Street.”

“The 11th-hour talks are expected to result in tougher restrictions on hedging—beyond what regulators had agreed to just a few weeks ago.”

The tougher restrictions are endorsed by CFTC Chairman, Gary Gensler, and SEC Commissioner, Kara Stein, who argued   that “the rule gave banks too much leeway in how they were allowed to tie hedges to other positions at the bank.”

“The worry: Banks could enter trades loosely tied to those positions that were actually designed to post a profit, giving them a back-end way to continue engaging in proprietary trading. To reduce that risk, the two officials pushed for requirements that hedges are specifically tied to the risk of losses.”

“The rule is expected to require banks to tie hedges to specific risks, such as interest-rate, currency or foreign-exchange risk.”

Latest Obamacare Stats Are Positive

Sarah Kliff gives us the latest on Obamacare:

  • “There were 1 million visitors to HealthCare.gov Monday, [and] 380,000 visitors as of noon today,” a slight increase from Monday’s 375,000 visitors.
  • “Approximately 13,000 shoppers Monday ended up in the queuing system,”  with 60% choosing to return to Healthcare.gov.
  • “Still no 834 error rate,” despite the “Washington Post’s report this morning that approximately one-third of the 834s sent so far had errors.” Medicare spokeswoman, Julie Bataille, replied, “I can tell you that does not reflect an accurate picture of what is happening right now…we’ve made tremendous progress and will certainly work to fix any standing issues.”