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The latest news on Obamacare from Business Insider

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    Anthony Kennedy

    The Supreme Court heard arguments Wednesday morning in a case that could gut Barack Obama's signature healthcare law, and legal experts are focusing on one comment from Justice Anthony Kennedy.

    Kennedy, a key swing voter, said during the first half of oral arguments on Wednesday morning that he saw a "serious Constitutional" question with the interpretation of the Affordable Care Act (ACA) set forth by the plaintiffs who are trying to strike it down.

    "If that's Kennedy's view of the case, there's almost no chance that the challengers can win," UCLA constitutional law professor Adam Winkler told Business Insider.

    The fight over the ACA centers on whether the federal government can keep subsidizing insurance in the roughly three dozen states that have not set up their own insurance marketplaces. The health law laid out a plan in which states set up their own exchanges but said the federal government could step in and set up the exchanges for the states if they could not do it on their own.

    In reality, 34 states have not set up their own exchanges. Opponents of Obamacare now say the law allows subsidies only in states in which a healthcare exchange has been "established by a state."

    If the opponents win, people in those states would lose their health insurance unless the states set up their own exchanges. Kennedy appears to have a problem with that scenario because it would effectively coerce states into setting up their own exchanges if they wanted their citizens to have insurance. Kennedy doesn't like that because he is a big fan of federalism.

    “There is a serious constitutional problem here if we adopt your position," Kennedy told the lawyer for the plaintiffs, according to The New York Times.

    From SCOTUSBlog:

    Simply put, Kennedy expressed deep concern with the federalism consequences of a reading that would coerce the states into setting up their own exchanges to avoid destroying a workable system of insurance in the state. 

    The high court will issue its opinion in the next few months, and all eyes will be on Kennedy and Chief Justice John Roberts, a conservative who surprised everybody in 2012 when he voted to save Obamacare.

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    Elena Kagan

    The Supreme Court heard oral arguments Wednesday in a case that could severely damage healthcare reform in America, and Justice Elena Kagan asked a clever question that drew laughter and exposed the logical weakness in the latest Obamacare challenge.

    The case will determine whether the US can keep subsidizing health insurance for people in 34 states whose insurance exchanges are run by the federal government.

    One section of the law says people buying insurance through exchanges "established by the state" get subsidies; the law's opponents contend this means that those buying insurance through exchanges set up by the federal government don't get subsidies.

    Kagan's question, however, seemed to suggest those four words shouldn't be taken literally. From the transcript:

    So I have three clerks, Mr. Carvin [the lawyer for the challengers]. Their names are Will and Elizabeth and Amanda. Okay? So my first clerk, I say, Will, I'd like you to write me a memo. And I say, Elizabeth, I want you to edit Will's memo once he's done. And then I say, Amanda, listen, if Will is too busy to write the memo, I want you to write such memo.

    Now, my question is:  If Will is too busy to write the memo and Amanda has to write such memo, should Elizabeth edit the memo? [Laughter]

    The obvious answer is that yes, Elizabeth should edit the memo.

    Here's Kagan's point. The ACA asked states (in her example, her clerk Will) to set up health exchanges that would get federal subsidies ("edits" by Elizabeth the clerk).

    But the law also specified that the federal government (equivalent to Amanda) could step in and set up the marketplaces if the states couldn't. Those marketplaces still need the subsidies to operate in the same way the memo needed Elizabeth's edits.

    Kagan was not the only justice who had tough questions for the lawyer opposing Obamacare. Justice Anthony Kennedy, a key swing vote, said Wednesday he saw a "serious Constitutional" issue with the position taken by the latest opponents of the ACA.

    Here's Kennedy's problem: Under the interpretation put forth by the law's opponents, states will effectively be coerced into setting up their own exchanges if they want their citizens to have insurance.

    "If that's Kennedy's view of the case, there's almost no chance that the challengers can win," UCLA constitutional law professor Adam Winkler told Business Insider.

    It will most likely be a few months before a decision comes down in this case, and everybody will be watching Kennedy and Chief Justice John Roberts, who surprised everybody by joining the liberals to save Obamacare in 2012.

    SEE ALSO: This comment from Justice Kennedy could signal a win for Obamacare

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    Antonin Scalia

    The Supreme Court heard oral arguments Wednesday in the latest dispute over President Obama's signature healthcare reform law, and Justice Antonin Scalia trashed how the law was written.

    "This is not the most elegantly drafted statute," Scalia said during oral arguments. "It was ­­it was pushed through on expedited procedures and didn't have the kind of consideration by a conference committee, for example, ... that statutes usually do."

    The latest debate over Obamacare turns on whether the US can subsidize insurance for people living in the 34 states with exchanges that were set up by the federal government. Scalia, like most of the other conservative justices, is expected to rule with the opponents of Obamacare.

    The case famously involves just four words of the law. One part of Obamacare says people who buy insurance through marketplaces "established by the state" get subsidies; opponents say that means people living in states with marketplaces set up by the federal government don't get subsidies.

    Indeed, a literal reading of that section of the law would suggest that people in the 34 states without state-run exchanges wouldn't get subsidies. However, that reading of the law means that an estimated 8 million people will lose their health insurance; that's probably not what Congress intended.

    Why didn't the law include four more words to the clause regarding subsidies ("or through the federal government")?

    Scalia — who described the law's "imperfections"— may have a point. The 800-page bill might not be perfect.

    Still, the Affordable Care Act might withstand this latest round of scrutiny if potential swing voters Justice Anthony Kennedy or John Roberts vote to save it.

    In 2012, Roberts surprised many people by upholding another key part of Obamacare: the mandate that most people buy insurance or pay a penalty. The court is expected to issue a decision in the recent case by June.

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    ObamacareAmerica's health-care system is the costliest in the world, gobbling up 17% of GDP. The average for rich nations is only 9%; even the French spend less than 12%. Despite this avalanche of cash, one American in ten has no cover and American life expectancy, at 79, is four years worse than Italy's.

    The Affordable Care Act of 2010, better known as Obamacare, was supposed to deal with these problems. Five years later, Barack Obama's most important domestic reform is unpopular (56% of Americans disapprove of it) and under renewed attack. This week the Supreme Court heard yet another legal challenge.

    In King v Burwell, the law's opponents argue that its subsidies for individuals buying health insurance on the federally organised online exchanges are illegal (see page 40). They are unlikely to prevail but, if they do, the law will be gutted and the insurance market thrown into turmoil.

    That would be a terrible shame, for Obamacare appears to be working better than expected. First, despite the incompetent rollout of healthcare.gov (the website that allows people to use the federal exchanges), the proportion of Americans who lack cover has fallen from 16.2% to 12.3% since 2009.

    Second, the previously terrifying pace of medical inflation has slowed. The amount that America spends on health care grew by 3.9% a year in nominal terms between 2009 and 2011--having grown by 7.3% a year in 2000-08. The trillion dollar question is: how much of this squeeze is because of Obamacare?

    Not all, clearly. The economic downturn accounted for much of the fall in health-care inflation: 77% by one estimate, 37% by another. Yet Obamacare also played its part. For one thing, it may have helped trim some of the fat from Medicare, the bloated public-health scheme for the old. Many hospitals appear to have changed the way they behave in anticipation of the law.

    The old rule of thumb for American health care--and particularly for Medicare--was that doctors were paid for every test and surgical procedure, and so performed many that were unnecessary.

    The new law has provisions that encourage them to keep people well; for example, it imposes penalties on hospitals where patients are frequently readmitted. Hospitals are merging, streamlining and restraining their enthusiasm for buying all the latest expensive equipment (see page 61). A new paper in Health Affairs shows that they have improved productivity in the past decade, and especially since 2009.

    obamacare protest supreme court

    Annual spending per Medicare beneficiary has fallen in real terms from $12,000 in 2011 to an estimated $11,200 in 2014. This is highly unusual--the last time Medicare spending fell was in the late 1990s. Granted, Medicare beneficiaries are healthier than they were, since swarms of baby-boomers have pulled down their average age.

    But the programme has also grown more efficient. The Congressional Budget Office projects that Medicare spending per head will be no higher in 2020 than it is now. By then, spending on Medicare and Medicaid (cover for the poor) could be $160 billion a year less than previous estimates. In the wider market, too, health inflation is subdued (see page 39).

    Plenty more flab to trim

    As Americans age and Obamacare continues to extend coverage, federal outlays on health will probably start to grow again as a share of GDP over the next decade. America still spends far more than it needs to on health care, as the gap with other nations shows. But there is hope at last that health inflation can be made more manageable. Scrapping Obamacare and starting again from scratch would make this harder. Far better to build on what appears to be working. For the Supreme Court to rule for the challengers would be a woeful outcome.

    Click here to subscribe to The Economist.

    This article was from The Economist and was legally licensed through the NewsCred publisher network.

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    obamacare

    WASHINGTON (AP) — Several million people hit with new federal fines for going without health insurance will get a second chance to sign up starting Sunday, and that could ease the sting of rising penalties for being uninsured.

    But as the enrollment window reopens, it's unclear how many know about the time-limited opportunity, let alone will take advantage of it.

    Fines payable to the IRS are the stick behind the offer of taxpayer-subsidized private insurance under President Barack Obama's health care law. Virtually everyone in the country is now required to have coverage through an employer or a government program, or by buying individual policies.

    This is the first year fines are being collected from uninsured people the government deems able to afford coverage. Tax preparation company H&R Block says the penalty averages about $170 among its affected customers. It usually is deducted from a person's tax refund.

    Those penalized are mainly the kind of people the law was intended to help: low- and middle-income workers who do not have coverage on the job or are self-employed. Roughly 4 million people are expected to pay fines, according to congressional estimates. Many more will qualify for exemptions.

    Travel agent Charles Baxter of Phoenix said his tax refund was reduced by $247 for being uninsured in 2014. He had not heard about the second chance to sign up for 2015 coverage.

    Baxter says he will take another look now, but is not sure whether he will opt to buy insurance. Much of his income goes to help take care of his mother, who has health problems.

    "I may have to see if any of the health care costs have changed, to where I might be able to squeeze it in," he said. "But so far, it's not looking like it."

    Baxter supports the overall goals of the health law, but says the government should also look at someone's expenses — not just income — before assessing the fine.

    Penalties for being uninsured are going up this year, to a minimum of $325 for the full 12 months. That's a significant increase from the $95 minimum in 2014.

    The new sign-up opportunity runs through April 30. To qualify, individuals have to certify to the government that they meet certain conditions, including:

    • They did not know or understand that they were legally required to have coverage until after open enrollment officially ended Feb. 15.
    • They owed a penalty for being uninsured in 2014.

    Those requirements are for the 37 states served by the federal HealthCare.gov website. States running their own insurance exchanges may have different rules and deadlines. Penalties for 2014 are not refundable.

    The Obama administration acted after Democratic lawmakers raised concerns. With open enrollment officially over, someone who was uninsured and filed a tax return after Feb. 15 would not have been able to get coverage for 2015. That person would owe the penalty for 2014 and could get locked into a bigger fine for 2015.

    "Most people can assume that whatever they paid this year, next year they will pay twice that much or more," said Rep. Lloyd Doggett, D-Texas. "Why pay what is in essence a penalty, when you can be applying those dollars to protect your family?"

    The administration is publicizing the special sign-up period as tax filing season continues. For customers who paid a fine, major tax preparation companies are notifying them about the second chance to get coverage.

    Tax preparers and some public policy experts have urged the government to move the health care law's sign-up period so it dovetails with tax-filing season. People expecting a refund might be willing to spend some of it on health insurance.

    Mark Ciaramitaro, vice president of health care services at H&R Block, said the penalty is definitely getting taxpayers' attention. "It's a surprise," he said. "For some people, it's having significant effects."

    Cari Gerrits of Atlanta was uninsured for part of last year when she was between jobs, and her penalty ended up being $191. She has coverage now through her job in marketing and business development for an engineering company.

    "I'm supportive of having a baseline of care for everybody," she said. "But the marrying of a very complicated medical law with an already confusing tax law has probably not made it as popular as it could be."

    Jesse Bracewell of Huntsville, Alabama, was uninsured last year because he could not fit premiums into his budget as a college student finishing an engineering degree. He paid a penalty of $95. This year, he signed up to avoid rising fines.

    "That penalty set me back about three weeks' worth of gas," Bracewell said.

    ___

    Associated Press Social Media Editor Eric Carvin contributed to this report.

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    AP459404283203

    WASHINGTON (AP) — House Republicans launched a boldly conservative 10-year budget plan on Tuesday that would favor the Pentagon, partially privatize Medicare and rely on deep cuts in other social programs to help wipe out deficits at the end of a decade.

    A little more than four months after winning their largest majority in 70 years, Republicans promised an overhaul of the federal tax code and called for repeal of two of the top legislative achievements of President Barack Obama's tenure in office.

    Those are the health care law known by his name and a measure enacted to crack down on Wall Street after the economy's near-collapse in 2008.

    Republicans said their balanced-budget promise came with no tax increases, though the fine print assumes the expiration of about $900 billion in breaks for business research and development and other items.

    "The new normal of slow economic growth and low expectations is unacceptable. We know we can do better," the House Budget Committee, chaired by Rep. Tom Price of Georgia, said in a report accompanying the proposal.

    It promised "greater prosperity, opportunity, security and freedom" if enacted.

    Projected spending for the budget year that begins on Oct. 1 was $3.8 trillion, rising to $5 trillion in 2025.

    Obama countered Republican claims instantly. He said the GOP prescription "is a failure to invest in education, infrastructure and national defense — all the things we need to grow, to create jobs, to stay at the forefront of innovation and to keep our country safe."

    obama boehnerThe president's own budget calls for about $2 trillion over 10 years in higher taxes on corporations, wealthy individuals and smokers of all income levels as part of a plan to increase spending and give tax breaks to the middle class.

    Rhetoric aside, the release of the tax and spending plan in the House begins a rite of spring as reliable as the appearance of daffodil shoots on the Capitol grounds.

    Senate Republicans intend to outline their own plan on Wednesday, and each house is expected to ratify its own version next week.

    After that comes the harder challenge of forging a compromise between the two versions, a task that Republicans acknowledge will mark a test of their ability to govern now that they control both houses of Congress.

    An even more difficult challenge follows, the translation of policy objectives into legislation that would be sent to Obama to sign or — more likely — veto. The budget also is certain to become an issue in the still-early race for the White House in 2016.

    The House budget relies heavily in some areas on previous plans put together by Price's predecessor as committee chairman, Rep. Paul Ryan of Wisconsin.

    Paul Ryan It also adapts to changing political circumstances, most notably by offsetting a looming automatic budget cut in national security accounts.

    The proposal would allow spending in the coming budget year of $36 billion more than Obama recommended for overseas military and diplomatic efforts.

    Less than half of the $36 billion would be guaranteed, and the rest would depend on offsetting spending cuts elsewhere in the budget.

    Some Republicans and outside groups bristled at the prospect of so large an increase, tucked into the budget in an account for overseas operations that is not subject to spending caps designed to hold down deficits.

    "I'm tired of seeing gimmicks in the budget process," said Rep. Justin Amash of Michigan, a conservative and frequent critic of his party's leadership.

    Justin AmashAt the same time, the added funds could gain support for the budget from pro-Pentagon lawmakers for whom military spending is a top priority.

    As in prior budgets, the House GOP budget calls for transforming Medicare into a voucher-like program for seniors who join the health care program beginning in 2024. They would receive a subsidy to purchase coverage, a step that Democrats say would effectively end the current guarantee of services pegged to a pre-determined level.

    In all, Republicans said they would cut spending by nearly $5.5 trillion over the next decade.

    By far the largest portion of that, $2 trillion, would come from repeal of the health care law that the administration said last week has meant coverage for 16.4 million previously uninsured people. Republicans pledge a replacement, but so far have offered no specifics.

    An additional $900 billion would come from other health care programs including Medicaid, which provides health care for the low-income. As in prior years, Republicans proposed transforming Medicaid and food stamps into state-run programs that receive lump sum funding from the U.S. Treasury.

    An estimated $1 trillion in savings would come from other benefit programs, but the committee detailed none of them.

    Much of the balance of the savings would be derived from general government programs that have borne the brunt of other deficit-cutting efforts in recent years, and from lower interest costs resulting from a decline in projected deficits.

    Yet Republicans also estimated an additional $147 billion in tax revenues if their policies were enacted, an amount that allows them to project modest surpluses in 2024 and 2025.

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    Worried Americans 001 cc3818625288

    Americans are worried – about a great many things.

    A new Gallup poll shows that Americans are increasingly concerned about terror attacks and race relations (serious concern about each is up by 10 percent, year-on-year).

    At the same time, our fears about the overall state of the economy, unemployment, the availability of healthcare and other essentially financial issues have all either leveled off or dropped somewhat.

    The number of those who worry “a great deal” about the state of the environment has stayed essentially the same and markedly low compared to other issues.

    This is the first year Gallup has tracked how many Americans worry about income disparity. Around 46 percent of respondents claimed to have serious concerns about the distribution of wealth in the United States. Even though the number of people who worry about the price of healthcare is down slightly (since Obamacare kicked in, it should be noted), it still represents our greatest concern.

    Of the respondents surveyed, 54 percent of them listed the availability and cost of healthcare as something they worry “a great deal” about.

    the big worry chart

    SEE ALSO: RANKED: The 50 US state economies from worst to best

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    Ted Cruz

    Presidential candidate and Sen. Ted Cruz (R-Texas) is set to sign up for insurance coverage under Obamacare.

    "We will presumably go on the exchange and sign up for health care and we're in the process of transitioning over to do that," Cruz told The Des Moines Register on Tuesday.

    Cruz, a staunch conservative, has repeatedly called for Congress to repeal "every last word" of President Barack Obama's signature healthcare law.

    Cruz previously received healthcare coverage through his wife's employer, Goldman Sachs. However, after he announced his presidential campaign on Monday, it was revealed that Heidi Cruz will take an unpaid leave of absence from the investment firm. As Cruz noted to the Register, members of Congress are required to purchase healthcare through the new exchange set up through the Affordable Care Act. 

    "Well, it is written in the law that members will be on the exchanges without subsidies just like millions of Americans so that's – I think the same rules should apply to all of us. Members of Congress should not be exempt," he told the Iowa paper. 

    He also repeated his call for the healthcare law to be repealed in its entirety. 

    "I believe in 2017 a new president, a Republican president will sign legislation repealing every word of it. There are a fair number of Republicans in Washington and elsewhere who have quietly and privately given up on that fight and I have not," he said.

    For their part, Democrats appeared to be amused by Cruz's situation. The Democratic National Committee fired off the Register article to reporters with a subject line referencing the number of people who gained coverage through the law:  "16.4 million + 1." 

    SEE ALSO: Someone made a hilarious 'Imagine' mashup of Ted Cruz and John Lennon

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    Former Governor of Texas Rick Perry speaks at the Freedom Summit in Des Moines, Iowa, in this file photo taken January 24, 2015. REUTERS/Jim Young/Files

    WASHINGTON (Reuters) - Several Republican governors likely to run for president have secured hundreds millions of dollars under Obamacare while working to dismantle the healthcare law, according to a Reuters review of federal spending records.

    Governors Scott Walker of Wisconsin, Chris Christie of New Jersey, Bobby Jindal of Louisiana and former Texas Governor Rick Perry, all staunch opponents of President Barack Obama's 2010 Affordable Care Act, have collectively applied for and won at least $352 million through grant programs set up by the law, federal records show.

    The action is at odds with the public stance of all four potential candidates, who have blasted the law as an unprecedented expansion of government and called for its repeal.

    Aides told Reuters they saw no contradiction in applying for these grants while criticizing the law as a whole.

    "It's critically important that we continue these services for our citizens," said Walker spokeswoman Laurel Patrick. "Receiving federal grants that existed prior to the ACA is not the same as participating in the core elements of the ACA."

    The money in question stems from less controversial parts of the law that enhance public health and other nuts-and-bolts programs, rather than the insurance exchanges and expansion of the Medicaid program for the poor that have drawn fierce opposition from Republicans.

    Some of these programs were established by Obamacare, while others had existed in other forms and were expanded by the law.

    Obamacare graphic

    For example, the law included $1.5 billion to enable medical workers to visit new mothers at home. The money has enabled some states to set up programs where none had existed and allowed others to expand existing programs. Wisconsin has more than doubled its home-visit program under Obamacare, according to state documents.

    It's not clear whether the Republican governors now considering running for the White House would protect these programs if they won the November 2016 presidential election.

    Aides to Walker, Christie and Perry either declined to comment or didn't respond. A Jindal aide said these programs would work better if states were given more discretion over how to spend federal money.

    obamacare

    UNITED IN OPPOSITION

    Republicans have been united in their opposition to the healthcare reform since it passed Congress with only Democratic votes five years ago, and many potential presidential candidates are eager to demonstrate their anti-Obamacare bona fides.

    Walker has called the law an "abysmal failure" and Perry has blasted it as an "abomination." Christie called it a "failure" and Jindal told a gathering of conservative activists in February that "we must repeal every single word of Obamacare."

    Walker, Perry and Jindal also supported a legal challenge that fell short of striking down the law in 2012 but enabled states to opt out of the Medicaid expansion.

    Still, Republican governors have to balance their opposition to the law with their obligation to look after the needs of their states.

    The federal government accounts for nearly one in three dollars of state revenue, and the Affordable Care Act has been an important source of much of that money in recent years. It provides $10 billion for public health and $425 million to train nurses and other health-care workers.

    The money isn't handed out automatically: state governments, hospitals and other organizations have to apply for it.

    "There's a lot of hypocrisy when it comes to some Republicans and Obamacare," said Greg Valliere, a nonpartisan political adviser to Wall Street clients. "As my father used to say: 'Do as I say, not as I do.'"

    Walker's administration has accepted at least $69 million through Affordable Care Act grant programs, according to a Reuters analysis — a figure that does not include programs that the U.S. Health and Human Services Department says existed before the law took effect. It also excludes grants that went to state universities or other entities not directly under Walker's control.

    During that period, Walker returned $38 million that his Democratic predecessor had secured to set up a state-based insurance exchange, and turned away hundreds of millions of dollars to help expand Medicaid. He expanded the state's own Medicaid program to cover more residents without federal money, in part by moving 80,000 participants onto private insurance plans subsidized by Obamacare.

    In Louisiana, Jindal's administration has accepted $60 million in Obamacare grants while refusing to expand Medicaid and set up a state exchange. "Most of these grant funds are used for state initiatives that existed long before Obamacare ever became law," Jindal spokesman Mike Reed said.

    In Texas, Perry took in at least $148 million in Obamacare grants while refusing money tied to the insurance exchange and the Medicaid expansion. He stepped down as governor in January.

    "Governor Perry has long called for flexibility from the federal government so the states can implement health care programs in the best interests of their citizens," spokeswoman Lucy Nashed said.

    In New Jersey, Christie has not set up an exchange but has accepted the Medicaid expansion on the grounds that it will help low-income residents and hospitals in his state. His administration has secured at least $75 million in grant money, on top of the additional Medicaid dollars.

    "The governor has said he will make decisions with respect to the law that are in the best interest of New Jerseyans," spokesman Kevin Roberts said. 

    (Additional reporting by Luciana Lopez, editing by Ross Colvin)

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    barack obama thumbs up

    Within recent memory, there are few laws that have been as polarizing as Obamacare -- known officially as the Patient Protection and Affordable Care Act.

    On one hand, the majority of Americans simply don't hold a favorable view of Obamacare, at least in its current form. Based on the March update from the Kaiser Family Foundation's Health Tracking Poll, 43% of respondents still have an unfavorable view of Obamacare, compared to 41% of respondent who have a favorable view of the health reform law.

    This two percentage point gap is actually the smallest it's been in more than two years, but it still demonstrates that there are more Americans who aren't a fan of Obamacare or its individual mandate than Americans who like the law.

    On the flipside, Obamacare has at least partially held true to some of its goals in the early going. Americans may not like this law, but according to Gallup, it's lowered the uninsured rate to just 12.9% as of the fourth-quarter of 2014 -- down from 17.1% a year ago.

    With nearly 12 million people enrolling in the Nov. 15, 2014 - Feb. 15, 2015 period, it's possible this figure could shrink even more when Gallup releases its first quarter update. Furthermore, it's possible the marketplace transparency and added choices for consumers are helping to keep medical cost inflation at a minimum -- another goal of the law. The Great Recession certainly played a role in taming the rate of medical cost increases, but it's plausible that Obamacare is having an effect too.

    obamacare

    In case you missed it...

    Regardless of whether you're a supporter or opponent of Obamacare, you may have missed an important "ruling" from the U.S. Supreme Court earlier this week that resulted in Obamacare logging a key victory.

    The case, Coons vs. Lew, was initially brought to court in 2011 by business owner Nick Coons and orthopedic surgeon Dr. Eric Novack. The two, with the help of additional legal backing, alleged that the Independent Payment Advisory Board, or IPAB, would trim Medicare costs and potentially hurt their business by instituting reimbursement levels that wouldn't cover their own expenses. These allegations are where the term "Obamacare death panel" emerged, as the 15-member government panel would be in charge of potentially cutting Medicare rates in the future.

    Additionally, plaintiffs argue, none of the 15-member panel has been appointed yet (meaning the Obama administration and the Department of Health and Human Services would handle all 15 appointments), and their reimbursement rulings wouldn't be challengeable in court. The plaintiffs in this case also went after the context of the individual mandate, attempting to overturn the actionable penalty aspect of the ACA.

    obamacareIn August 2014, the 9th U.S. Circuit Court of Appeals in San Francisco dismissed the case by noting that that the IPAB didn't do any direct harm to either Nick Coons' business or Dr. Eric Novack. Furthermore, the Court ruled that the earliest point at which the IPAB would assert its power and potentially reduce Medicare reimbursements would be in 2019.

    Earlier this week the U.S. Supreme Court upheld the decision of the San Francisco-based Appeals Court by declining to hear the so-called "death panel" case, confirming that the existence of the IPAB isn't sufficient grounds to overturn or modify Obamacare. The high court also declined to hear any challenges to the individual mandate.

    This case was particularly interesting from the aspect of diagnostic device makers, as they're just as likely to be affected by Medicare cuts five years or more from now.

    For example, Exact Sciences' noninvasive DNA colon cancer screening diagnostic Cologuard received Medicare reimbursement approval from the Centers for Medicare and Medicaid Services last year, with a reimbursement amount of $502 per test. This was higher than Wall Street initially thought Exact Sciences would get for its test, and pretty much right on par with what Exact Sciences was asking for. However, with Obamacare intent on trimming its government-sponsored ties with third-party businesses, it's possible the reimbursement amount for this potentially life-saving diagnostic test could fall in the future.Obamacare graphic

    A bigger challenge looms

    Although Obamacare proponents can relish this week's victory, a significantly bigger challenge looms this June when the Supreme Court is expected to make its ruling on King vs. Burwell.

    The plaintiffs in this case are alleging that the subsidies being paid out to qualified enrollees via the federally run Healthcare.gov are illegal. The plaintiffs argue that the language of the ACA allows "states" to pay out subsidies to qualified individuals, while Healthcare.gov is operated by the federal government -- which is not a state.

    If the Supreme Court rules against the plaintiffs it's unlikely we'll see anything change with regard to Obamacare. However, if the plaintiffs are victorious in this case, it would invalidate subsidy payments to nearly seven out of eight Healtcare.gov enrollees. To add some context to this, we're talking about somewhere between 7 million and 8 million members suddenly losing their subsidies -- a subsidy, mind you, which averaged $264 per month in 2014 and brought the cost of a monthly premium to $82. It's likely that few of these subsidy recipients would be able to continue paying their monthly premium, and it could seriously threaten the long-term existence of Obamacare.

    A ruling in favor of the plaintiffs would also be bad news for healthcare investors. Insurer Anthem has been one of the biggest beneficiaries of Obamacare, so it would potentially have the most to lose if Healthcare.gov's subsidies were deemed illegal. Its saving grace could be that it has a strong base of commercial and private insurance members as well beyond just Obamacare.

    Once again, diagnostic developers could be hit hard, especially those catering to chronic conditions like hepatitis C, where many people are still unaware they have the disease. OraSure Technologies has a point-of-care test that can with greater than 98% accuracy diagnose a patient as hepatitis C positive or not in approximately 20 minutes. It's a quick diagnosis that may not happen if subsidies are taken away from millions of Americans. 

    While Obamacare proponents can breathe easier with one challenge now settled, the ruling expected this June by the Supreme Court really could go either way, as it depends solely on the interpretation of a few sentences of written law. I, for one, would urge investors to be cautious leading up to this verdict, and perhaps even stick to the sidelines until we have better clarity on what the future may hold for Obamacare.

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    retail sales

    Yesterday’s March retail sales report was certainly disappointing. It suggests that the winter’s big chill has turned into the spring’s sloppy soft patch. Bond yields fell on the news, which might force the Fed to postpone liftoff from mid-year to later this year.

    The weakness in retail sales from December through February didn’t jibe with the strength in employment and consumer confidence. Another surprise was that the windfall from falling gasoline prices didn’t show up in better spending in other retail categories. Then March employment data turned weak, and the month’s 1.0% gain in retail sales excluding gasoline (to a new record high) wasn’t much of a spring rebound following the 0.8% decline from December through February. Even worse, on an inflation-adjusted basis, core retail sales (excluding autos, gasoline, and building materials) fell 1.3% saar during Q1.

    What’s the problem?

    It might be our health. American consumers now spend a record $8,066 per capita annually on health care. Thanks to Obamacare, we are all paying more to the piper. The out-of-pocket costs of health care have increased significantly, with higher premiums and co-pays and bigger deductibles. Unfortunately, it’s hard to quantify this because statistics are not available. The government’s data show total spending on health care without showing payments made by the government, insurance companies, and consumers.

    health care costs

    Today's Morning Briefing: Paying the Piper. (1) T-Day! (2) Road crews filling potholes on a hit-or-miss basis. (3) It’s good to be king. (4) Who pays taxes? (5) From winter’s ice patch to spring’s soft patch. (6) Postponing liftoff? (7) Not much spring in March retail sales. (8) Health care out-of-pocket outlays infecting retail sales? (9) Excluding energy, revenues growth holding up. (10) Lots of geopolitical hot spots. (11) Talking points vs. wish lists. (12) Focus on market-weight-rated S&P 500 Retail. (More for subscribers.)

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    Screen Shot 2015 04 15 at 6.02.10 PMYouTube user and gun channel host James Webb confessed to his viewers this week that he'd been grappling with uncertainty about who to vote for in the upcoming 2016 presidential election.

    Webb discussed his struggle in a video entitled "This Tea Party Patriot May Vote For Hillary," which was uploaded on Monday to his channel "Hot Lead retired."

    "Hello, YouTube. I'm kinda having a difficult decision," Webb lamented in the 3-minute video. "I don't know which party to vote for. ... I don't know whether to go for a Republican or a Democrat -- and I'm serious. Because I asked myself, I said, 'Which party has helped me out the most in the last, I don't know, 15 years? Twenty?' And it was the Repub-, err, Democrat Party. The Democrats."

    "I mean if it wasn't for Obama and that Obamacare, I would still be working," Webb continued. "With Obamacare, I got to retire at age 50. Because if it wasn't for Obamacare I would had to work till I was 65 and get on Medicare because health insurance is expensive."

    Webb stressed how valuable it was that he'd been able to retire so early and still had health care coverage. He also noted that Obamacare reimburses him for his gym membership.

    "It's some kind of healthy lifestyle plan, program," Webb said. "So I mean, you know, I got, I'm trying to work out and exercise a little bit and lose some weight 'cause I'm retired now. I got all kinds of time to go to the gym, swim, you know, lift a little weights, do some little walking, run track, stuff."

    Webb also bemoaned the fact that he couldn't put his faith in the Republican Party any longer.

    "The Republican Party they ain't done nothing for me, man. Nothing," Webb said. "So, I'm leaning toward voting for Hillary. Unless something major comes up. I don't trust the Republicans anymore. They're wanting to repeal the Obamacare. And, I don't want them to do that, man, 'cause then I'll have to go to work again."

    "My life's already planned out," Webb added.

    Webb said he'd voted for Republicans for 32 years, was a "charter member" of his Tea Party Patriot chapter and was a veteran of the U.S. Army "under Reagan" but pointed out that "things have changed."

    "Unless the Republicans change with it, I'm probably gonna have to swing my vote over toward Hillary."

    Watch the video below, courtesy of Webb's YouTube channel:

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    Ron Johnson

    In a little-noticed radio interview, Sen. Ron Johnson (R-WI) articulated the GOP's biggest fear if the Supreme Court wipes out Obamacare tax credits for millions of Americans who buy insurance from the federal HealthCare.gov exchange.

    The fear: President Barack Obama and Democrats will be ready with a one-page bill to restore the subsidies, as well as a slew of attack ads telling horror stories about "individuals that have benefited from Obamacare on the backs of the American taxpayer" and lost their coverage, the Republican said.

    Here's the transcript from the April 14 interview radio interview, in which Johnson is asked a question by host Jay Weber about King v. Burwell.

    JOHNSON: Unfortunately, President Obama's response to an adverse decision — in other words one that actually follows the law — would be really simple. Just a one-sentence bill allowing people’s subsidies to flow to federal exchanges and/or offer the governors, 'Hey, we know you got those federal exchanges. Just sign the bottom line. We’ll make those established by the state.' And of course, he'll have the ads all racked up with the individuals that have benefited from Obamacare on the backs of the American taxpayer. He'll have all those examples as well so...
    WEBER: And the sad sack stories about who's dying from what and why they can’t get their coverage.
    JOHNSON: Right.
    WEBER: Oh yeah.

    Below is audio from the interview, which was clipped by the pro-Democratic opposition research group American Bridge.

    Johnson's point was that Republicans must be ready with an effective response if the Court sides with their interpretation of the law and restricts the subsidies to state-run exchanges. So far, GOP leaders have sketched out ideas to mitigate the damage in such a scenario but appear short of a legislative solution that could unite the party. A ruling is expected by the end of June.

    Johnson, who's seen as one of the most vulnerable senators facing reelection, expounded on those fears in an April 13 op-ed in the Wall Street Journal, which some Republican aides and Sen. Ben Sasse (R-NE) have also expressed.

    "What will happen next is predictable: A deluge of attacks on Republicans for supposedly having caused this," Sasse wrote in a Feb. 25 op-ed for the Journal. "Daily White House emergency briefings. Liberal interest-group ads of wheelchairs going over cliffs. President Obama’s cheerleaders in the media screaming that ideologues are killing patients."

    SEE ALSO: BILLIONAIRE FUND MANAGER: It's 'ridiculous' that I could get a $2,500 Social Security check

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    obamacare protest supreme court

    WASHINGTON (AP) — Republican or Democrat, the next president will have the chance to remake the nation's health care overhaul without fighting Congress.

    The law signed by President Barack Obama includes a waiver that, starting in 2017, would let states take federal dollars now invested in the overhaul and use them to redesign their own health care systems.

    States could not repeal some things, such as the requirement that insurance companies cover people with health problems. But they could replace the law's unpopular mandate that virtually everyone in the country has health insurance, provided the alternative worked reasonably well.

    A Democrat in the White House probably would use the waiver to build bridges to Republican governors and state legislators opposed to the law. The "state innovation" provision, Section 1332 of the nearly 1,000-page law, has gotten little public attention.

    But "you would be hard pressed to find a state that doesn't know what Section 1332 is," said Trish Riley, executive director the National Academy for State Health Policy, a nonpartisan forum for state policymakers. "It provides some opportunity for taking the rough edges" off the Affordable Care Act, as the law is known.

    For a Republican president, state waivers could be the fallback option to avoid the political cost of dismantling Obama's law and disrupting or jeopardizing coverage for millions of newly insured people, not to mention the upheaval for insurers, hospitals and doctors.

    "If you were a Republican on record as opposing or wanting to repeal the ACA, but really felt deep down that you couldn't accomplish that even as president, then you could say your second preference would be to use this provision to go down a completely different road," said Stuart Butler, a health policy expert at the nonpartisan Brookings Institution.

    Butler, who was with the conservative Heritage Foundation for 35 years, has long been a voice for Republican thinking on health care policy. "The short answer is, this presents a tremendous opportunity for either party," he said.

    The state waiver was the idea of Oregon Democratic Sen. Ron Wyden, who has a record of crossing party lines in search of ways to tackle health care costs and coverage.

    Waivers would not be a blank check.

    In addition to preserving the health care law's protection for people with health problems, states would have to cover about the same number of residents while providing comprehensive benefits and financial safeguards against ruinous costs. States also could not add to the federal deficit.

    Obamacare

    States meeting those tests could take hundreds of millions of dollars in health insurance subsidies provided under Obama's law and shift them. They could:

    • Eliminate or change the penalties the federal law imposes on people who remain uninsured, and on larger businesses that don't offer coverage.
    • Modify benefits and subsidies. For example, states could figure out different ways to subsidize premiums for their residents. The federal health insurance tax credit has been difficult for the government to administer, and for consumers to understand.
    • Do away with or change online health insurance markets, also called exchanges.

    States could combine the innovation waiver with Medicaid and children's health insurance proposals to create a "super waiver." That could be of particular interest to states that are experimenting with different approaches under the health law's Medicaid expansion.

    Riley said so far there is interest in the waivers among state officials in Hawaii, New Mexico, Minnesota and Vermont. But the Obama administration has yet to issue regulations that would set the ground rules for granting them.

    "This could be a way for states with very different political perspectives to use the resources provided by the ACA and help the country come to a resolution of this whole question," said Stan Dorn, a health policy expert at the nonpartisan Urban Institute. "Whoever is in the White House in 2017 and beyond is going to have a lot of flexibility without having to change the statute."

    Not everyone is optimistic.

    John McDonough was a senior Democratic Senate aide who helped steer the health overhaul to passage in 2009-2010, and now teaches at the Harvard T.H. Chan School of Public Health.

    If the next president is a Republican, McDonough said he does not think state waivers would provide enough leeway to satisfy the party's ideology.

    "Chances are if they hold the White House and Congress, they are going to be looking for bigger changes than monkeying around with 1332," McDonough said.

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    obamacare

    With less than one month to go until the Supreme Court issues a ruling in King v. Burwell -- the case that could dismantle Obamacare -- some states are preparing contingency plans to avert a disaster if the court strikes down access to federally subsidized health care for their residents.

    If the Court rules against the administration and says that language in the Affordable Care Act only provides subsidies to people enrolled in coverage in states that set up their own marketplaces, some 7.5 million people in the 34 states relying on the federal exchange would lose their subsidized coverage - unless Congress or state legislatures step in.

    Though some lawmakers on Capitol Hill have floated plans to keep the subsidies flowing through the federal exchange, those plans all include provisions to shift away from Obamacare—something President Obama would almost certainly veto.

    That leaves contingency plans up to the individual states currently relying on the federal exchange. Under the health law, states that chose to create their own exchanges got federal funding to build their own websites and pay for outreach efforts. The other 34 states decided to rely on the federal portal, HealthCare.gov.

    As the court case looms, state lawmakers are considering setting up their own exchanges or using workarounds to assure that their residents who are enrolled in health coverage on the exchange can continue receiving federal subsidies. Nearly 87 percent of all Obamacare enrollees qualify for a subsidy, depending on their annual household income. 

    Last week, Pennsylvania’s Democratic Gov. Tom Wolf announced that his state would create its own exchange in the event that the Court strikes down the federal subsidies. 

    “In order to protect 382,000 Pennsylvanians from potentially losing subsidies that help them afford health care coverage, I have written to the federal government outlining a contingency plan to set up a state-based marketplace to ensure no one loses their health coverage,” Wolf said in a statement. 

    obamacare21

    Other states, like Ohio, are considering using workarounds where they would pass language establishing a state exchange, but then rely on the federal portal’s website so they wouldn’t have to build their own. 

    Separately, some states, including Louisiana, have ruled out any kind of contingency plan. In March, Gov. Bobby Jindal penned an op-ed in National Review Online, urging his fellow Republican governors not to try to “save Obamacare subsidies.” 

    Most of the states that vowed not to set up state exchanges have Republican-controlled state legislatures or governors that staunchly oppose Obamacare.

    Of course, it’s not just politics. The cost of setting up state exchanges has weighed heavy on some states’ budgets. In fact, about half of the 17 states that set up their own marketplaces are now facing financial issues.

    California, for example, is running a deficit of $80 million on its Obamacare exchange, which has already cost $1 billion. Other states that had trouble with their websites have also run into funding issues at a time when the federal government is counting on the state exchanges to become self-sustaining this year.

    Vermont officials are contemplating switching to the federal portal, since their exchange is projected to cost about $200 million by the end of the year. 

    Speaking to reporters at a health care conference in California, Caroline Pearso, senior vice president of Avalere Health, said that states are struggling and will continue to struggle to figure out how to keep their exchanges sustainable.  

    The financial concerns for already-established state exchanges sets up a difficult decision for states relying on the federal exchange in the event of adverse Court ruling—where they will have to decide whether to find revenue sources to pay for their own exchange—or let hundreds of thousands of people lose their subsidies. Many are just waiting to see what the Court’s decision will be.

    The ruling is expected in June.

    SEE ALSO: The 16 most socially advanced countries in the world

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    Jeb BushFormer Florida Gov. Jeb Bush (R) suggested on Thursday that the Apple Watch can play a role in putting healthcare decisions back in the hands of consumers.

    Bush was in Tempe, Arizona, on Thursday and blasted Obamacare as government overreach into the healthcare choices of Americans. The likely 2016 presidential candidate has called for repealing President Barack Obama's signature healthcare law. 

    Pointing to the Apple Watch on his own wrist, Bush spoke of the gadget as an empowering healthcare tool. Alluding to the famous Apple slogan, Bush said the device could help the country "think different" on healthcare.

    "On this device in five years will be applications that will allow me to manage my healthcare in ways that five years ago were not even possible," in comments noted by Bloomberg News

    Bush went on to detail some of the features of his watch. 

    "I'll have the ability, someone will, you know, because of my blood sugar... someone will send me a signal it'll come here, I'll get a double beep saying 'you just ate a butterscotch sundae or something like that. You went way over the top. You're a diabetic, you can't do that—whatever. Ultimately, we have to get to a health system, away from a disease system," he added in comments. 

    The former Florida governor is on a strict Paleo diet and avoids sugar and processed foods.

    Bush added in his comments on Thursday that he wants to "push power back to the states" in order to "unravel" the health care reform crafted by President Obama.

    "I think that we should repeal Obamacare if given the opportunity, and replace it with a consumer directed model where people are engaged in making healthcare decisions for themselves and where they're given the tools to do so." 

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    Nancy PelosiHouse Democratic leader Nancy Pelosi predicted Wednesday that Republicans will "rue the day" if the Supreme Court buys their arguments and invalidates tax subsidies for millions of people under President Barack Obama's health care law.

    Republicans have said they will try to ensure people don't lose insurance if the high court rules this summer against tax subsidies for health care coverage in certain states. But they haven't said how they would do it.

    Such a ruling would present a major challenge to the GOP. Without a congressional fix some 8 million people could lose subsidies, which help them pay for their health insurance.

    "They're now going to then go out and say we're going to take subsidies away from people who have health care?" Pelosi said in an interview with The Associated Press in her office overlooking the Supreme Court. "No, I don't think so."

    The California Democrat, who was House speaker when the health bill became law in 2010 and was a major force behind its passage, insisted that the law was ironclad constitutionally and would not be overturned.

    "I don't think it's going to happen so it's no use speculating on what I don't think is going to happen. But it would be bad news for them, it would be really bad news for them," she said of Republicans.

    Nearly 8 million people could lose up to $24 billion a year in health insurance subsidies depending on the outcome of the Supreme Court case, King v. Burwell, which focuses on the literal wording of the complex law. Opponents say it only allows subsidies in states that set up their own insurance exchanges. Only 13 states and Washington, D.C., are running their own online insurance markets; other states rely on federal marketplaces, and tax subsidies in those marketplaces would be threatened if the court rules against the administration.

    Pelosi said she knew the law well and that opponents were relying on a phrase taken "out of context" in pressing their case before the court.

    If Republicans who oppose the law get the Supreme Court ruling they want, the onus would be on the GOP-led Congress to come up with a fix. It's not at all clear how they could do that in a way acceptable to the Obama administration and politically palatable to GOP voters heading into a presidential election year.

    SEE ALSO: Pelosi: Democrats Will Insist On Changes To U.S. Spending Bill

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    Rep. Debbie Wasserman Schultz (D-Florida), the chair of the national Democratic Party, was not impressed by a top GOP presidential contender's remarks about technology and healthcare.

    On Thursday, former Florida Gov. Jeb Bush (R) said the Apple Watch could play a role in letting consumers have more control and "think different" about their healthcare services. Wasserman Schultz, who survived breast cancer, responded the next day with a simple message on Twitter:

    Bush, an expected 2016 presidential candidate, commented on the Apple Watch while in Tempe, Arizona, for a Republican National Committee meeting. He argued that technological developments would shake up the healthcare system and help "unravel" President Barack Obama's signature healthcare law.

    "I'll have the ability, someone will, you know, because of my blood sugar ... someone will send me a signal, it'll come here, I'll get a double beep saying, 'You just ate a butterscotch sundae,' or something like that. 'You went way over the top. You're a diabetic; you can't do that' — whatever. Ultimately, we have to get to a health system, away from a disease system," he said.

    Bush's team did not immediately respond to a request for comment from Business Insider.

    SEE ALSO: Jeb Bush says the Apple Watch shows how we can eliminate Obamacare

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    pharmerica stock

    Pharmacy services company PharMerica's shares are are up more than 50% in 2015.

    This week, they reached an all-time high.

    One possible reason: People in the investment banking and healthcare industries speculate that PharMerica will soon be acquired.

    PharMerica's main business is delivering prescription drugs to nursing home. It's market cap is right around $1 billion.

    Four years ago, an even bigger company in the same business, Omnicare, tried to buy PharMerica. The Federal Trade Commission quashed the deal, saying it would hurt competition.

    Yesterday, Omnicare itself was acquired — by pharmacy giant CVS. The price tag: $13 billion.

    Now PharMerica is the last independent company in the space. Many in the industry believes it will not remain independent for long.

    "There is speculation PharMerica is going to be the next target," said Ed Buthusiem, managing director and healthcare expert at Berkeley Research Group. 

    Buthusiem says buyers shouldn't be worried about anti-trust concerns.

    Lately, mergers and acquistions in the pharmacy and prescription benefit management segment have gotten a pass from regulators, as lawyers for the deals can successfully argue that consolidation in the sector is helping lower the cost of healthcare.

    Buthusiem pointed toward other pharmacy storefront operators, like Walgreen, and healthcare conglomerates, like UnitedHealth Group, as potential buyers. 

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    obamacareOn the whole, the Affordable Care Act is working pretty well, getting more people insured and increasing the quality of insurance overall. But on Thursday, the Wall Street Journal reported an alarming development: Health insurers on many state exchanges are looking to boost their premiums a ridiculous amount in 2016.

    New Mexico's leading provider, for instance, is seeking a 51.6 percent hike, while Maryland's is seeking a 30.4 percent hike. (Insurers in other states, like Vermont and Indiana, are asking for minimal increases.)

    Libertarianandconservativeoutlets are, predictably, citing the rate hike as yet another Obamacare catastrophe. But it's actually a fairly foreseeable—and possibly temporary—problem. The ACA forced a bunch of uninsured people to get insurance. A hefty amount of these newly insured people were sick when they joined their new plan. Suddenly able to afford treatment, these sick people drained insurers' funds. But as they regain their health and remain on their plan, they'll stop draining their insurers' resources and start boosting them instead.

    There's another huge footnote to the initially eye-popping premium boosts. These are all proposed hikes: In many states, insurance regulators can force insurers to justify their rate increases, and some can reject any increase they find to be unjustified. The federal government, too, can require insurers to explain any premium increase beyond 10 percent—though it lacks the power to reject a rate hike. Thus, some insurers may have initially overestimated their premium increases so they can comfortably negotiate downward.

    All of these estimates, by the way, rely on the assumption that the Supreme Court won't gut Obamacare in June by revoking federal subsidies for people in states that didn't set up their own exchanges. Should the court go down that rabbit hole, the havoc wrought on the American health care system would be catastrophic and, most likely, irreversible.Obamacare graphic

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