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.”

In fact, Medicaid is the primary vehicle by which the law attempts to create universal coverage—the main, but by no means the only goal, of the legislative reform and one that, if achieved, would bring the US up to the standard of most other advanced industrial nations. Because health insurance can be so expensive, the Medicaid expansion seeks to close the “gap” between the poor and the middle-class. The vast majority of newly-insured people over the next several years will probably find health insurance through Medicaid. It will also be the primary means by which people will access treatment for substance abuse and psychological illnesses, two forms of care that, before the law, were difficult to come by even in expensive private health insurance plans.

Yet in his majority opinion, Roberts jeopardizes this critical Medicaid expansion on arcane and legally suspect grounds. (Here the devil truly is in the details.) He argues that the law expands Medicaid so radically as to be a “shift in kind, not merely degree.” Roberts reasons that such a supposedly categorical transformation of the program by Congress effectively “surpris[es]” the states with new, retroactive conditions.

Roberts seems not to have considered that the states have any right to not be surprised, or how the states could be surprised by the content of a law that was heavily debated for months prior to passage. Roberts refers to no cases and no constitutional basis for his claim of the unconstitutionality of surprise. Instead, Roberts merely implies that this surprise is somehow unlawful or invalid. The Chief Justice provides no precedent to buttress this strange conclusion.

Roberts controlled the terms by which the individual mandate would be upheld and wielded that power by crafting an opinion full of strident political content and precious little precedential value. 

Indeed, it seems likely the states were equally surprised when Congress passed the Civil Rights Act. Suddenly, businesses were barred from denying service on the basis of racial discrimination, which had until 1968 been a matter of state law, for better or worse. It seems likely that the states were surprised when Congress passed the Social Security Act and created Medicaid in the first place. But Roberts shows no interest in any history of state “surprise.” He is solely focused on this one instance of surprise he has invented to serve his argument.

Thankfully, Roberts reaches a compromise with himself. He establishes two concurrent Medicaid programs—the status quo—as inadequate and inconsistent as it is—and the expanded Medicaid provided by the Affordable Care Act. These two Medicaids will (legally at least) exist concurrently.

States will be free to elect either to remain in the current Medicaid program or to join the new, more expansive system. By allowing each state free entry to and exit from the new Medicaid, Roberts resolves in 10 paragraphs the constitutional crisis he engineered in 21.

No pundit or legal scholar saw this coming. It is a bizarre passage, based not on argument from precedent, but on allusion to it. He ties precedent to his narrative, which provides his argument with the appearance of proper legal respectability—but he propounds no actual law and he never establishes why or how this result is legally viable, let alone constitutionally necessary.

As a result, it is almost impossible to see this section of his opinion as anything other than a political gambit: this argument is simply not a creature of law. The Supreme Court stands to create certainty and consensus. Roberts’ opinion does the exact opposite by throwing Medicaid on the mercy of local politics.

Unfortunately, this passage is representative of Roberts’ opinion as a whole. Judging by the outcome, the strange reasoning and the presence of Justice Anthony Kennedy, who is generally the swing vote among the conservative dissenters, it seems likely that Roberts offered the four centrist-liberal Justices (Kagan, Sotomayor, Breyer and Ginsburg) their only opportunity to uphold the mandate and maintain the Medicaid expansion.

Roberts controlled the terms by which the individual mandate—and hence the law itself—would be upheld. And the Chief Justice wielded that power to its fullest by crafting an opinion full of strident political content and precious little precedential value. Future litigators and legislators will be hard-pressed to use anything in this opinion to predict the outcome of future cases. The only real products of Roberts’ 59-page opinion are political.

Meantime, the mainstream media is hailing Roberts as a statesman, who rose above partisan politics to preserve the integrity and reputation of the Supreme Court—and his own legacy.

So from here on out, the individual mandate, the centerpiece of the act, is a “tax.” Politicians will run on this until Election Day. Certainly, Republicans will enjoy being able to cast “Obamacare” passed by the Democratic majority as a “tax” on the middle class. That talking point cost the Court enormous credibility.

For most Americans, though, Roberts’ quasi-legal contortions will likely prove irrelevant because the new Medicaid is very attractive at the state level. Under the law, the state pays a considerably lower percentage of total costs while poor state residents enjoy considerably greater and more comprehensive healthcare. It will be very difficult, especially as the many advantages of the law become increasingly apparent to Americans and the toxic “death panel” rhetoric fades out, for a governor or a state legislature to make the political case necessary to leave that money on the table and deny their own constituents access to healthcare.

About Republican Party calls for repeal, Keith Humphreys is relatively sanguine. “I am not worried about repeal,” he said. “Social security passed the senate by a single vote and was very controversial at the time. Today, a senator who voted to eliminate social security would be drawn and quartered. Our history shows that once Americans receive a benefit due to public policy, they become defenders of that policy. As the Affordable Care Act is phased in, more and more people are going to have their lives saved by the law and that will make repeal very hard politically."

This situation is reminiscent of Republican legislators and governors decrying economic stimulus and promising to reject the federal funds offered. Ultimately, of course, this rejection was nothing more than political showmanship. It is a hard sell for a governor to turn down outside money for repairing roads. It is an even harder sell to turn down healthcare.

This two-track Medicaid policy will still inflict anxiety on many people. We must all now worry whether our governor will run for national office and decide to use our healthcare—which is not only a basic necessity but treated as an essential right in many nations—as a political football. It would not be the first time a state politician turned on former constituents to pursue national headlines.

Further, many states face such disastrous budgetary realities that even paying a higher percentage for a lesser quality of care may seem more viable politically than a tax increase or some other means of raising revenue. California has been famously incapable of raising new tax revenues for decades. Because the federal contributions to the new Medicaid pare down to 90% over time, there may come a point when state budgets grow so untenable that a state could prefer to save 10% on its Medicaid expenses over some other means of closing a budget gap.

In the short term, however, the Affordable Care Act stands—and stands to benefit both those who need and those who provide prevention, early intervention, ongoing treatment and general medical care for psychological and substance disorders. Unfortunately, there is also cause for uncertainty and vigilance. The provision of health care remains shackled to partisan politics. And, regrettably, so does the Supreme Court.

Randolph Brickey is an attorney who lives and practices in Northern Virginia. He can be reached at [email protected]. This is his first article for The Fix.

Please read our comment policy. - The Fix