Obamacare Court Ruling a Victory for Affordability and Choice

After more than 13 years on the books, the Affordable Care Act (ACA; aka “Obamacare”) may soon be due for a dramatic change. Recently, U.S. District Judge Reed O’Connor ruled that the “preventive services” mandate—requiring most insurers to cover a growing list of screenings and procedures for free—is unlawful. In this case, Obamacare’s structure and reliance on independent decision-making bodies led to its (partial) downfall. Members of the committees tasked with deciding which services should be considered “preventive” are “officers of the United States” with significant clout, yet have not gone through Presidential nomination nor Senate approval. According to the Judge, that set-up is simply unconstitutional.

At the very least, the ruling should remind policymakers that checks and balances are critical to a well-functioning government. It should also prompt lawmakers and the Biden administration to seriously consider the consequences of providing “free” care for an increasing umbrella of services. Mandates and government-managed care are no substitute for innovation and patient choice.

Obamacare’s architects may have wanted to streamline the healthcare system, but the law accomplished the opposite. Under the status-quo, the ACA requires insurers to cover certain “preventive” services (e.g., tobacco use screening, obesity counseling, alcohol misuse counseling) free-of-charge to patients. Rather than listing out all these services, the law relies on expert bodies such as the U.S. Preventive Services Task Force to recommend preventive services for inclusion into the ACA’s ever-expanding mandate. Even if patients have no reason to discuss tobacco and alcohol with their doctors, a complicated arrangement between officials, Task Force members, and insurers forces patients to pay for substance screening and counseling anyway.

The mandate’s consequences are even costlier for cancer screenings. Over the past decade, low-cost services such as blood-in-stool tests have allowed patients to avoid going for a (shudder) colonoscopy. Doctors are still more likely to recommend colonoscopies to patients despite the procedure’s significant costs. But because the mandate shields patients from seeing that cost, they’ll likely listen to their doctors and opt for the costlier screening. Research on colorectal cancer screening shows that, while the ACA significantly increased overall screening, colonoscopies are driving the vast majority (~85 percent) of the increase.

Simply getting more people to show up for screenings is only one part of the equation. As Presidents Obama and Biden recognized, a key part of healthcare reform is to bend down the cost curve. Even in a clinical setting, colonoscopies cost roughly three times as much as blood-in-stool tests. Moreover, thanks to advances in medical technology, patients can order and take colon cancer tests at home for less than $100. Low-cost and innovative healthcare can become the norm, but only if patients have some exposure to prices.

This new “skin in the game” will only become a reality once the preventive services mandate goes away for good. That does not mean patients need to file for bankruptcy to afford essential healthcare services. Taking Medicaid dollars (which have limited effectiveness) and converting them into Health Savings Account (HSA) payments for struggling households can go a long way toward providing financial security. The federal government can make the most of these payments by ensuring that low-income beneficiaries have sufficient HSA funds to cover high expenses that fall just short of meeting the deductible (the point where insurers start paying).

Judge O’Connor’s ruling is a large leap in the right direction. But, ultimately, policymakers will have to work together to ensure a robust, market-based alternative to the broken status-quo. Choice and affordability are exactly what the doctor ordered.

David Williams is the president of the Taxpayers Protection Alliance.