Island News: The Supreme Court Expanded Health Insurance Coverage

“This Congress or the next could address this issue on a bipartisan basis and keep the debate over the ACA and substantive health care policy where it belongs—in the halls of Congress.” -Katie Keith, Health Affairs blog

The opening sentence in the Atlanta Journal & Constitution front page piece will tell us that “Republican efforts to dismantle Obamacare backfired”. Buried in the middle of the article will be mild mention of a remote island newspaper ignoring the political clutter and explaining the underlying dynamics several years earlier.

I am referring to 2024 comprehension and reporting of the implications of a potential Supreme Court ruling in 2021; we will not understand the implications of the court ruling on the mainland in 2021, because the people we listen to on such matters will not see it coming and will not report it. As Holman Jenkins astutely describes the modus operandi of those people whom he courageously admits includes himself, “Instead of letting the evidence or lack thereof guide us, we adopted the attitudes of public figures whose political, cultural and social status we wished to emulate”.

The criticism is targeted toward members of the mainstream media, but it also applies to the health policy wonks (whose purported subject matter expertise should relegate them to a higher standard) who have dismissed technical assessments of policy implications in favor of lazily ascribing results to perceived political motivations. Rather than receiving correction, their stale narrative is almost always affirmed by their like-minded colleagues and rewarded with acceptance in the political class.

Accordingly, we will not hear about the Supreme Court expanding health care coverage until we experience expanded health care coverage, and the evidence is no longer possible to plausibly deny; at the same time, we will be told how “the experts are surprised” while the publicly available literature that correctly explained the likely implications was regarded as obscure and summarily ignored as island puffery years ago. We have seen this play out many times before. We will see it again.

If you have preconceived, intractable beliefs that everything one political party does enhances health coverage and everything the other party does diminishes it, please do not read beyond the introduction of this article. It will be a waste of your time. You have not paid attention to the evolving market dynamics of Obamacare, more formally known as the Affordable Care Act (ACA). You are not interested in expanding your understanding of the ACA; you are seeking confirmation of what you already believe, and my island friends and I simply have nothing to offer you. But do not despair. You can continue to freely live comfortably on the crowded mainland and readily find confirmation of your fantasy belief system at any Midtown office or any bar in Buckhead. If that is what you want, it is easy to find and very few people will fault you for it. If accuracy is not your priority, the familiar mainland probably suits you best. You will be accepted there, you will not attract undesired attention, and you will always be blessed with a lot of company.

On the other hand, if you are tired of stale, conformist city thinking and want to join me on an exploration of legal possibilities and health coverage implications untethered from political talking points, your getaway to my little island is welcome. I will warn you; it can be desolate at times and we receive occasional missile strikes from the mainland, but they are mostly harmless. Life on the island is less complicated; it is simpler and there is little confusion because we don’t have to massage objective truth into mainland politics; the hardest part for newcomers is unlearning that mainland practices do not work here, and our people will recognize your blind spots if you slip and resort to mainland thinking.

Before deciding to pack your sunscreen and hop on the MARTA train to Hartsfield, be forewarned that there are real costs associated with the travel benefits. Your venture away from city thinking will pair your rewards with some scrapes and the consternation of envious friends. Perhaps a local band best described the ramifications of jetting away from the mainland groupthink and flying to a remote, objective health policy locale, “Nobody said it would be fair; They warned you before you went out there; There's always a chance to get restarted; To a new world, new life; Scarred…, but smarter”.

Texas v. California, Political Narratives, and Reality

The passing of Supreme Court Justice Ruth Bader Ginsburg months before a presidential election ignited postulation of multiple concerns. Questions were raised about the appropriateness and timing of nominating and confirming a candidate to fill a vacant seat. After President Trump nominated Amy Coney Barrett, Congressional Democrats, led by Senator Charles Schumer who had threatened two Supreme Court justices without a hint of provocation a few months prior, utilized her confirmation hearing as election ammunition to bizarrely portray her customary nomination as a deliberate attack on the ACA. Serious ACA advocates and respectable members of the legal profession were appalled by the blatant mockery of what should be a respected constitutional process.

The highly publicized court case Texas v. California, still a threat to the ACA only because of deliberate Congressional inaction rather than the orderly filling of a court vacancy, alluded to in the attacks on Barrett was falsely portrayed as a political battle rather than a straightforward understanding of injured plaintiffs seeking to recover from damages. The justices will view the facts from a legal rather than a political perspective, and we would be wise to see the case through a similar lens. A shift to island understanding enables us to envision a plausible ruling, one that provides relief to plaintiffs but does not necessarily align with anyone’s perceived political desires.

The substance of the case revolves around the “individual mandate”. The ACA created a health insurance requirement to maintain “minimum essential coverage”. In a separate section of the law, a “shared responsibility“ penalty is levied on individuals for not complying with the individual mandate. Some people are exempt from the individual mandate; others are subject to the mandate but exempt from the shared responsibility penalty. Most people are subject to both, which causes them to be thought of as working in tandem, but it is important to understand they are distinct parts of the law. In a 2012 Supreme Court ruling, the individual mandate, not the shared responsibility penalty, was ruled unconstitutional. As the mandate was determined by Congress to be “essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue”, the unconstitutional nature of the mandate put the entire law at risk.

In a 5-4 decision, Chief Justice John Roberts utilized a “saving construction” to fuse the different sections of the law to allow the combination of the individual mandate and the shared responsibility penalty to be viewed as resembling a tax within the Constitutional authority of Congress. With a nonzero penalty being legislatively removed at the end of 2017, the mandate’s disguise as a legitimate tax scheme is no longer effective. Hence the current lawsuit.

An unconstitutional law that hurts millions of people (any discerning person will acknowledge this harm while also acknowledging the ACA helped millions of people, or you can easily multiply population and percentages from surveys if you lack discernment) will unsurprisingly be challenged; relegating the court battle to a mere extension of politics is not a serious characterization of the legal challenge and limits understanding of potential judicial outcomes. We should not, however, be surprised with efforts to politicize the court deliberations. Blatant admissions of not confirming nominees and promotion of “court packing” to achieve political goals exposes a brazen intent to misuse judicial bodies to achieve political aims. The continuous politicization of ACA mechanics (e.g. Obama shortening enrollment period “improved the risk pool” but Trump shortening enrollment period “reduced enrollment opportunities”) in the public sphere is reflective of the larger misguided thinking around the ACA. Viewing ACA dynamics through a political lens has always been a well-traveled path to confusion and poor comprehension of the law’s dynamics. The mainland gibberish surrounding the elements of Texas v. California is not any different.

Ignoring for a moment the broader truth that it is always dangerous to associate ACA policy implications with purported political goals, the conventional political thinking driving misunderstanding is, of course, that Democrats support the ACA and Republicans oppose it. In fairness, that was generally true ten years ago. When Republicans gained control in 2017, we (not all Americans) “anticipated that the remaining days of the ACA experiment were numbered”. The House quickly passed a replacement bill which President Trump called “mean”, and the Republican Senate start dinking around with legislation that looked a lot like, well, a lot like Obamacare. It was a mere five months into the Trump presidency when some of us realized Republicans were not going to get rid of Obamacare, but they surely were not going to make a formal annoucement to that effect and the mainstream media was not going to blow their cover. Continuing the narrative of aligned policy and political talking points was so much easier to keep straight for the politically-based media.

Some voices on the island and the mainland thought the conversation would become more productive after the 2020 election and facilitate more transparent understanding of the improvements in ACA markets. In September I predicted, “Expect misrepresentation of the implications of Trump's policies to continue through election day, and a massive shift in the narrative the day after the election in the middle of the open enrollment period. Markets are much stronger today. They don't want you to know. Yet.” In October, Paige Cunningham, health reporter at the Washington Post, concurred, “If Biden wins, it will be interesting to watch Democrats flip back to applauding improvements in the ACA marketplaces instead of ignoring them.” We were wrong.

How did we arrive at this “Emperor has no clothes” environment where falsehoods about the ACA are culturally accepted? It was not an election sideshow; it was a new normal. Let's review how we got here. Through regulatory action and a legislative tax bill, President Trump made the ACA work better for people whom it worked for and provided other options for those whom it did not. His critics chastised him for both and warned of marketplace doom while misrepresenting the Congressional Budget Office analysis as a premium increase rather than a consumer subsidy boost; the resulting strengthened marketplaces and improved popularity (for all income groups) quickly quelled further repeal discussion. While Republican repeal voices quieted, Democratic voices grew louder, not to praise the improved market conditions, but to attempt to disconnect policy results from policy actions for unashamedly political reasons.

When asked about the improved marketplaces, Senator Ron Wyden, the father of little-used Section 1332 waivers but an opponent of President Trump loosening Obama’s waiver requirements to be attractive toward state innovation, said “Trump has spent his presidency waging war against all opportunities to expand coverage and lower premiums in Obamacare. Attributing any improvement to the president is one of the biggest lies yet.” Leslie Dach, Chair of Democratic-aligned Protect Our Care, likewise said that “the administration deserves zero credit for the success of the ACA”. President Obama, whose last full year was the ACA’s worst, had said if President Trump had a better idea to improve the marketplaces, he would be the first to say “That’s great! Congratulations!”. He never acknowledged the market improvement (which would likely have spurred better coverage and understanding) and remained largely silent, as did much of the usual mainland voices.

There was the occasional sentiment of a “surprisingly good year” from Vox as the uninsured rate reversed its post-ACA climb, which was surely embarrassing to Politico’s mainland thought leader who decided to boldly predict the “worst open-enrollment season ever” accompanying the “life raft” premium subsidy boost. A year later, Politico accepted my invitation to the island and acknowledged “Obama is stronger than ever”; us island folks are gracious and forgave them and did not print what followed the acknowledgment, which should have stood on its own. Politico also inspired an island news article; apparently their first island visit was harmless enough that they decided to return. I hope that encourages you to visit.

Unfortunately, a majority of mainland voices went dormant for a few years or manufactured this weird notion of ACA resiliency in an imagined battle as markets improved as a result of 2018 policy changes. To be crystal clear, ACA markets did not stay the same despite harmful 2018 policy as a natural understanding of “resilience” would suggest; staying the same would have been problematic. Markets improved specifically because of 2018 policy; there is a transparent view that is easy to recognize if you get far enough away from the city fog. On a rare day, the wind picks up enough on the north shore of the island to accommodate the pursuit of islanders’ sailboard hobbies. A running joke that we tell visiting mainlanders is that our sailboards are resilient to harm from the damaging wind; they rarely laugh.

The COVID-19 pandemic provided distractive relief and a welcome cover to change the discussion, and it occupied most of the mainland conversation through 2020. Politico even tried to replace the rationale of insurers returning to the ACA marketplaces (which began in 2019, after 2018, of course) because of the improved regulatory dynamics with “Coronavirus drives health insurers back to Obamacare”, referencing United Health Care entering an attractive ACA state with the highest average ranked marketplace in the country the last two years.

The Island News did not waver from ACA coverage in 2020, but occasionally had to drift into the COVID-19 weeds where market misrepresentations were just as rich. After a favorable review of premium dynamics and premium alignment efforts in a large state, we reported that 2021 would be the ACA’s best year in October, noting mainland voices would later deflect and proclaim “it must have been extra attention due to the election or the court case, or something to that effect”. We were ecstatic about 2021 on the island, but it was expectedly ignored on the mainland until the improved premium dynamics could be attributed to “Biden’s Special Enrollment Period (SEP)”. One fellow even said, “this is what it looks like when the people in charge of 'Obamacare' want to enroll as many people as possible."

Biden had campaigned on the SEP scheme prior to the Annual Open Enrollment Period (OEP) in November-December. It was effectively an awkward extension of the OEP. A longer OEP does not increase enrollment; it merely delays it. If longer enrollment periods attracted more enrollment, we would not limit them in the first place. SEP games are not seriously policy, and the promotion of this coronation SEP and the fawning media attention unfortunately distracted mainland readers from understanding the real market improvements in 2021.

Even as President Trump inherited ACA markets at their worst and left them at their best, the traditional battle lines continued to be portrayed in 2020 Republican primaries and the media enjoyed prolonging the conventional narrative of an anti-ACA Republican party, but serious observers had moved on to reality long ago. Since the summer (pardon me, Q3) of 2017, my professional efforts have been transparently communicating ACA dynamics, fostering stronger compliance through Focused Rate Review, and promoting consumer equity; others have joined me and we are making progress amidst the tired noise of “the ACA is like a starter home” and “Republicans want to take health care away”. The truth is that ACA markets are stronger than ever in 2021, primarily because of the subsidy recalibration in 2018 but also other changes, and they will grow even stronger if federal lawmakers would simply have the discernment and patience to leave them alone until they have a basic understanding of the current environment. When they do, we will hear fewer haphazard proposals without targeted solutions that would create problems and often have the opposite impact of what is intended.

I am not at all concerned about Republicans’ disruption; I am concerned about Democrats. The truth is that serious Republican legislative efforts to repeal the ACA ended at a party lunch in June 2017. Democrats continue to attack the ACA through a party platform of government-induced poaching of the ACA’s core constituencies and recalibrating subsidies to lower value (portrayed as higher [which is temporarily the case in most  states where premium are misaligned] while acknowledging not universally true) plans, as well as Congressional action and inaction. The Congressional unwillingness (primarily from the political party that claims to be ACA champions) to address the court case is inexplicable and reckless, and a court ruling could dismantle the ACA or alternatively strengthen individual health insurance markets and enhance popularity to a level that Congressional Democrats would not be able to overcome. I will repeat that; Democrats can likely dismantle the ACA now, but a Supreme Court ruling could strengthen the law and market popularity to a point that there would not be the political will to do so. It is potentially a risk they have not considered. The reality of the potential court case outcomes is perhaps stranger than the intractable mainland allegiance to political narratives.

A Fortuitous Ruling for Insurance Consumers

If the individual mandate is ruled unconstitutional again, plaintiffs John Nantz and Neill Hurley are due a remedy for the harm caused by an unconstitutional mandate to purchase overpriced (not “actuarially fair”), poorer quality (Mr. Hurley’s experience) health insurance products. A necessary remedy does not include interference with Medicaid expansion or the ACA exchanges. Addressing the law’s unbalanced subsidy distribution and resulting high premiums goes beyond direct remedy to the plaintiffs. The plaintiffs simply need to be freed from the mandate and able to purchase reasonably priced insurance as they could prior to the ACA. It is quite possible that the Supreme Court will strike the individual mandate and allow insurers to offer major medical insurance products that do not comply with ACA’s community rating rules, which are not being enforced by the way. If you think I am overstating the degree of noncompliance, read the Colorado law authorizing the insurance commissioner to enforce ACA community rating rules and get back to me with why the state passed such a law. Seriously, please do. I have yet to hear another explanation.

What would the Supreme Court have to contemplate to allow a market that is not community rated to exist alongside a supposedly community rated ACA market? I am an actuary, and people expect me to launch into a classic risk pool discussion and say that this would cause ACA premiums to rise because all the healthy people would be in the non-ACA market and the ACA would be left with the sick people.

My response to the multiple market environment question before the court is two-fold, legal and actuarial: (1) Legal - So what? The residual price impact on ACA markets is irrelevant to the plaintiff’s interest or the court’s concerns. Plaintiffs’ remedy should be based on the law, not the purported underlying politics or the justices’ actuarial projections of what may happen to ACA markets. (2) Actuarial – ACA premiums may not rise. Contrary to the common narrative, markets competing with ACA-compliant markets are not more attractive simply due to health status. ACA net premiums are heavily skewed by age and income, and ACA markets will continue to attract millions of older and lower-income people, particularly with the enhanced premium subsidies stemming from actions by President Trump followed by President Biden; unsubsidized, underwritten markets are unable to effectively compete against free or near-free ACA coverage for millions of people. Consequently, ACA markets will be just fine; the fearmongering around competing market concerns is disingenuous.

Other markets may attract higher income people, who are the sicker minority in the ACA risk pool and an obvious segment of the uninsured population. It is possible that the ACA risk pool may improve, but it best understood that mild competition from other markets is unlikely to have a significant impact in either direction. Most ACA observers gloss over the transparent fact that we already have competing markets. Ironically, the largest impact from competing markets results from a built-in popular escape option within the ACA itself. The law directly allows young adults to escape high-priced ACA products and access other markets through their parents’ health insurance coverage. This is a popular provision not because ACA markets did not provide adequate coverage for young adults. It is popular because prices in ACA markets for young adults are unacceptable.

 Mr. Hurley and Mr. Nantz have limited insurance options and the same price concerns that cause young adults to be desirous to escape ACA markets. With reference to young adults’ options, it is incongruent to suggest that satisfying the wishes of Mr. Nantz and Mr. Hurley would harm the ACA any more than the ACA already harmed itself, and a ruling in their favor would increase insurance coverage, yet it is a scenario that tellingly has no support from those who assure us that maximizing coverage is their primary aim.

 A marketplace resembling pre-ACA markets co-existing with intact ACA markets with subsidies calibrated on platinum level benefits (courtesy of President Trump) would result in more reasonably priced insurance offerings than a scenario without either of these options. Consumers would have a choice between actuarially priced non-ACA options and higher-priced subsidized ACA products, which would logically lead to more choices, better value propositions, and more people being insured. The best-case scenario for aggregate insurance coverage is the Supreme Court providing due remedy to the plaintiffs and allowing them to access reasonably priced insurance while leaving Medicaid expansion and individual market subsidies intact. Hence the potential outcome in the predictive title, “The Supreme Court Expanded Health Insurance Coverage”.

As a vocal champion of sustainable individual health insurance markets, you might think I look forward to the possibility of such a court ruling. I do not. I am an American patriot first and the rule of law comes before my preferred policy outcomes. I have been disappointed to hear others suggest that the Supreme Court should adopt their policy views, while showing little interest in the duty of the court to follow the law. At the same time, I support their policy advocacy and I think policy preferences should overrule the Supreme Court in this case. Say what? Did I just contradict myself? I did not; I desire an ACA-preserving policy decision, but I care more about the right governmental bodies making decisions than I do about decisions themselves. We can always fix bad policy decisions; we cannot fix a clouded mess of the three branches of government performing the duties of the others. I prioritize our government following the law over ignoring the law because we like the results, and you should too.

The Supreme Court is required to decide on this case only because of the deliberate negligence of Congress; it is the clear responsibility of Congress to address the constitutional concerns, and it’s a remarkably easy fix. Congress should listen to the prior court rulings and modify the law to fit within both policy goals and constitutional fidelity. If the policy preference is to preserve the ACA, Congress should legislatively act to preserve the ACA, rather than whine about a vacancy on the Supreme Court being filled. It is incredulous that we must acknowledge this.

Saving the ACA is easy and procedural for Congress. It as simple as striking the mandate from the law or declaring the mandate is severable from the rest of the law. This simple Congressional action has been advocated by legal experts, policy wonks, enrollment gurus and actuaries, yet Congress has done nothing. It is unconscionable for Congress to ask the Supreme Court to do the job of Congress and interpret its vague “intent”, and Americans of all political stripes should want each branch of government to perform its respective functions. The policy merits of a potential court ruling are irrelevant; it is the job of Congress to enact constitutional laws, and prior court cases have made it clear what is and what is not constitutional. Inaction by Congress to address constitutional problems with laws they pass is clearly inexcusable.

There are other reasons why a Supreme Court ruling is a bad idea. We do not know how the court will rule; we should not chance policy preferences to potential court outcomes, no matter how optimistic we are about how the court may rule. The court cannot invoke policy preferences; I often say the job of the court is to follow the law and interpret the intent of Congress, without the freedom and flexibility of Congress. It is a dangerous and unnecessary game that Congress is playing and it is troubling many Americans.

I am not at all comforted by the speculation of what the Supreme Court might do. If Chief Justice Roberts has provided any indication of how his court will rule, it is only that he is unpredictable. The appropriate course of action is clearly Congressional legislation to address the ACA’s unconstitutional elements; allowing the Supreme Court to rule on this case is a dereliction of Congressional duty and Congressional leaders should be held accountable regardless of the judicial outcome.

The Legal Details

A natural reading of the ACA it that is unlawful to be uninsured, even if there are no criminal consequences outside of being characterized a law breaker. The court or Congress could strike the individual mandate from the law and stop there. The court has a greater duty to provide plaintiffs a remedy; it is my view that merely striking the mandate falls short, as plaintiffs are no longer subject to the mandate to purchase an unwanted good but the insurance options that were taken from them by the ACA continue to be illegal for insurers to offer them. Of course, I have no influence on the legal ruling, and while my professional expertise is deep in ACA dynamics, I should disclose that I am neither a practicing attorney nor a legal scholar.

If the court simply struck the mandate as some observers anticipate, this would not fully alleviate the harm done to plaintiffs Nantz and Hurley, but it would render such harm as now constitutional. Unlike the Supreme Court, Congress has no duty to provide remedies to citizens. Congress simply has to change the law from unconstitutional to constitutional; Congress can hurt whoever it wants to hurt in the process. If Congress wants to harm people through legislation, it has every right to do so and should be honest if that is what they are doing.

Of course, Congress should expect legal challenges over constitutionally questionable items from those harmed by the laws they pass. No one should not expect those harmed by unconstitutional legislation to not litigate or to “drop the lawsuit”, as Joe Biden and NBC’s Chuck Todd suggested President Trump, a defendant (at the time) in the case without such legal authority, should do. It is patently absurd for these prominent men to ask plaintiffs to drop a lawsuit challenging an unconstitutional law (even if they do not comprehend who the plaintiffs and defendants are) rather than call on Congress to address unconstitutional elements within a law.

We should all be uncomfortable with the advocacy of purported reliance on unconstitutional law and inherent fear of a court’s ruling, regardless of our beliefs about a law’s purported benefits. We simply cannot cower in fear of significant laws being examined for constitutional fidelity because we are concerned about judicial outcomes; that is no way to function as a country. Our policy preferences should be reflected by Congress passing constitutional laws, not by attempting to shame those harmed by unconstitutional laws from seeking constitutional alignment.

As we await a court ruling, we have an individual health insurance market stronger than we have ever had before, a market that is poised to get stronger with enhanced subsidies resulting from premium alignment, an underlying legal risk that could destroy the entire marketplace, an easy solution for Congress to prevent a court ruling, people in Congress claiming to be champions of the ACA not lifting a finger to remedy the constitutional concern, and a media empire that will not speak the truth about these dynamics. Speaker Pelosi even tried to accelerate the Supreme Court ruling last year rather than championing a legislative fix. It really is an inexplicable American scenario that history will surely record as radically different than the current portrayal; I imagine I will be one of those old-timers interviewed on the History Channel in 2050; I can’t wait.

Mainland Thinking

If you are a mainland reader and have made it this far, I congratulate you on your perseverance and hope your reaction is at least a charitable “well, this is a bit different”. Welcome to the island. I hope you are enjoying your time here and finding the salty breeze of unfiltered perspectives as refreshing as we do. There is a lot more here to digest if you are interested, from me and others too. Unfortunately, we are vastly outnumbered by the voices on the mainland, and you will continue to be bombarded with political drivel that misrepresents ACA dynamics.

What should we do with all the mainland voices? It is not unreasonable to stop listening to them. They were wrong when they told you 30 million people would enroll in ACA markets. They were wrong when they told you young people don’t make much money so they would receive generous subsidies. They were wrong when they told you additional flexibility of non-ACA markets would cause ACA premiums to skyrocket. They were wrong when they told you President Trump’s legal strategy to save ACA risk adjustment was dangerous. They were wrong when they told you cost-sharing reduction (CSR) defunding would harm markets. They were wrong with they told you Section 1332 flexibility would undermine the ACA. I could go on. They have been wrong about virtually everything and they will excuse their ignorance with "ACA markets must be resilient". They will be wrong again. They will tell you how surprised they are by predictable outcomes again. They will continue to refer to enhanced premium subsidies as “policy headwinds”. They will encourage consumers to make bad decisions. They will mislead, they will confuse, and they will affirm each other and have no weight on their conscience.

You can stop listening to mainland voices and you will not fall behind. But you do not have to. I admit that I read them from the island, partly because it is my job and partly because I like to laugh. The coronavirus is what drove insurers back to ACA markets, not a two-year 26% improvement in medical loss ratios…I do find mainland stuff hilarious, and it provides good article material.

You can even bring your mainland books to the island; you do not have to hide them when your plane touches down against the trade winds. I'll sign them if you'd like. We will have a few tropical drinks and laugh about them together. Seriously, we are very fair; we do not reject ideas simply because they originated on the mainland. In fact, we love hearing logical thinking originating from there more than from island publications. We really do love it when that happens, and we wish it would happen more. We unashamedly promote truth from wherever it originates, but much more so when it comes from unexpected places.

Is there an elephant in the room? Why is this island-themed actuarial article so political? It is actually quite the opposite. Let me explain. We are all about policy and technical understanding on the island, and being all about policy understanding requires criticizing efforts intended to confuse policy dynamics with political overtones. For mainland audiences, we have to peel away the political nonsense that has infected the discussion to provide a transparent perspective. Politics have sullied the ACA discussion; we need to remove them to be transparent, and we often have to be transparent that removal is required.

It is true that we have been more critical of Democrats, but that is only because much of the mainland misunderstanding results from Democratic talking points being conflated with ACA market dynamics. We do the same to Republicans when we need to. To be blunt about it, most of what Republicans says is of little substance and most of what Democrats say is of false substance. Island folks can demonstrate why false claims are clearly wrong. We do not usually respond to vague policies such as “we need to put patients back in charge”; we do not know what that even means, so we really don’t have much to say. We will engage truthfully with substantive discussion, and we have been critical of the media deliberately directing conversations away from substance.

Once you recognize that we are removing political noise rather than adding it, you will see that the island does not resemble a political convention. We champion the destruction of false talking points to foster transparency without regard to whether a R or D follows a name. When we see people doing this, we get excited. It happens so rarely that we do not really have the luxury to pick and choose people to admire because of their politics.

Due to his 2017 contributions, we have an Island Suite reserved for one man any time he wants to visit. Can you guess who it is? Probably not. It’s a federal judge who was appointed by President Obama. In 2017, some Democratic states sued the Trump administration. They were “complaining that the federal government will be spending more money on health coverage for poor people”. I put those words in quotes not because they are not true (they are very true), but because they are not mine. They are the words of Judge Vince Chhabria. He was perplexed that a clear benefit for low-income consumers was being falsely portrayed as higher premiums, and he used the plaintiffs’ own words to prove it. He chided Democratic states, “If the states are so concerned that people will be scared away from the exchanges by the thought of higher premiums, perhaps they should stop yelling about higher premiums…while in fact allowing millions of lower-income people to get a better deal on health insurance in 2018.”

Judge Chhabria told the truth. He did not message a bunch of political garbage intended to confuse consumers. In fact, he expressed frustration with those who did. He would be an honored guest on the island any time he wants to visit. Judge Chhabria lives on the mainland, so we can excuse his thinking that the states “adopting a strategy“ helped their local markets rather than harming and confusing their consumers. With that qualification, the Island News endorses Judge Chhabria’s island-based summary and recommends that you read it.

You know who else dropped in for a few island visits? Kevin Drum of Mother Jones. Frankly, we were surprised to see him at first, but we quickly learned he knows his way around and is comfortable here. He expressed his island understanding when his friends were blaming President Trump for 2017 enrollment numbers and most of the media was complicit; “It’s tempting to conclude that the culprit for this is Donald Trump’s efforts to sabotage Obamacare, but the declines began in 2016, when Obama was still in office, and have continued pretty steadily since then…The 2017 year began in October 2016 and ended in early 2017. That’s all Obama.” Wow. I did not expect that, and it does not end there. The Democratic state lawsuit in the prior paragraph? Do you think Mr. Drum falsely portrayed the dynamics that significantly improved subsidies for consumers just to get a dig at President Trump?

The unfortunate reality is that he could have, and he would be widely congratulated for encouraging harm to low-income consumers simply because President Trump’s fingerprints were on it. Before reaching a conclusion, Mr. Drum spent some time on the island hammock chatting with a few mainland friends that occasionally visit. We applaud that. We are on island time. We are patient with people. “I’m trying to better understand what would happen if CSR subsidies are eliminated, and I’m making a bit of progress.” His reaction to $194 billion in additional consumer subsidies over 10 years? “Let it rip, Mr. President” was his message to President Trump. President Trump listened, and the rest, as they say, is misrepresented history. When I selected the 30 voices of the ACA’s first decade, there were some difficult decisions but choosing The Objective Journalist was an easy one.

You know who is not welcome on the island right now? The Heritage Foundation. You may have heard a little about them and the individual mandate, but it is not about that. They have objected to President Biden’s temporary subsidies being made permanent in the American Rescue Plan (ARP), which I applaud because it is an inefficient way to increase insurance coverage. If we have more money to spend on premium tax credits, we should talk to Congresswoman Stephanie Murphy about her strategic subsidy allocation. She is a Democrat like Biden, and we really do not know whether her policy is more liberal or conservative than Biden’s, nor do we care. We like her policy better because it is better policy, and it will improve risk pool balance; the ARP subsidy changes are largely haphazard and inefficient. This is a transparent mathematical reality, not a political opinion.

The island objection to the Heritage Foundation is two-fold. One, we love all Americans on the mainland and on the island, and we do not tolerate class warfare. Why is the Heritage Foundation sounding like Democrats and saying the new subsidies are bad because they “benefit the wealthy”? Is that necessarily bad? Would we object to a cure for cancer if it “benefitted the wealthy”? We are interested in policy implications, not gratuitous appeal to the lowest-common denominator of a populace. We want ACA marketplaces to work for everyone; we don’t pick winners and losers here.

The primary objection to Heritage is the misrepresentation of the need for premium subsidies. They are portrayed strictly as a welfare benefit, and they are not. The ACA significantly increased premiums to a level that they are unattractive without premium subsidies. Arbitrarily but faced with budget concerns, the Obama administration prohibited access to premium subsidies for anyone within an income above 400% of the federal poverty level. Unsurprisingly, many people said “no thank you” to the inflated unsubsidized premiums. Premium subsidies are necessary to reduce the net price of health insurance from inflated ACA levels. Income is irrelevant. The Obama administration made a mistake; the Biden administration is correcting it; Heritage is getting in the way. Like the ACA, the ARP subsidies are poorly designed. Heritage could dispute that, but that’s not what they are doing. They are making a general case that higher income people should not receive subsidies and deliberately adding confusion. Notably, Republican policy proposals were based on age-based tax credits without regard to income. Are the ARP subsidies targeted toward higher income people? Yes, and they should be to attract balance. The Heritage Foundation should complain about ARP subsidies because of what is wrong with them, not something that is right.

The island goal is to provide clear transparency to foster sustainable markets and we are frankly uninterested in criticizing political voices, but we recognize that we have to criticize political voices to be transparent, and we do not hesitate to criticize, not because we want to be political, but precisely because we want to remove the political clouds from your understanding of ACA policy. When we tell you the implications of President Trump’s policies and Senator Wyden responds, “Attributing any improvement to the president is one of the biggest lies yet”, we are going to forcefully call him out. We have to. It is not because we do not like Senator Wyden’s politics. It is because he is trying to mislead you because he cares more his politics than telling you the truth. We only want you to know the truth, because one of the huge weaknesses in ACA markets is poor understanding resulting from politically-based misrepresentations. That’s a different article; spend some time on the island and you will learn how states make bad decisions because of the politically-charged mispresentations of ACA dynamics.

While we are not political, we are intolerant of egregious behavior and efforts to confuse Americans. Senator Schumer is banned for his unprovoked and unconscionable threats toward two Supreme Court justices. We find Speaker Pelosi’s revolting charade of attaching President Trump to the lawsuit when she had influence and he did not, not resolving the issue, leaving it dangling to fundraise and fearmonger during a presidential election season, leveraging a compliant media, …; we find all of it disgusting.

Judge Kurt Engelhardt is troubled by Speaker Pelosi's inaction too, “Why does Congress want the judiciary to become the taxidermist for every legislative big-game accomplishment that Congress achieves?” The attorney for the Democratic-controlled House unbelievably responded that the president did not want to strike the individual mandate. He said this when President Trump, not President Biden, was in office. President Trump, the preserver of the individual mandate, give me a break. I do not believe everything President Trump has said, but I have heard enough to be assured that he does not want an individual mandate in the ACA framework, as have all Americans with a television or internet connection.

Now that Congress has not acted under President Trump or President Biden, the excuse for Congress not doing their basic duty is an imagined scenario that no president is going to sign a law that does not harm the underlying legislation but only straightens up a constitutional issue. It’s an absurd argument and no one should excuse Congress for inaction because of an imagined rationale of delinquent Presidents Trump and Biden excusing a delinquent Congress from doing its job. Congress should pass the bill and if the president doesn’t sign it, the fault is with the president. Until then, the responsibility rests with Congress, not President Trump or Biden. Does Douglas Letter really want to be on record with “Congress didn’t save the ACA because neither President Trump nor President Biden would be willing to detach an inconsequential, unconstitutional mandate.”? The necessary conclusion on the island is that Congress decided not to save the ACA, not that Congress refused to act because they were uncertain how a president might respond.

We also have to directly address the media negligence here. A judge asked the question of Congress in court, but nobody in the media has ever asked Congress why they do not do their job here? Instead, on plenty of occasions, they asked President Trump why he did not overstep his authority and influence the case. Wasn’t he impeached for doing something like that? With a truth-seeking media and an informed public, we might have been able to persuade Congress to perform its basic duty and resolve the matter before it got this far. Instead, the media has provided cover for a negligent Congress. The legal results could be catastrophic.

Tipping Over the Island

At times, I think things are getting better on the mainland. Other times, I wonder if it is an island about to tip over. I want to tell you one quick story to illustrate this, and then we will conclude and await the SCOTUS decision together, unless Speaker Pelosi pleasantly surprises all.

The latest mainland claim is not new, but it has resurfaced from a surprising source. The Urban Institute is suggesting flat benchmark premiums are a sign of a healthy market. At the same time, I am working with states to directly increase their benchmark premiums to be actuarially aligned and not shortchange low-income consumers from entitled tax credits. Proper premium alignment is a 44% increase in silver premiums since 2017; most states are well short of this level and benchmark premiums need to rise. State representatives that have visited the island are putting premium alignment in place. Supposedly, when benchmark premiums increase to reflect state efforts to align premiums and fairly distribute subsidies, the Urban Institute will express concern with rising benchmark premiums. We will see.

One reason benchmark premiums have remained flat is that insurers are hypercompetitive on the silver plans that determine the benchmark. This practice increases the premiums on plans that people buy while simultaneously reducing premiums on plans that determine subsidy levels. This is a transparent lose-lose for consumers, and the Urban Institute calls it “underscoring the Marketplace’s fundamental stability”. They follow this with a correct explanation that “Expanded premium tax credits that make enrolling in coverage less expensive…should increase enrollment and encourage greater participation by insurers”. In other words, when President Trump enhanced premium subsidies, it was bad. When President Biden did the same, it was good. We simply do not allow those obscenities on the island.

Does the Urban Institute really not know that flat benchmark premiums have “compressed premium tax credits” and “expanded premium tax credits” are good for ACA markets? This is classic mainland thinking; an island view glosses over the names Biden and Trump; we only see “expanded premium tax credits”; we do not have a different view on tax credit implications based on an author. We believe higher premium subsidies lead to lower net premiums and higher enrollment. We recognize that it requires a massive amount of political clutter to see this any differently.

An economic analogy is that we all know that home prices rise with lower interest rates. Have you ever heard someone argue that one political party lowering interest rates would cause home prices to fall? Of course not. We view economic policy with an economic understanding, not a political understanding. Why do we do this and confuse people with the ACA? We literally do this all the time on the mainland, but we never on the island.

Why is this surprising news from the mainland if it is so common? The Urban Institute is clearly a mainland voice, but we thought they were on the island on this issue. In 2016, they correctly explained the dynamics related to CSR defunding, second only to the Obama administration on the chronological timeline. Their report was peppered with negativity, but hey, we are pretty tolerant about tone on the island if the policy dynamics are accurately portrayed. Urban noted the benefit that "higher premiums would in turn lead to higher federal payments for Marketplace tax credits". Other mainland sources concurred. The Obama administration, as mentioned, had said in 2015 “PTCs (premium tax credits) would adjust to cover the increase in premiums that would result from pricing silver plans for an AV of 90 percent versus 70 percent.”  Oliver Wyman agreed, noting “any increase in those premium rates will cause subsidies to increase in parallel”. The Congressional Budget Office said “the tax credits would increase when premiums for silver plans rose…the number of people receiving subsidies for nongroup health insurance would increase under the policy in most years. In particular, because tax credits would increase and gross premiums for plans other than silver plans in the marketplaces would not change substantially, many people with income between 200 percent and 400 percent of the FPL would, compared with outcomes under the baseline, be able to pay lower net premiums for insurance that pays for the same share (or an even greater share) of covered benefits. As a result, more people would purchase plans in the marketplaces than would have otherwise and fewer people would purchase employment-based health insurance—reducing the number of uninsured people, on net, in most years.”

In other words, everybody knew premium subsidies would increase. We have known it for years. The Urban Institute wrote about it in 2016. That is how the ACA mechanics work. We don't debate it because the debate has been over for a long time. This has been well understood in the health policy community. Last week, the Urban Institute said “the policy change regarding cost-sharing reductions that caused large premium increases in 2018 had an unanticipated side effect of increasing premium subsidies, thus reducing premium costs for subsidized enrollees”. Unanticipated? I really do not understand the motivation here. Their 2016 claim was correct, “The higher premiums would in turn lead to higher federal payments for Marketplace tax credits”: If you're new to the terminology, 'Marketplace tax credits' is the same thing as 'premium subsidies'. Why are they arguing with themselves? In all likelihood, anyone reading their policy report is going to be well-informed on the subject and know this is not true. Yet, I have heard no objections.

Here is more of what they said:

“The average national benchmark premium declined for the third year in a row in 2021, underscoring the Marketplace’s fundamental stability…Several provisions in the American Rescue Plan Act will bolster the Marketplace in 2021 and 2022. Expanded premium tax credits that make enrolling in coverage less expensive and expanded eligibility for subsidized insurance to people with incomes above 400 percent of the federal poverty level should increase enrollment and encourage greater participation by insurers. Broader reform proposals by the Biden administration may further strengthen the Marketplace. The administration has indicated intent to reverse several Trump administration decisions…The expanded premium subsidies proposed in the American Rescue Plan are currently temporary, but making them permanent would improve affordability for many individuals and families with low to moderate incomes…Even when premiums jumped substantially for the 2018 plan year, after the elimination of payments for cost-sharing reductions, enrollment stayed steady.”

There is some truth in here, but there is also a lot of subtle mainland thinking. There is no “fundamental stability” in the Marketplace. ACA markets were in serious trouble in 2016 and few people were suggesting solutions. The new stability is the result of the 2018 policy, which the Urban Institute now references as “premiums jumped substantially“, rather than their 2016 “all tax credit–eligible individuals have larger tax credits available to them”. It is a deliberate mischaracterization of the policy dynamics. They add gratuitous references like ‘Biden reform strengthening Marketplaces by ‘reversing Trump administration decisions‘. You love that if you’re a Biden campaign operative. If you’re a stakeholder in ACA marketplaces, you are only being fed confusion. Biden's work so far has mostly built on President Trump’s subsidy enhancements, and even us island folks add a little folklore to the truth but we present it as such.  

Conclusion: A Fortuitous Ruling that Should Never Happen

The Supreme Court may expand health coverage. Should we therefore be excited about the upcoming court decision? No. The Supreme Court should not rule on this case. We should aim to expand health coverage, but we should not do that through the Supreme Court. We should do that through the other branches of government as we have been doing through the administrations of President Trump and President Biden. President Trump slowed the decline in health coverage levels through regulatory policy recalibrating subsidies to a higher benchmark and President Biden concurred with him by signing emergency legislation with temporary changes in subsidy parameters, despite his clearly mainland claims of wanting to “undo the damage Trump has done”. There has been pressure to venture toward ACA destruction, but so far, Presidents Trump and Biden have followed their predecessors on the ACA course; you won’t hear that transparency on the mainland; you’ll hear political clutter. Mainland folks cannot stomach that Obama’s ACA marketplaces were struggling, Trump’s primary contribution was a subsidy boost, and all Biden has done is more of what Trump did. It rubs them wrong, on both sides of the political aisle. “Well, what they have said is so different.” We don’t dispute that on the island, but ACA mechanics do not respond to what they say; ACA mechanics do not know what they say; ACA mechanics respond to what they do, and enhanced premium subsidies strengthen marketplaces regardless of their political source.

Broadly speaking, a review of policy actions over the last ten years generally suggests both parties desire a similar private market framework (a minority of Democrats prefer a government-centric approach) promoting coverage though regulatory rating rules and offsetting the resulting higher premium rates with tax credits. Republicans are primarily interested in broader coverage and providing incentives to efficiently maximize procurement of health insurance. Democrats desire greater coverage as well, but their aim is more targeted to vulnerable populations.

Democrats also view economic redistribution as a laudable function of subsidizing health care premiums. Republican objections to enhanced subsidies in the ARP were premised on the idea that most of the new subsidies would go to current enrollees. They were correct in their assessment, but maybe not in the reception it would receive. Democrats seemed a bit perplexed that this was viewed a criticism. Enhancing subsidies is equivalent to the cash payments that we have become accustomed to in the last year. Republicans do not want to use health insurance as a redistribution vehicle. Democrats do not mind.

Democrats have acknowledged that Republican proposals “increase the overall number of people with coverage”, but “this worries some Obamacare supporters, who say the goal of insurance reform isn’t just expanding coverage — it’s expanding coverage for people who really need health care.” But people on the mainland don't see it that way, like our friend who thought the 2021 was due to President Biden wanting the most people to have coverage.

Outside of the differences of efficiency vs. redistribution and broad coverage vs. target populations, there is general bipartisan agreement for a private health insurance market. Unless I am naive, the Texas v. California case is an easy case to keep out of the Supreme Court. Republicans would have removed the individual mandate from the law, but they did not have any Democratic votes, so they instead changed the shared responsibility penalty to zero, leaving the mandate in place. We have a marketplace that presumably both parties accept and an unconstitutional element that can be removed, yet Congress is doing nothing. Do Democrats in Congress actually want the ACA to be overturned? The conventional wisdom is that they don’t, because of their position in the court case. I don’t give that a lot of credence. Anyone can express an opinion in court, but it’s the judge's decision.

Imagine if you had the option of pleading to a judge that you should not be punished; you might be persuasive, but he has to follow the law. What if you could delete these case? What if it was your decision and not that of a judge? Congress has that authority, yet they have done nothing. Arguing in court is not convincing of a policy preference. If their collective desire is to assault the ACA as we know some individual representatives want to do, they should do that in Congress, not in the Supreme Court. And of course, the media should call this out as the charade that it is.

As patriotic Americans, we should view the duty of the Supreme Court to uphold the law more than our political or policy preferences. At the same time, we should easily recognize that a case of this magnitude should be legislated by Congress, not ignored by Congress and tossed to the Supreme Court to do the dirty work. It is an easy decision for Congress. It is an easy process for Congress. Congress can remove the individual mandate with ease. Their should be no discomfort in doing so. If there is and Congress does not want to strike the mandate for reasons I do not understand, Congress can easily state the individual mandate is severable. In the latter case, the ACA is saved even if the Supreme Court strikes the mandate rather than Congress.

Thankfully, Americans can tolerate bad legislation. We have a lot of it. We cannot tolerate unconstitutional law and attempt to shame plaintiffs because we fear a legal outcome. Plaintiffs Hurley and Nantz are due a constitutional remedy. The solution is not for plaintiffs (or non-plaintiffs, as Joe Biden suggested as President-elect and numerous media personalities suggested) to drop the case. The solution is for Congress to remedy the constitutional problem. If Congress is unwilling to do this, we should elect new leaders who understand the role of Congress.

Katie Keith is right. The consideration of substantive health care policy belongs in the halls of Congress, not the Supreme Court, but it’s a debate that should be a honest discussion of tradeoff decisions and interest in learning the true implications of policy decisions, not derision and ridiculous characterization of the other party’s intentions. Policy progress and understanding is facilitated much better that way. How do I know? I have lived it since 2011. I have the scars to prove it, and a mathematical approach rather than a political one has resulted in a clean mind that I do not allow to be cluttered with mainland thinking. It is the way we have always understood health policy dynamics on the island.

We have no real dress code or any other rules for that matter, other than the disallowance of mainland narratives intended to confuse a true understanding of ACA dynamics, which always ends up harming markets and consumers. With the case before the Supreme Court and another one brewing with equal underlying recklessness, we are about to expose those who have promoted falsehoods to champion their selfish political goals and harmed lower-income consumers in the process. $6 billion per year. 6 billion with a B. A month before I took a little pause from island festivities to go dancing in the minefields, I met the author (in Atlanta of course) of the words which unintentionally prophesized the coming release of ACA skeletons. “How long until this curtain is lifted? How long is this the song that we sing? How long until the reckoning?”

P.S. I was about to change the font on the final quote to match the article. Then I realized it was a font I never use…Georgia…nah, I think I’ll leave it.