Does Obamacare's Victory Hurt Addicts?

By Randolph Brickey 06/28/12

The recovery community is jubilant that the Supreme Court upheld Obamacare. But closer analysis uncovers potentially disturbing implications for the law's celebrated benefits in addiction care.

Outside the Court, the law's fans celebrate. photo via

The Supreme Court has upheld the Patient Protection and Affordable Care Act (aka “Obamacare”), the greatest expansion of medical coverage since the passage of the new Social Security Act in 1965. The new law, and this ruling, have understandably been greeted with jubilation by the recovery community—from top-flight, top-dollar rehabs like Hazelden to inner-city community care clinics. “This is a triumph for recovering Americans, many of whom were directly involved in advocating for the new law,” said Stanford University psychology professor Keith Humphreys, a leading expert on addiction who was also a senior adviser at the White House Office of National Drug Control Policy in 2009 and 2010. "Both the quantity and the quality of care for addiction are set for unprecedented—and long-overdue—growth."

Unfortunately, the decision does more than simply uphold the ACA. In its seemingly impenetrable details, the ruling is dense with political maneuvering and questionable legal arguments that could come to endanger the medical coverage of millions of recovering Americans. For that reason, it pays to make the effort to get up to speed with these details—because that is, of course, where the devil is.

At first, the ruling seems to center on the Commerce Clause, which grants Congress the authority to “regulate Commerce…among the several States.” Congress relied on the Commerce Clause to enact the law’s “individual mandate,” which became a lightning rod of controversy in the political rhetoric that engulfed the legislation.

Roberts makes a perplexing argument that could compromise healthcare under Medicaid—with very serious repercussions for hundreds of thousands of addicts.

The mandate is a creature of necessity. Legislators wrote it into the law because, under the Affordable Care Act, insurers can no longer price coverage based on actual risk—that is, they have to insure sick people without charging them back-breaking rates. But given the unique nature of the healthcare coverage market, this reform encourages healthy people to remain uninsured until after they get sick. Hence the “mandate,” because it makes coverage affordable by spreading the risk more equitably. Everyone has to get insurance while they are healthy—otherwise, the private insurance industry supported by the new law will break down because the cost and supply of healthcare in the US are inflated like nowhere else in the world.

Yesterday, the Supreme Court upheld the individual mandate. But in writing the majority opinion, Chief Justice Roberts held that the Commerce Clause does not allow for the mandate. Instead, he delivered an extensive argument that the mandate is justifiable on entirely separate grounds: as a tax. 

The legal community was taken by complete surprise by Roberts’ mandate-as-tax case. Across the political spectrum, analysts agree that the argument is weak and tangential. In defending the law in arguments before the Court, the Obama administration employed it only as a secondary, “even-if” argument, in the event that the case for the Commerce Clause failed.

Lawyers and pundits will argue over this aspect of the ruling for months to come. Fortunately for people who are in need of healthcare in the real world, however, Roberts’ opinion leaves untouched the numerous changes to health insurance contract law ushered in by the health law. In particular, two of the most unethical former industry practices—by which insurers sought to maximize profits and minimize costs by denying not only treatment but coverage itself—remain barred.

One is rescission, the process by which insurers annulled medical insurance contracts with people after they became sick. That is, the insurer paid you back your premiums and walked out the door. You, on the other hand, now suffered a chronic, uninsured illness—a pre-existing condition that would have typically made all but the most expensive policies unavailable. The other is the process of insurers pricing policies using underwriting based on medical history and how healthy people are. That is, if you suffered a chronic illness—say you had been in treatment for both alcoholism and depression—most health insurance would be pegged at unaffordable prices. These life-destroying “quirks” are now illegal, and that is wonderful news. In addition, the health exchanges will for the first time require that plans provide addiction and mental health treatment benefits comparable to other medical conditions.

Of greater immediate concern, however, is the all-too-easily overlooked second half of the majority opinion. Here, Chief Justice Roberts addresses federal authority over Medicaid payment and policy. Roberts makes a very perplexing argument that could potentially compromise healthcare under Medicaid—with very serious repercussions for hundreds of thousands of addicts.

Medicaid works like highway funding. The federal government has all the money, and it gives the states block grants. The feds attach certain requirements to those grants, thereby controlling the relevant policy.

This is how the federal government determines who is entitled to receive Medicaid. The Affordable Care Act rewrites the Medicaid program by expanding Medicaid drastically—a key strategy to get many of the 30 million uninsured Americans covered—and enforces this expansion on the state by controlling the purse strings.

At the moment, Medicaid is a dysfunctional patchwork. Only some poor people have access to Medicaid, and the criteria for access vary tremendously from state to state and year to year. In fact, Medicaid is enormously limited—and the economic recession over the last five years has only aggravated the problem as more and more people fall into poverty. The vast majority of poor people simply do not qualify for Medicaid because they are just not poor enough.

During budget crises, states will often constrict Medicaid qualifications to prevent new people from getting on the system. For the past several years, despite the rising need among the unemployed, it has been enormously difficult to get on Medicaid unless you are blind, pregnant, medically disabled or have children. In fact, it is nearly impossible for people without children to get Medicaid.

The health law expands Medicaid coverage to everyone under 65 (that is, people not receiving Medicare) making less than 133% of the poverty line—approximately $15,000 to $19,000 a year for an individual, depending on where you live. But the Affordable Care Act not only calls for an enormous increase in coverage. It also extends the actual medical care available through the program. By introducing robust mental health and addiction treatment to Medicaid, the act drastically enhances the healthcare Medicaid provides—particularly for mental health and substance-abuse disorders. Indeed, the new Medicaid provides coverage for screening and early intervention for substance abuse and mental health, an immensely valuable asset that allows for effective medical intervention before addiction can take its full, awful toll on individuals and families. And as Keith Humphreys said, “Addiction will be better integrated into mainstream healthcare financing and service provision, which will lower stigma, attract more treatment professionals to the field and improve the quality of services.”

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