Renewed Battle Over Obamacare Begins, Justice Department Supports Lower Court Ruling
The Affordable Care Act is back on the chopping block with both Republicans and Democrats equally determined to repeal or save the act, respectively.
Buoyed by the momentum of the Mueller probe’s conclusion, the Trump Administration is renewing its fight against Obamacare. Except this time, Trump has the support of the Justice Department in striking down the entire legislation.
Attorney General Andrew Barr is taking a more aggressive stance against the Affordable Care Act than his predecessor. Former Attorney General Jeff Sessions supported eliminating the requirement for insurance companies to provide coverage to citizens with pre-existing conditions, but not other provisions of the law.
Barr has shifted the Department of Justice’s position on the legislation by filing a determination in the U.S. Court of Appeals for the 5th Circuit in New Orleans on Monday that declared support of a federal judge’s ruling finding the Affordable Care Act unconstitutional.
Democratic leadership quickly responded to the White House’s shifting position, with Speaker of the House Nancy Pelosi saying in a statement, “While the Trump Administration broadens its monstrous ambitions from destroying protections for pre-existing conditions to tearing down every last benefit and protection the Affordable Care Act provides, Democrats are fiercely defending the law of the land and protecting all Americans’ healthcare.”
Democrats made the Trump administration’s stance on pre-existing conditions a focal point in the 2018 midterms, and the continued fight over healthcare could become the central issue of the upcoming presidential election.
Both Republican and Democratic voters cited high pharmaceutical prices as their highest concern in a Harvard-Politico poll taken after the 2018 midterm elections, and legislators on both sides of the aisle have been ramping up their criticisms of the pharmaceutical industry. The Department of Health and Human Services estimates that drug prices will continue to increase by 6.3 percent every year over the next decade, while other related costs grow by 5.5 percent per year.
Why are Drug Prices so High?
On February 26, 2019, seven executives of top pharmaceutical companies faced questioning by the Senate Finance Committee, the largest gathering of pharmaceutical executives before a congressional committee in decades. After senators began to grill the CEOs on drug prices (Senator Ron Wyden compared the way pharmaceutical company AbbVie protects its drug Humira to the way Gollum protects his ring in Lord of the Rings), the executives shifted blame to pharmacy-benefit managers, insurers, and high research and development costs.
The argument that high research costs justify exorbitant drug prices appears to falter under scrutiny. In total, the industry collected around $440 billion from sales in the U.S. alone in 2018, spending only about $70 billion of that on research or one-sixth of the money it rakes in.
Drug prices in Canada, the U.K., Denmark and Ireland are about 41 percent of their U.S. counterparts on average, according to one study. Additionally, several companies make the equivalent of their entire R&D budget with the profits from a single product. Research shows two-thirds of every dollar spent on prescription drugs is kept by manufacturers. Drug manufacturing volume is expanding while new research spending on the drugs already on the market has been small.
According to economist Dean Baker, the US’s pharmaceutical prices are so much higher than comparative drugs in other countries because the government gives patent monopolies to drug manufacturers.
What Happens if we Repeal the Affordable Care Act?
President Trump has said taking action on soaring drug prices and the opioid crisis are his primary goals regarding healthcare, but experts say removing Obamacare without an alternative plan in place would exacerbate both problems.
The Congressional Budget Office estimated in 2017 that eliminating the Affordable Care Act without a replacement would lead to 32 million more uninsured people by 2026.
The Affordable Care Act expands Medicaid coverage to millions of Americans, and rollbacks would worsen the crisis because 1.2 million citizens struggling with addiction and mental health problems are currently covered under the expansion. According to Juliette Cubanski of the Kaiser Family Foundation, uprooting Obamacare would eliminate discounts to seniors on Medicare and drive out-of-pocket drug costs for seniors up to $2,000 a year.
If the case makes it past the Fifth Circuit Court of Appeals, it will go directly to the Supreme Court, where the Affordable Care Act was last defended as constitutional in 2012.
After failing to “repeal and replace” Obamacare in 2017 with the last minute down vote of the late Senator John McCain, the GOP has been unable to provide a popular replacement model to the ACA. But with drug prices continuing to rise, alternatives to America’s current healthcare structure will remain at the heart of the country’s divided political conversation.