The SeniorCare Investor: SCOTUS, POTUS...HOCUS, POCUS-

Supreme Court Upholds ACA, But Uncertainty Remains
 

While it is not up to us to opine whether the Supreme Court (SCOTUS) was playing politics with its final decision released in late June, any time there is something for all to cheer and decry, you just get that feeling that someone was trying to reach a middle ground.  And that someone, obviously, was Chief Justice Roberts, when he opined that the Affordable Care Act (ACA) was constitutional, using the argument that the individual mandate was allowable under the law because it was within the taxing powers of Congress.  Although the democrats don’t want to call it a tax, and prefer a penalty, it is pure semantics because either way, it will cost some taxpayers real money, whether they buy insurance or pay the tax, err, the penalty. 

Most people thought Roberts was leaning the other way, and they were caught off guard by the “tax” opinion. Perhaps he watched a few speeches by POTUS who was working his oratorical magic to the masses. The bigger problem with ACA is twofold.  First, when more people are covered by health insurance, health expenditures in general will rise. To think that those newly “insured” people won’t take advantage of their coverage and seek medical attention, whether for minor or major (or imaginary) problems, is naïve.  Spending will rise, adding more pressure to keep spending down.  The only outcome for that will be some sort of rationing.  Second, to expand the number of “covered” lives by putting an additional 16 million people into the Medicaid program is some sort of sick joke.  Doctors are turning away new Medicare “customers,” so what do you think they are going to do with Medicaid customers?  Welcome them with open arms?  Provide their services at an even steeper discount than the discount that is already forced upon them by traditional insurers?  We think not.  Medicaid is as broken as Medicare and Social Security (actually, the latter two are worse off financially).

And that brings us to the one part of ACA that SCOTUS did overturn, and that was the requirement that states could not opt out of the expanded Medicaid program without jeopardizing their entire federal Medicaid fund ing, since Medicaid has always been a joint state/federal program.  With the ruling by SCOTUS, states can opt out of expanded Medicaid coverage and not lose any of their current federal match funding.  And one would think it’s a good deal for states, since the feds will pay 100% of the increase for the first three years, 95% for the next couple of years and then 90% in 2020.  And since so many politicians are short-sighted, they may look at this as free money, and free expanded health care, for the low-income population in their states................Want to read more? Click here for a free trial to The SeniorCare Investor and download the current issue today