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Obamacare's final test: it survived the Supreme Court and it's here to stay

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The Supreme Court upheld Obamacare's subsidies in King v. Burwell, continuing financial subsidies for 6.4 million Americans.

If the challengers had won, it would have thrown the health-care law into chaos. But the White House prevailing marks something equally momentous: President Obama's signature legislative accomplishment is actually, really, definitely here to stay.

"This Court challenge [was] the last point at which it seems really like the law could completely go away," says Larry Levitt, a vice president at the Kaiser Family Foundation.

Politically, momentum to repeal Obamacare is waning. Legally, Obamacare opponents are simply running out of ideas. And perhaps most importantly, Obamacare now has a large and growing constituency: an estimated 10.2 million Americans get coverage through the health law's marketplace (and millions more through Obamacare's Medicaid expansion).

"It's a monumental step," says Ron Pollack, executive director of the pro-Obamacare advocacy group Families USA. "It means that the ACA is a permanent part of the American health-care system."

Obamacare's secret weapon: its enrollees

In the past five years, there were arguably three moments that seriously imperiled the health-care law's future:

  • The 2012 Supreme Court case challenging the law's mandate to purchase health insurance as unconstitutional
  • The 2012 presidential election, when Republican candidate Mitt Romney promised to immediately repeal the health-care law if he won the White House
  • The disastrous rollout of HealthCare.gov in late 2013, when the White House struggled to build a website where Americans could actually purchase health plans

What separated those moments from this one is that during all those challenges, Obamacare was an abstraction, with few real beneficiaries.

There were certainly the Beltway advocates who had lobbied hard for the health law's passage. But the health law's big program — an expansion of insurance to millions of Americans — was still hypothetical. Nobody had actually signed up for Obamacare; they couldn't until 2014. Obamacare enrollees, back then, were about as numerous as unicorns.

Now Obamacare has an army: more than 10 million Americans get coverage through the health law's marketplaces, and millions more through Obamacare's Medicaid expansion.

"In 2012, it was still all hypothetical," Kaiser's Levitt says. "There's a real difference between taking away subsidies some hypothetical person might get in the future versus real people who are actually getting that help."

Future legal threats look less menacing

supreme court

(Getty News Images)

Even if politicians back off repeal, it is possible that other lawsuits could rise through the court system without the backing of the political establishment — much in the same way King has.

But Obamacare opponents are quickly running out of health law provisions to challenge. Killing the individual mandate would be one way to cripple the insurance expansion. If healthy people weren't required to buy coverage, only the sick people who really needed coverage would be likely to sign up — and their high medical bills would send premiums skyrocketing. But the Supreme Court upheld the mandate in 2012, declaring the requirement to purchase coverage constitutional.

The King suit could have taken down another important part of Obamacare, too: the financial subsidies. If the plaintiffs had prevailed, the Kaiser Family Foundation estimated that premiums in states that didn't set up their own insurance marketplaces will spike 256 percent, making insurance unaffordable for many enrollees.

The result would have been a classic insurance "death spiral." As premiums became unaffordable, the enrollees who need health insurance least —the young and the healthy — would flee, which would send premiums rocketing yet higher.

king v burwell subsidies

But with the King case now dead, that only leaves more minor Obamacare provisions open for attack — not the type that would cause the market to implode altogether.

These would be lawsuits like the one challenging Obamacare's birth control mandate, which won at the Supreme Court last summer. That decision did go against the health-care law, but had a relatively minor effect: the administration was able to figure out a work-around policy to ensure birth control coverage for most women.

Obamacare is guaranteed to face additional legal challenges. There's one, for example, that House Republicans have brought challenging additional financial help for the lowest-income enrollees as illegal. But that lawsuit, Pollack says, "is not of the same magnitude. It's important, but it couldn't have the same impact in undermining the statute's architecture."

"You can't just return to the health system of 2009"

As more and more people sign up for Obamacare — the Congressional Budget Office expects 24 million people to sign up by 2024 — the politics of repealing Obamacare become worse and worse. The constituency that the law has already developed just keeps growing.

This helps explain why Republicans are tripping over themselves to come up with plans to replace Obamacare's insurance subsidies should the Supreme Court rule against them. Those proposals implicitly acknowledge that it would be bad for Republicans to allow millions of Americans' tax subsidies to dry up, even though legislators still staunchly oppose the law.

Obamacare is delivering health care to millions of people. As Republican strategist William Kristol recently told my colleague Ezra Klein, legislators now "need a credible alternative. You can't just return to the health system of 2009." In a world where the White House wins in King, there just isn't a good way to go back on Obamacare.