Obamacare Lawsuit: Old News Still Making News

Unless you've been living under a rock, you've heard the message: "Legally presumed Obamacare lawsuit delivered by health care reformers finds amenable federal judges and turns into a real live menace to biggest social reform of the last fifty years."

As Yogi Berra said, "It's deja vu all over again."

In September 2015, a federal justice in Washington dictated that the House of Representatives does have legal status to sue Obama's administration over Obamacare. The question is did the administration exceed its constitutionally given powers by providing certain funding for the Affordable Care Act -- popularly known as "Obamacare" -- without Congress appropriating the money.

The issue is still a controversial question. An unfavorable ruling on the merits may paralyze Obamacare as opposed to simply hurting beneficiaries of its advantages.

In the meantime, Obamacare has been whipsawed by partisanism and the poor, elderly and sick are caught in the middle.

Back and Forth

Since ObamaCare was introduced, there has been a good deal of back-and-forth. Between states trying to decide whether or not to set up exchanges and attempts at repealing the ACA from Republicans, tens of millions of Americans are stuck in the middle of the battle.

Those that make up the rope in this tug-of-war are paying more for insurance for themselves and their families each year. The only group to benefit are the health insurance groups, pharmaceutical companies, and their lobbying arms.

There is some good news for Obamacare according to the latest snapshot.

Open Enrollment Snapshot

On January 31, 2016, Open Enrollment ended and approximately 12.6 million plan selections were put in place. Of those, almost 10 million came by way of the HealthCare.gov platform and just over 3 million selected a plan through state-based marketplaces.

Of the ones who obtained coverage through the website, about 4 million are new consumers. That translates into over 40% of all plan selections were from new consumers.

"We're happy to report it was a success," said Sylvia Burwell, Secretary of the US Health and Human Services Department.

Burwell noted that the federal Obamacare marketplace, serving residents in 38 states, was a success based on the numbers of new consumers signed up.

Kevin Counihan, CEO of HealthCare.gov, said, "We knocked the lights out this year."

Burwell told reporters that the final tally of enrollments shows that ObamaCare is a product that people "want and need."

Despite wanting and needing, facts are facts and one unpleasant downside is the rates will rise in 2016.

Rates Rise

Obamacare premiums are planned to rise by 7.5% in 2016.

The question that remains is: Should Obamacare customers expect to pay more or less for their health insurance. The answer, as anything coming out of Washington, is it depends. The new bottom line a consumer may be paying will depend on the state, the plan and the level of income.

While the national average for premium increases is 7.5%, in some states, like Alaska, the jump could be as high as 31%. In Indiana, premiums are projected to decrease by over 12%.

"For the majority of consumers, premium increases for 2016 are in single digits, and they will be able to find plans for under $100 a month," said Kevin Counihan, CEO of the Health Insurance Marketplace. The Obama White House recognizes the Affordable Care Act with helping over 17 million people gain health insurance. The rate of America's uninsured has dropped to below 12%, a historic low.

Those figures don't necessarily reflect young enrollees and other groups who may be shunning enrollment.

Young and Shunning

The news for Obamacare isn't all roses and rainbows. Enrollment of younger, relatively healthy people with a middle-class income is flat and has left risk pools filled with older, poorer people with more expensive health conditions.

The design of the ACA's financial support may be the reason that the only people are buying exchange plans in large numbers are individuals and families whose incomes are below 200% of the federal poverty level -- or roughly $24,000 for a single person and $48,000 for a family of four. Individuals earning under that qualify for tax credits that reduce their premiums and subsidies that are substantially lower.

For individuals over 200% of the FPL, exchange plans usually contain too little benefit to be worth the cost. For instances, a family of four living in Daleville, Virginia, headed by a 40-year old couple with $60,000 in income will face a $5,000 annual premium after applying a $5,000 tax credit and taking a $5,000 deductible for the second-lowest cost available through the exchange. Each new dollar of earnings will diminish the tax credit more by about 14 cents. If this family's earned income is above $97,200, they would not qualify for a tax credit in any form.

Despite this, many enrollees will see savings on their health care.

Financial Savings

Roughly 80% of the individuals who selected a 2015 Marketplace plan managed to qualify for financial aid and the average tax credit for enrollees who qualified for financial assistance was $270 per month.

Based on current HHS analysis, almost 80% of returning consumers will be able to buy a plan for $100 or less after tax credits and 70% will be able to buy a plan for less than $75.

For the 2015 enrollment, over 50% of consumers who re-enrolled shopped around and half of those selected a new plan. The typical consumer who switched plans saved money on their net premium. Those who switched plans within the same tier saved, on average, almost $400 on their 2015 annualized premiums compared to those who remained in their same plan.

Special Enrollment Remains

Open enrollment for 2016 is closed, but special enrollment remains for people losing their coverage due to loss or change of employment and individuals undergoing other significant life transitions. Insurers have declared that special enrollment terms have drawn higher-risk enrollees and some insurers have ceased giving commissions to agents as a way to stem special enrollments.

If buyers are incapable of enrolling through the special enrollment period, the marketplace will not allow new buyers to join. As Sarah Lueck, a Senior Policy Analyst at the Center on Budget and Policy Priorities recently pointed out, insurers that wish to stabilize the risk pool need to encourage more, not fewer, enrollments. If special enrollments continue to be blocked, observers expect to see marketplace registration dropping steadily with a simultaneous increase in the quantity of uninsured.

The struggle between Congress and the Administration will continue, and activists will continue to point out promises made by the nation's founding fathers.

The US Constitution's Preamble promises American citizens that the nation's elected officials have an obligation to "insure domestic tranquility, provide for the common defense and promote the general welfare."

By failing to offer a free, common, nationalized healthcare system to Americans, the U.S. Constitution is not being upheld. Instead of promoting the "general welfare," the population is being forced to pay exorbitant amounts to for-profit health insurance companies.

A national health care system for all American citizens to access, free of charge, should be a right guaranteed to everyone and not something reserved for only those who can afford it.