March 4 was an important date for everyone connected with King v. Burwell, which is practically the entire nation. People with subsidized health insurance are waiting with baited breath for the decision that could take away subsidies that make their health insurance affordable. Republicans are leaving no stone unturned to turn the tables in their favor and the Obama administration is bracing up for what could be an acid test for the workings of the law. On March 4, the Supreme Court heard the arguments from both sides on the King vs. Burwell case, and the Court will be meeting again soon to continue further.

The argument presentation on March 4 saw a lot of action around interpretation of the law, the context of those fateful 6 words, and the disposition of participating Supreme Court judges on the presented issues. Let’s take a look at the 4 important things to know after the verbal argument round of King v. Burwell.

  • The primary theme of the arguments was that of federalism and unlawful coercion of states. Justice Anthony Kennedy, considered the strongest federal favoring judge on the panel, was all about the impact this case will have on the subsidies available to millions of Americans. Justice Anthony Kennedy’s primary concern was whether the scrapping of crucial subsidies to millions of Americans on the basis of a misconstrued, misinterpreted phrase in the law functioned as an unlawful, unconstitutional coercion on States. In simpler words, Kennedy felt that it would be unconstitutional for the Congress to put this pressure on States, in turn making them lose their health insurance subsidies, when other better means of handling those six words are present.
  • Context and understanding of the law as a unit was the prime theme for the State. The Defendants cited that the Court needs to view the law as a whole to understand the overall program and direction of the law while ruling on the case. Justice Elena Kegan used hypotheticals to break the case and cite that the text in question has a context, and to establish and use that context, granular understanding of the whole law is essential.
  • In the war over context and understanding of the law, Justice Antonio Scalia and Justice Samuel Alito were completely opposed to a unified view of the law. Justice Scalia wanted to view the contested statement in absolute isolation, without corrupting it with the working of the remaining law. Similarly, Justice Alito was of the opinion that the law still works without federal subsidies to the states without exchanges, and the statute will still make sense without those subsidies. Both the Justices wanted to move the context to only those four words in isolation, without taking into account what they mean in reference to the whole law.

State Exchange Lease

The panel of judges will battle on the lines of context, and by the looks of it, the conservative judges might decide to side with the government on this. It will be mostly about avoiding the chasm that will open up if the Court kills the subsidies. For now, it seems that the scales are slightly tilted in favor of the Obama administration.

Over the years, Republicans have made numerous attempts on the life of the Affordable Care Act, some of which have been partially successful. Medicaid expansion was one instance where Republicans succeeded in removing the mandate of expansion, which ultimately resulted in the formation of a coverage gap in states that did not expand Medicaid. Other attempts, fortunately, were primarily unsuccessful. However, now with Republicans in full control of the U.S. Senate, a new repeal and replace attempt is brewing, and the GOP has another alternative to replace the law that has connected 16.4 million people to affordable health insurance.

With King v. Burwell, Obamacare might lose some potency without its trademark subsidies, and Republicans will choose this time to present some major changes as a part of its Repeal and Replace campaign. Let’s find out what the latest alternative is about.

1)  End of Individual and Employer Mandate – With the repeal, Republicans want to end the Individual health insurance mandate and Employer mandate. With this, individuals would no longer be required to have health insurance and employers would no longer be required to offer coverage under the law.

2)  Introduction of Consumer Protection in the System – With the replacement law, the concept of consumer protections under Obamacare will be retained. As per these protections, there will be a guaranteed renewability of their coverage, adults up to 26 years of age would be able to stay on their parent’s plan, and there will be no lifetime limits. Currently, Obamacare limits the cost ratio between younger and older consumers at 1:3, but the Republican alternative will increase this to 1:5. Although that will result in increased premiums for older people, younger people will have a reason to enter the insurance markets at lower health insurance premium.

3)  A System of Default Enrollments will be Introduced – States will have the option of initiating default enrollments for people who are eligible for tax credits under the proposed law. This would ensure that uninsured will have a default enrollment without going through the cumbersome exchange process, but would not be mandated to have insurance because there will be no Individual Mandate.

4)  State Managed Risk Pools for Uninsured – For people who decide to go uninsured, state run risk pools will take care of insurance coverage. These risk pools will be high risk, no certainty pools and people will have no assurance on coverage options and cost of coverage. The premise of this risk pool is an adequately funded program that will ensure coverage for the uninsured.

State Exchange Lease

5)  No More Non-Discrimination on the basis of Preexisting Conditions – A major aspect that could result in the undoing of this new potential replacement, preexisting health conditions will feature in insurance premiums again, and people could face high insurance premiums or no coverage if they do not meet certain requirements if they have a preexisting condition. If a person is continuously insured for at least 18 months, he can get affordable insurance even with preexisting conditions, but otherwise, people could be looking at high insurance premiums if they suffer from a chronic ailment.

6)  Affordability through Balance in Risk Pools – Through inculcation of preexisting medical conditions back in the risk pools, Republicans want to have a stable risk pool where people with preexisting medical conditions will not jack up the prices for those in search of affordable coverage. By having a state-run uninsured pool, the Republican alternative further solidifies this mechanism of keeping insurance costs in check by having continuous coverage. With the proposed tax credits, covered in the next part of this post, consumers should be able to have health insurance in the ballpark of available credits. With this move, Republicans ensure continued affordable coverage in the absence of Obamacare.

These initial replacement aspects demonstrate that the Republicans are looking at balancing the risk pools by moving out the unhealthy people and bringing in healthier people. Although this looks good on paper, it is not entirely reassuring, especially considering the fact that state-run risk pools won’t be ready for the burden, and insurance costs are not just governed by a balance between young and old. In the next part, I will cover the proposed tax credits by Republicans and their potential in replacing Obamacare subsidies.

While the arguments in the U.S. Supreme Court were primarily about the context, the individual meaning, and the impact of the challenged words, the focus was primarily the impact that would result if the Court were to rule in the favor of the plaintiffs. Lost subsidies, additional pressure for states to build exchanges, and necessity to raise the health insurance premiums are just a couple of major things to think about. Fortunately, most of these instances show that the Justice panel is inclined toward keeping the subsidies intact and shooting down the lawsuit.

6) Why create Federal Exchange at all? – Liberal justices collectively asked what was the purpose of having a federally facilitated marketplace when the administration did not intend to provide subsidies and tax credits, and, moreover, why would health insures sell on it? The Justices believed that there were no benefits available through the federal exchange if the subsidies were removed, and trapped plaintiff advocate Michael Carvin on the statements he made in 2012, when he cited that without subsidies, health insurers will have no reason to sell their products on the exchange. The premise behind this was simple – the federal exchange was created to provide subsidies to states that did not have their own exchange.

7) Plaintiffs lost key ground in their arguments – Amid this argument of “why have a federal exchange at all,” plaintiffs lost key ground in their discussion with the panel. Plaintiffs have argued since the beginning that the Obama administration failed to see the state side of things in their rollout of the law. They did not evaluate how many states wanted to go with the ACA marketplace method, and that’s why they included the “established by the state” clause into the law. This would indirectly motivate states to establish local exchanges if they wanted to have subsidies. However, this key ground was lost in the wake of the question that why did the administration federal marketplace at all.

8) On the other hand, Justice Samuel Alito felt that the case was crystal clear – For Justice Alito, the case looked simple enough – the plaintiffs are right and the statute of the law does not allow the administration to provide Obamacare subsidies to states without exchanges. Had the administration wanted that to happen, they would have used language used in other sections of the law, such as “exchange established under the act” or “established within the state.”

9) The Chevron Doctrine could be useful here – If the ambiguity in the case is maintained, the U.S. Supreme Court might refer to the Chevron Doctrine under the 1984 case of Chevron v. State, that set the precedent that a government agency could resolve the ambiguity. However, Justice Antony Kennedy felt that having an individual agency and its director decide the future of millions of dollars of subsidies is not prudent, and that the proponents of federalism should rethink how they want to approach this. Further, if that happens now, it’s not hard to imagine that an opposition government can take the same approach to kill the subsidies in states without their own exchange.

10) Jonathan Gruber was ignored in the stream of arguments – Fortunately for the Obama administration, Jonathan Gruber, the man who defected from the Obama camp after working on the economics of the law, was ignored in the whole argument.

11) The U.S. Supreme Court ruling could be delayed in a way that helps everyone – Although the Court’s decisions are implemented immediately, there was a suggestion from Justice Samuel Alito that talked about issuing the decision in June but delaying its implementation until the end of the tax year. That way, the decision’s impact can be minimized by giving states, health insurers, and people additional time to get things in order. Insurers would be able to manage their offerings by taking the decision into account and people would be able to manage their finances in the absence of subsidies.

The U.S. Supreme Court will be announcing its decision on King v. Burwell in late June, and there are some rumblings that the decision might be delayed. For a decision that influences health plans across the country, affects 34 states without health exchanges, and burdens millions of people in affected states with a renewed health coverage challenges in the absence of subsidies, this delay in decision could probably be a bigger challenge than the decision itself. While it is still not clear which way the wind would blow, the discussions and arguments presented to the court on March 4 gave clues to how the case might turn out.
Some states have already started thinking about their contingency plan, and with powerful healthcare technology that overcomes the perennial challenges of traditional state exchanges, a solution might be possible. However, it’s imperative to know how this is going to shape up. Here are 11 instances from Supreme Court discussions that give a glimpse into how the panel of judges might take this ahead.

1)    Judges were concerned about the Standing of the Plaintiffs – When the arguments were being presented, the starting concern of Judges was the Standing of Plaintiffs. Justice Ruth Ginsburg picked up a recent news mention that insinuated that the Plaintiffs might not have the right to file this suit because some of them had access to other insurance, and this very access challenges their standing in the case. While Plaintiff attorney Michael Carvin assured the Court that at least one plaintiff had standing, the administration suggested that the Panel might want to recheck that part.

2)    Justices Interpreted the Contested Four Words Themselves – Since the whole argument is about those four words “established by the state,”,Justice Stephen Beyer interpreted these words to show Michael Carvin that they have treated these words too narrowly while filing this suit. Stephen Beyer then explained that the idea was to have a federally operated exchange that functioned as a close equivalent of a state operated exchange to provide tax credits to people in states that did not build their own exchange. It was clear what the law was talking about, and this misconstrued interpretation was not helping the system in any way.

3)    Justice Elena Kagan Reinforced the Idea of Interpretation of Text as a Whole – In a similar fashion, Justice Kagan suggested that the plaintiffs should reevaluate their argument by viewing those words in context of the entire law, and not in isolation. The federal exchange was a fallback mechanism for those states which did not establish their own exchange, and that’s what the entire law suggests. Isolating a section of text to build an argument that refutes the meaning of the law as a whole was not making the cut for Justice Elena Kagan.

4)    Federalism Ruled the Roost at the Arguments – Citing unconstitutional actions that might result from the suit, Justice Anthony Kennedy clearly demonstrated that it would be wrong if the Courts used the plaintiff’s argument of verbiage in the law and ignored the complete picture of the subsidies. With so much at stake and so little time to curb the damage that might result, it would be entirely wrong to deliver a decision that unconstitutionally coerces states to build an exchange to safeguard their health insurance subsidies. The idea was to support the law and the federal-state exchange relationship that was originally suggested by ACA.

5)    Intention vs Execution turned out to be a major problem – The argument of federalism supports that the Obama administration always intended to have federal exchanges as a fallback mechanism for states which did not establish their own exchange. However, Justice Scalia was more concerned with the execution during the writing of the statute. Justice Scalia said that this might not be the intended statute, but it is definitely the statute that was delivered in written, and for that, he was in favor of slamming the subsidies. Scalia also mentioned that since the statute was rushed, it was never properly evaluated, and that this should go back to the Congress for rework if they wish to avoid the consequences resulting from an absence of subsidies in the market. It was very clear that Justice Scalia was in favor of the plaintiffs.

In the next part of this series, I will cover the remaining instances that will give a closer look at how King v. Burwell might end for the involved parties.

Obamacare has turned 5 and the journey has been far from comfortable. Fortunately amid challenges from opposition, a dysfunctional initial rollout, and slow acceptance of the law, Obamacare has still achieved what it set out to five years earlier, even if there is a lot more ground to cover in the coming years. Owing to the law, the US healthcare industry has seen massive improvement in the way healthcare is availed. At the completion of five years, here are 5 numbers that show the major strides of the government, the impact of the law, and the avenues that require attention in the coming years.

1) 16.4 million have enrolled through Obamacare marketplaces – The biggest achievement the ACA has delivered is the mammoth 16.4 million enrollments through the exchanges in two open enrollment seasons. When ACA was implemented, 47 million people did not have health insurance. Although the number continued to grow over the years, 16.4 million of those people found affordable health insurance through exchanges. Out of these, as many as 85 percent were able to avail subsidies and cost assistance from the government for keeping their health insurance premiums in check.

2) $7.4 billion dollars were saved by Hospitals in uncompensated costs – Combining the effect of health insurance marketplaces and Medicaid expansion, hospitals have been able to save $7.4 billion in uncompensated costs. Before ACA, hospitals have covered insurance care for uninsured and underinsured. Hospitals delivered about $50 billion in uncompensated care in 2013. Medicaid expansion under ACA has also played a major role in cost savings. For instance, states that expanded Medicaid experienced a 26 percent reduction in their costs, while states that did not expand Medicaid experienced only a 16 percent reduction.

3) 29 States and DC expanded Medicaid to complement the coverage net of ACA – Medicaid expansion was a crucial aspect of the working of the ACA. Although the U.S. Supreme Court shot down the mandatory expansion of Medicaid under ACA, it left states with a choice to support the law through expansion. 29 states and DC expanded Medicaid to cover healthcare costs, and these states were able to observe a huge improvement in their healthcare cost savings and coverage net. People did not fall into the coverage gap, which opened up in states that decided not to expand Medicaid.

4) $88 billion  has been foregone by States that decided not to expand Medicaid – The remaining states which decided not to expand Medicaid left their residents between a rock and a hard place. At the same time, these states let go of $88 million  in federal grants, which they would have received between 2014 and 2016 if they had decided to expand Medicaid in their state. With a limited healthcare system of these states, residents will be less likely to use medical services, which would ultimately impact the contribution to national economic growth. Without Medicaid, a lot of people will not use medical services, and this will play a detrimental role in the coming years. For instance, by 2023, Florida will lose out on $270 billion national economic impact because it did not expand Medicaid.

5) $1.2 trillion will be Obamacare’s cost for the next decade – Owing to a close check on healthcare spending and healthcare costs, Obamacare will be costing about 11 percent less than earlier estimates. Over the next decade, $1.2 trillion will be spent on Obamacare. Other than the control of ACA on healthcare spending, lower costs of health insurance subsidies will contribute to lower spending. Assuming that the law lasts for that long and is not strangled by the Republican repeal efforts, there is a lot Obamacare can change in the healthcare system.

Like it or not, King v. Burwell is moving ahead, and the U.S. Supreme Court heard arguments from both  sides on earlier this month. A lot of attention has been devoted to the case, with each side presenting its case. So much attention for six words – the ACA is comprised of 381,517 words and, if you count the additional regulations the word count jumps to 11,588,500. So this is a real life example of the power of words.

As per the plaintiffs in King v. Burwell, the language of the ACA only allows those states that have their own exchange to provide premium tax credits to citizens shopping through the exchange. For 37 states who are using the FFM, the law does not state anything about the insurance subsidies, and as a corollary, the ACA is illegally providing insurance subsidies to those shopping through the Federal Marketplace. If the Supreme Court rules in favor of the plaintiffs, all these people will lose their insurance subsidies unless their state builds an exchange and has it live by November 1, 2015.

It’s even more ironic when you consider the size and impact these subsidies have on people and what would happen if all these subsidies were taken away, all because of six little words that make up the ‘controversial’ language of the law. Millions of people stand to lose their subsidies in near two third states, all because of six words. Since all of this is based on the pretext of words, what do linguists have to say on the matter? Do the plaintiffs have a strong case or are they simply making a mountain out of a molehill?

Linguists might be the most interesting to participate in the debate and unravel the linguistic applications of those six words that have launched this controversy. As per the language in the law, linguists think that the Obama administration has the upper hand in the case because of some simple rules of the English language.

As per the language of the controversial text, the law presumes that each state will have its own exchange. If a citizen shops through that state exchange, the state is legally allowed to issue premium tax credits on the basis of conditions laid out in the ACA. If, however, the state does not have an established exchange marketplace, the law does not explicitly state anything about the premium tax credits, it only talks about the case where the state does have an exchange. In simpler words, the federal government is neither mandated nor prohibited from providing premium tax credits to the state’s citizens. It is a matter of choice, and the administration can go any way about it. However, if the administration is providing tax credits in one state, it is obligated to offer the same in all states as per equal protection for all.

For understanding this, another linguist put forward a popular example of definite description problem to explain the situation. The problem states “the present King of France is not bald,” but this statement is ambiguous because the presumption of the statement, that there is a King of France, is not true as France is a Republic. Hence, the statement holds no value. Similarly, in King v. Burwell, the statement presumes that the state has an established exchange, and if that is not true, the subsidy clause is meaningless. The language of the law itself holds no restriction on the subsidies. On the other hand, if the lawmakers explicitly wanted to restrict the scope of subsidies to only those states who have their own exchange, they could have used ‘only when’ to limit the subsidies to those who shopped through the state exchange. Since the lawmakers did not do that, the federal government can choose to give subsidies or not, without any restriction. Naturally, no one can force the federal government to discriminate between two states over subsidies, and under equal protection, they need to provide subsidies for all.

It will be interesting to see how this plays out. All eyes are already looking toward June/July timeframe when the court is expected to issue its decision. Until then, I expect these aforementioned six words to be continuously debated.

A repeal of the ACA has probably been a singular focus for the Republicans since 2010, ever since they launched their first attempt to replace the law with their alternative. After countless attempts to repeal and replace the Affordable Care Act, the GOP had to bow down to the ultimate success gathered by the law after a botched rollout last year. With formidable enrollment numbers and extended benefits through the law, it seemed nearly impossible for the GOP to take the law down in time.

However with a Republican-majority Senate, it looks like they have a strong opportunity to put their old plan in action and replace ACA with something endorsed by the party. The GOP taking a different approach to tearing ACA apart bit by bit – targeting the most unpopular provisions of the law and splitting them open with targeted legislation that could gather sufficient momentum. Here’s what could happen to Obamacare if a GOP Senate gets its way.

With this majority, the GOP plans to put in resolutions to repeal the entire law and, if that does not work, targeting the major taxes and penalties under Obamacare that are inacceptable to the party. The GOP still feels that it is necessary to break the law down as some provisions of ACA are mere unworkable expansions that will increase healthcare costs across the country, and will hurt employment, economy, and business growth.

The section of ACA receiving the strongest ire from Republicans is the employer mandate. The employer mandate requires businesses with more than 50 employees to provide health insurance coverage to employees, failing which they will be subject to penalties. The GOP feels that these aspects are hurting job growth in our economy, in turn hurting our people. Other than the workings of the employer mandate, the Republicans also want to target the gray area presented by the definition of ‘fulltime’ workers in ACA. Other than these primary aspects of the law, the Republicans will also focus on excise tax on medical devices, CAT scan machines, MRI machines, etc. The compensation for market losses to health insurers might also come in the line of fire.

The Republican efforts are drawing power from the business community’s constant lobbying efforts against employer requirements, penalties and taxes. Medical device manufacturers have continually spoken against excise duties, giving more firepower to Republicans. Amid this, some Democratic senators have also discussed supporting certain Republican measures. It looks like once the repeal efforts come to play, some negotiations might be possible between Republicans and Democrats, and the White House might not be able to veto every move of Republicans.

There are chances of a middle path being established on some attacks by Republicans, for instance, the tax penalties on employers who do not offer health coverage to employees might be replaced by incentives for employers who do. While the all out Obamacare repeal agenda will definitely be pushed off the floor, the seemingly minor alterations to the law might not be that easy to forgo.

As the ACA faces another Supreme Court case where the federal subsidies in states that did not opt for their own exchange are being reconsidered, this looming challenge might be a tough nut to crack. Unfortunately, a powerful act that has the potential of changing health insurance forever might succumb to mounting pressure from the opposition.

In the first part of this post, we explored the planning level gaps that ultimately led to the collapse of Vermont’s proposed health system. However, more than any of these planning level issues, the financials were always the pain point of the Vermont administration. Back when the administration was playing with the idea of having a single payer system, they only had the vague idea that the huge $2 billion cost will be covered by an increase in taxes and other connected funding. However, when they actually sat down to make the calculations, the plan worked out to be a failure. Compounding that with the resistance shown by hospitals, insurers and employers, the single payer system was doomed. Let’s take a look at the top financial issues, which broke Vermont administration’s resolve.

1. The administration went ahead without discerning the inflow of money: When the plan for the single payer system was underway, the administration had one thing clear – they were looking at a huge expense, because they were covering more people than Obamacare and were giving better health benefits, both of which were going to cost them a whole lot of money. However, at the beginning, the administration was confident of moving ahead without being fully sure about where the money will come from when they need it. The uncertainty behind cost of this single payer system became an important point of contention in the Vermont elections as well, but fortunately, Peter Shumlin, the long standing proponent of the single payer system, won the election and continued his term. This inconceivable oversight on finances was one of the prime reasons behind the failure of the plan.

2. Vermont needed a 160 percent tax increase to meet the financial liability of the single payer system: According to available estimates, the Vermont administration expects to collect $1.7 billion in tax revenue. For Green Mountain Care, the name given to Vermont’s single payer system, the state needs to raise an additional $2.6 billion in taxes, which comes out to be roughly 151 percent. Similarly by 2019, the state expects to collect about $1.8 billion in taxes, but needs to raise $2.9 billion through taxes for the single payer system. That’s 160 percent of sheer tax increase. Naturally, for each of the ideas suggested for raising this money, the administration witnessed a strong pushback from the segment, subduing the administration into accepting their terms. For instance, when the small businesses were informed of the 11.5 percent payroll tax, they pushed back, ultimately having the administration provide them a grace period for organizations with up to 100 workers, thereby losing $500 million in funding. Another reason for financial failure was that the state tried to replicate a manner of federal subsidies in its system, and for financing those subsidies, put incessant pressure through payroll and tax revenues.

3. Even with all this, a single payer system was out of Vermont’s reach: The federal government spends the most on health insurance, through Medicare, Military Healthcare, subsidized employer sponsored health insurance, and a large chunk of Medicaid sponsorship. Vermont’s plan to replace all of that was too big for the state’s capability, even with that small a population. The only way to make Vermont’s plan work was through waivers on Medicaid, Medicare, and Obamacare. Further, a primary advantage of having a single payer system is reduced paperwork for hospitals and insurers because of a single insurer to reconcile with. However, with the option of buying private health insurance from New Hampshire, the advantage of having a single system is not much to talk about. Further, Vermont has only 3 insurers, BCBS, Cigna, and MVP, and having a single system won’t make much difference in administrative cost savings anyway.

Although this failure of a state-based single payer system is a major setback in having a nationwide single payer system, it does make a few things clear about Obamacare. The failed effort highlights what Obamacare has done right in the last year and a half, including the cost balancing and smart maneuvering of the tricky healthcare domain. At this point, Obamacare is working. Even if a single payer system is not in the American future for at least the next half decade, I think we can make do with all that Obamacare is doing right.

After nearly four years of pouring heart and soul intensive effort trying to establish into an ambitious plan that would setup a statewide single payer health system in Vermont, Governor Peter Shumlin recently announced that the plan to implement the system by 2017 would be abandoned. the scrapping of Vermont’s plan to implement the system by 2017. The Governor cited that the change would bring huge economic pressure on the state, and the disruption could be too much for small businesses and working families.

Although this single payer system plan was limited to Vermont, it holds a clear implication for the entire country, that single payer system will not be feasible for the country in the near future, and that Obamacare is still the best way to balance the nation’s imbalanced healthcare system and rising healthcare spending. So, what was the reason for the early demise of the plan that had so many hopes riding on it? Let’s find out.

1. Vermont tried to give the residents too much, too soon: Under the single payer plan, Vermont wanted to provide the best of benefits to its residents. Under the current Obamacare system, that translates into the Platinum coverage health plans, where insurance companies bear as much as 90 percent of the insurance liability while the consumer covers the remaining 10 percent through copays and deductibles. However, the total liability in Vermont’s private plan came out to be roughly 94 percent, which was higher than the best, and most expensive, , costliest Obamacare health plans. Naturally, this was too much for the administration to handle, as it was driving the costs up for everyone. Vermont tried to play with the liability by reducing it to 80 percent, but was ultimately unable to settle with the drop in benefits under this reduced liability plan. Between too high cost and too low benefits, Vermont ultimately decided to drop the whole idea.

2. The idea was bottlenecked by hospitals and insurers: Under this new private plan, Vermont wanted to give better benefits at lowest possible costs, which meant elevating taxes and lowering reimbursements to doctors, hospitals and insurers. Had this come to pass, doctors and hospitals would have had to accept privately insured patients at Medicare reimbursement rates. For the entire privately insured population of Vermont, this cut would have meant 16 percent reduction in reimbursements. Naturally, the hospitals and insurers aligned against the single payer system, leading to a collapse of the system. Considering the expensive healthcare industry of America, any such attempt to enforce single payer system is bound to see resistance from these powerful elements of the healthcare industry. Insurers do not want to lose all their business because the government is taking over healthcare, a phenomenon that is going to precipitate whenever a nationwide stab at single payer system is taken.

3. Some other cost savings failed to materialize: A primary source of income for Vermont’s single payer system were was the distributed cost savings they expected to nurture over the course of time. However, almost all of their planned attempts failed spectacularly. For instance, Vermont expected to gather a $267 million under the Obamacare waiver for setting up a competent healthcare system in the state, but after revisions, they managed to project a funding of only $106 million from the center. That’s a whole $161 million short. Another shortfall was on the Medicare funding they expected to receive. Vermont expected about $637 million in funding over Medicare, but the final number was only $487 million. The state also expected reduced tax revenues over the 2017 timeframe, of the order of $75 million. So, $161m, $150m, and $75m, making a total of $386 million, were snatched away from Vermont through mere projections. Considering the total liability of $2 billion, this was a roughly 20 percent loss even before the plan was put into motion.

The above aspects only deal with the planning end of Vermont’s attempt at single payer health system. There still is the subject of finance, which ultimately proved to be the final nail in the coffin of the Vermont single payer health system. In the next part of this post, we will explore the financial challenges that ultimately cemented the disintegration of Vermont’s attempts. Stay tuned!

By now, I am sure you must have heard the sounds of celebration in the Obama administration. It has outdone its own enrollment estimate by ending the second enrollment with 11 million enrollments. This open enrollment has seen 11.4 million people re-enroll or enroll for the first time with federal and state-run marketplaces.

Before the open enrollment kicked off on November 15, the HHS set a target range of enrollments at 10.3 million to 11.2 million by February 15. Although the final numbers are not yet published, estimates show that the marketplaces have already crossed that range. In fact, a million people signed up for coverage through the marketplaces in the last 10 days of open enrollment.

Although the three-month period ended on Feb 15, some extensions were provided to people who had initiated but not yet completed their applications in the system. The extension expired on February 22. Some people experienced long wait times for call centers and technical challenges in the last few days due to overload. Other than that, it was a pretty smooth sail for the exchanges this time around.

Out of the 11.4 million enrollments, 8.6 million came from the federal marketplace www.healthcare.gov, which is being used by 37 states. The remaining 13 states and DC managed 2.8 million enrollments, a pretty strong number for the state-run marketplaces. Although the administration did not delve into the details of re-enrollees and first time enrollees, the ratio should be somewhere around 60-40. However, a noteworthy point here is that not all enrollees have paid their first premium, and since that is necessary for qualifying as ‘enrolled’ with the system, it is likely that the number will come down in the next couple of months. A similar trend was noticed last year, when the initial tally was of 8 million enrollments, but these gradually fell down to below 7 million due to policy lapse and switching of health policies. The cancellation of health insurance due to citizenship and other legal matters was another blow to the enrollment numbers.

Since a similar trend could surface this year too, HHS Secretary Sylvia Burwell is thinking of reopening the enrollment period in the tax filing season of April. The administration expects that about 6 million people will learn that they owe penalties while filing taxes and a high percentage of these people might want to buy health insurance instead of paying penalties. This should be announced in a few weeks. Until then, some states, such as Washington, have already extended their enrollment deadline until the end of April.  In 28 states, extensions have been provided to only those people who are not applying for subsidies.

However, amid revelry and a positive outlook resulting from 11.4 million enrollments, the administration and states still need to think that they are far from their goal of a fully insured America. By 2019, there will be at least 30 million uninsured in the country, especially in the 18-34 age range which is choosing to stay away from health insurance due to high costs. There still exists a Medicaid coverage gap that is trapping 5 million people in states, which decided not to expand Medicaid. The SHOP (small business exchange) needs some attention from the administration, as most small businesses are not interested in engaging with the marketplace, choosing instead to offer pay raises to employees who are using the federal marketplace for insurance.

The doctor-patient ratio and the coverage network is another area that needs focus. In the high competition market, several health plans are trying to stay profitable by cutting hospital and physician networks. Couple that with the shortage of primary care physicians and you could have a pretty big issue with appointment availability, etc.

It is clear that other than getting stellar enrollment numbers on the exchange marketplaces, there is a lot that the Obama administration needs to do to retain the ACA momentum. Between this and the looming Supreme Court decision, the future definitely looks challenging.