In a nutshell:

• The Supreme Court of the United States heard oral arguments today in a case that could repeal the Affordable Care Act.
• A sudden repeal of the ACA would be catastrophic for Michigan and the nation.
•  Even absent a repeal of the ACA, the U.S. needs further health care reform.

Earlier today, the United States Supreme Court heard oral arguments in California v. Texas—an attempt to judicially repeal the Patient Protection and Affordable Care Act (ACA) based on legal arguments made by Republican State Attorneys General.

The case hinges on the severability of the minimum-coverage provision (the so-called “individual mandate” and the related penalty removed by Congress in 2017) from the rest of the ACA. If the Court finds that the provision is unconstitutional absent the associated penalty, it would then need to determine if the vast and complex ACA could stand with the individual mandate removed. The Court previously upheld the legality of this minimum-coverage provision in National Federation of Independent Business v. Sebelius.

Today’s comments from justices seemed to suggest the court is likely to again uphold the law and leave it mostly (if not entirely) intact, but the future is anything but certain.

Repeal and Replace?

Conservative opponents have called for the repeal of the ACA (i.e., “Obamacare”) since its passage in 2010. The reality of politics, however, is that it is much easier to wage a rhetorical war over policy than it is to fight battles with material consequences for one’s constituents (such as losing health insurance coverage). Indeed, by 2017, only 8 percent of Michigan voters supported repealing the ACA without a suitable replacement plan.

It was therefore little surprise that calls to repeal the ACA during the 2016 presidential campaigns quickly morphed into suggestions to repeal and replace the ACA in 2017 (when control of Congress and the Presidency shifted). A viable plan to replace the ACA did not materialize, and neither did the votes needed to repeal the ACA.

Few laws get policy solutions right the first time. Certainly, the ACA left room for improvement. Future efforts might be better focused on ways to revise and repair the ACA.

Michigan’s Stake in the Affordable Care Act

In 2017, the Citizens Research Council convened an expert panel to discuss Michigan’s experience with the ACA. Panelists agreed that the Patient Protection and Affordable Care Act meant patients were better protected, even if affordability remained elusive for some. Nonetheless, the ACA’s marketplaces and subsidies, Medicaid expansion, and other reforms have directly led to health insurance for around 1 in 10 people in Michigan, as well as providing more comprehensive benefits and health care consumer protections for others.

Medicaid expansion (i.e., the Healthy Michigan Plan) has been a particular success, not only reducing the number of uninsured Michiganders, but reducing uncompensated care/bad debt in hospitals and other health facilities, yielding state budget savings, promoting better health, and providing broad economic benefits. The combined benefits to the state from the Affordable Care Act have been particularly noteworthy in rural northern Michigan, as well as in some urban centers like Detroit and Flint. Even now, Michigan’s successful Medicaid expansion is attracting the attention of experts from other states.

A sudden repeal of the law would therefore send shockwaves throughout the state, affecting all Michiganders (not just those who access health insurance directly through the Healthy Michigan Plan or an ACA marketplace).

Next Steps for Health Care Reform

Whatever the Supreme Court ultimately decides, it’s clear that discussions of health care reform are far from over; however, it’s unclear if even the simplest reforms could be given fair and honest consideration in a nation with such bitter and volatile political divides.

The Affordable Care Act clearly under delivered on its titular promise of affordability. U.S. health care spending was growing at a rate far in excess of inflation before the ACA’s enactment, and so it would be disingenuous to place the blame for excessive health care spending on the ACA. Nonetheless, despite the ACA’s various reforms, the United States continues to spend far more than other nations on health care with a greater number of uninsured individuals.

Health care spending, in the simplest terms, is determined by the number of people demanding services (i.e., the insured population with health care access), the number of services demanded by each person, and the cost of each service rendered.

Any policy that increases the number of insured individuals will naturally increase health care spending by virtue of expanded access to services. Spending (and the related value of affordability) is contingent upon addressing individual demand for health services and the price charged for those services. These are complex (and often controversial) policy issues.

The price charged for services might be addressed through efficiencies in the health care sector; lowering the costs of providing a service would enable a lower price to be charged. But price in the U.S. health care system also reflects compensation for health care providers and administrators, as well as profit. For instance, research has shown that higher physician fees and compensation drive higher health care prices in the U.S.

The other major factor in U.S. health care spending is the volume of services demanded by each person. This means addressing issues of supply-driven demand in health care and high rates of unnecessary care delivered in the U.S. It also means addressing the social, economic, cultural, and behavioral factors that make Americans less healthy by investing more in public health and social services.

If the Affordable Care Act is struck down, it will be catastrophic for Michigan and the rest of the nation. This kind of catastrophe would require swift federal actions at a time when presidential/congressional commitment to such actions remains uncertain at best.

If the Affordable Care Act is allowed to stand, it will remain in need of revision. Unfortunately, the health of our nation (so far as policy reform is concerned) is contingent upon the health of public institutions and our deeply divided body politic. Fixing health care, therefore, may be contingent upon our ability to first care for the social and moral health of our nation.