The Affordable Care Act has transformed American healthcare, and the legislation has always been contentious. Throughout its short history, Obamacare has generated plenty of debate, and despite its having been the law of the land for years, new provisions continue to take effect and create new rounds of controversy. Let's take a look at three of the most important things that happened with Obamacare in 2015.
Supreme Court upholds subsidies for all
In June, the Supreme Court issued its decision on King v. Burwell, which challenged the law's ability to offer premium subsidies to residents of states that had chosen to use the federal health insurance exchange rather than instituting their own state-run exchanges. Those who were seeking to have the subsidies struck down argued that the language of the law meant that only participants in state-established exchanges could receive subsidies.
By a 6-3 decision with the majority opinion written by Chief Justice John Roberts, the Supreme Court found that subsidies were available to all, regardless of whether they participate through a state-run exchange or through the federal healthcare exchange. Without that favorable ruling, Obamacare likely would have devolved into chaos, with more than 6 million Americans suddenly finding themselves ineligible to receive the subsidized insurance coverage they had expected to receive. With the Court having now upheld Obamacare on multiple occasions, dissenting Justice Antonin Scalia argued that the law should be renamed SCOTUS-care.
UnitedHealth threatens to back out of Obamacare exchanges
One concern about Obamacare has been that even if it worked initially, it might become less economically feasible over time. Insurance giant UnitedHealth (NYSE:UNH) heightened those concerns in November, when it said that it would consider no longer offering health insurance coverage through Obamacare exchanges beginning in 2017. The health insurer said that Obamacare was costing the company money, forcing it to reduce its full-year profit guidance and pointing to the failure of the program to get enough relatively healthy participants to offset the added costs of those who have more costly healthcare needs.
UnitedHealth currently has its hand in roughly two dozen exchanges, and while its absence wouldn't necessarily represent the end of Obamacare, it would nevertheless be a sign that other insurers might face similar pressure in the future. Other insurers haven't yet jumped on the UnitedHealth bandwagon, but if they suffer similar financial hardship due to the program, then UnitedHealth might be the leader in what becomes a stampede away from participation in the health insurance exchanges.
Cadillac tax delayed until 2020
Meanwhile, employers got a break from one of the least popular provisions of Obamacare less than a month ago, as a result of the recent year-end tax legislation. The dreaded Cadillac tax was slated to take effect beginning in 2018, penalizing employers who offered their employees insurance coverage that was too generous by hitting them with a 40% excise tax on insurance costs above a certain maximum amount. The provision faced bipartisan opposition, as some objected to the penalty on general principles while others saw it as unfairly hitting employers who had treated their employees extremely well in providing benefits.
The compromise didn't kill the Cadillac tax entirely, but it did put off its implementation until 2020. That will give opponents of the provision another two years in which to try to make its repeal permanent.
Obamacare is a controversial piece of legislation, and with the Presidential election coming later this year, it's sure to be at the forefront of political debate throughout 2016. You can expect plenty more headlines covering Obamacare in the year to come.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.