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If the Supreme Court Ends Obamacare, Here’s What It Would Mean

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What would happen if the Supreme Court struck down the Affordable Care Act?

The fate of the sprawling, decade-old health law known as Obamacare was already in question, with the high court expected to hear arguments a week after the presidential election in the latest case seeking to overturn it. But now, the death of Justice Ruth Bader Ginsburg increases the possibility that the court could abolish it, even as millions of people are losing job-based health coverage during the coronavirus pandemic.

A federal judge in Texas invalidated the entire law in 2018. The Trump administration, which had initially supported eliminating only some parts of the law, then changed its position and agreed with the judge’s ruling. Earlier this year the Supreme Court agreed to take the case.

Mr. Trump has vowed to replace Justice Ginsburg, a stalwart defender of the law, before the election. If he is successful in placing a sixth conservative on the court, its new composition could provide the necessary five votes to uphold the Texas decision.

Many millions more people would be affected by such a ruling than those who rely on the law for health insurance. Its many provisions touch the lives of most Americans, from nursing mothers to people who eat at chain restaurants.

Here are some potential consequences, based on estimates by various groups.

As many as 133 million Americans — roughly half the population under the age of 65 have pre-existing medical conditions that could disqualify them from buying a health insurance policy or cause them to pay significantly higher premiums if the health law were overturned, according to a government analysis done in 2017. An existing medical condition includes such common ailments as high blood pressure or asthma, any of which could require those buying insurance on their own to pay much more for a policy, if they could get one at all.

The coronavirus, which has infected nearly seven million Americans to date and may have long-term health implications for many of those who become ill, could also become one of the many medical histories that would make it challenging for someone to find insurance.

Under the A.C.A., no one can be denied coverage under any circumstance, and insurance companies cannot retroactively cancel a policy unless they find evidence of fraud. The Kaiser Family Foundation estimated that 54 million people have conditions serious enough that insurers would outright deny them coverage if the A.C.A. were not in effect, according to an analysis it did in 2019. Its estimates are based on the guidelines insurers had in place about whom to cover before the law was enacted.

Most Americans would still be able to get coverage under a plan provided by an employer or under a federal program, as they did before the law was passed, but protections for pre-existing conditions are particularly important during an economic downturn or to those who want to start their own businesses or retire early. Before the A.C.A., employers would sometimes refuse to cover certain conditions. If the law went away, companies would have to decide if they would drop any of the conditions they are now required to cover.

The need to protect people with existing medical conditions from discrimination by insurers was a central theme in the 2018 midterm elections, and Democrats attributed much of their success in reclaiming control of the House of Representatives to voters’ desire to safeguard those protections. Mr. Trump and many Republicans promise to keep this provision of the law, but have not said how they would do that. Before the law, some individuals were sent to high-risk pools operated by states, but even that coverage was often inadequate.

Of the 23 million people who either buy health insurance through the marketplaces set up by the law (roughly 11 million) or receive coverage through the expansion of Medicaid (12 million), about 21 million are at serious risk of becoming uninsured if Obamacare is struck down. That includes more than nine million who receive federal subsidies.

On average, the subsidies cover $492 of a $576 monthly premium this year, according to a report from the Department of Health and Human Services. If the marketplaces and subsidies go away, a comprehensive health plan would become unaffordable for most of those people and many of them would become uninsured.

States could not possibly replace the full amount of federal subsidies with state funds.

Medicaid, the government insurance program for the poor that is jointly funded by the federal government and the states, has been the workhorse of Obamacare. If the health law were struck down, more than 12 million low-income adults who have gained Medicaid coverage through the law’s expansion of the program could lose it.

In all, according to the Urban Institute, enrollment in the program would drop by more than 15 million, including roughly three million children who got Medicaid or the Children’s Health Insurance Program when their parents signed up for coverage.

The law ensures that states will never have to pay more than 10 percent of costs for their expanded Medicaid population; few if any states would be able to pick up the remaining 90 percent to keep their programs going. Over all, the federal government’s tab was $66 billion last year, according to the Congressional Budget Office.

Losing free health insurance would, of course, also mean worse access to care and, quite possibly, worse health for the millions who would be affected. Among other things, studies have found that Medicaid expansion has led to better access to preventive screenings, medications and mental health services.

ImageDemonstrating against repeal of the Affordable Care Act in Fort Lauderdale, Fla., in July 2017.
Credit…Joe Raedle/Getty Images

The health law took effect just as the opioid epidemic was spreading to all corners of the country, and health officials in many states say that one of its biggest benefits has been providing access to addiction treatment. It requires insurance companies to cover substance abuse treatment, and they could stop if the law were struck down.

The biggest group able to get access to addiction treatment under the law is adults who have gained Medicaid coverage. The Kaiser Family Foundation estimated that 40 percent of people from 18 to 65 with opioid addiction — roughly 800,000 — are on Medicaid, many or most of whom became eligible for it through the health law. Kaiser also found that in 2016, Americans with Medicaid coverage were twice as likely as those with no insurance to receive any treatment for addiction.

States with expanded Medicaid are spending much more on medications that treat opioid addiction than they used to. From 2013 through 2017, Medicaid spending on prescriptions for two medications that treat opioid addiction more than doubled: It reached $887 million, up from nearly $358 million in 2013, according to the Urban Institute.

The growing insured population in many states has also drawn more treatment providers, including methadone clinics, inpatient programs and primary care doctors who prescribe two other anti-craving medications, buprenorphine and naltrexone. These significant expansions of addiction care could shrink if the law were struck down, leaving a handful of federal grant programs as the main sources of funds.

The law protects many Americans from caps that insurers and employers once used to limit how much they had to pay out in coverage each year or over a lifetime. Among them are those who get coverage through an employer — more than 150 million before the pandemic caused widespread job loss — as well as roughly 15 million enrolled in Obamacare and other plans in the individual insurance market.

Before the A.C.A., people with conditions like cancer or hemophilia that were very expensive to treat often faced enormous out-of-pocket costs once their medical bills reached these caps.

While not all health coverage was capped, most companies had some sort of limit in place in 2009. A 2017 Brookings analysis estimated that 109 million people would face lifetime limits on their coverage without the health law, with some companies saying they would cover no more than $1 million in medical bills per employee. The vast majority of people never hit those limits, but some who did were forced into bankruptcy or went without treatment.

About 60 million people are covered under Medicare, the federal health insurance program for people 65 and older and people of all ages with disabilities. Even though the main aim of the A.C.A. was to overhaul the health insurance markets, the law “touches virtually every part of Medicare,” said Tricia Neuman, a senior vice president for the Kaiser Family Foundation, which did an analysis of the law’s repeal. Overturning the law would be “very disruptive,” she said.

If the A.C.A. is struck down, Medicare beneficiaries would have to pay more for preventive care, like a wellness visit or diabetes check, which are now free. They would also have to pay more toward their prescription drugs. About five million people faced the so-called Medicare doughnut hole, or coverage gap, in 2016, which the A.C.A. sought to eliminate. If the law were overturned, that coverage gap would widen again.

The law also made other changes, like cutting the amount the federal government paid hospitals and other providers as well as private Medicare Advantage plans. Undoing the cuts could increase the program’s overall costs by hundreds of millions of dollars, according to Ms. Neuman. Premiums under the program could go up as a result.

The A.C.A. was also responsible for promoting experiments into new ways of paying hospitals and doctors, creating vehicles like accountable care organizations to help hospitals, doctors and others to better coordinate patients’ care.

If the groups save Medicare money on the care they provide, they get to keep some of those savings. About 11 million people are now enrolled in these Medicare groups, and it is unclear what would happen to these experiments if the law were deemed unconstitutional. Some of Mr. Trump’s initiatives, like the efforts to lower drug prices, would also be hindered without the federal authority established under the A.C.A.

Repealing the law would also eliminate a 0.9 percent increase in the payroll tax for high earners, which would mean less money coming into the Medicare trust fund. The fund is already heading toward insolvency — partly because other taxes created by the law that had provided revenue for the fund have already been repealed — by 2024.

Credit…Andrew Burton/Getty Images

The A.C.A. required employers to cover their employees’ children under the age of 26, and it is one of the law’s most popular provisions. Roughly two million young adults are covered under a parent’s insurance plan, according to a 2016 government estimate. If the law were struck down, employers would have to decide if they would continue to offer the coverage. Dorian Smith, a partner at Mercer, a benefits consulting firm, predicted that many companies would most likely continue.

Doctors and hospitals could lose a crucial source of revenue, as more people lose insurance during an economic downturn. The Urban Institute estimated that nationwide, without the A.C.A., the cost of care for people who cannot pay for it could increase as much as $50.2 billion.

Hospitals and other medical providers, many of whom are already struggling financially because of the pandemic, would incur losses, as many now have higher revenues and reduced costs for uncompensated care in states that expanded Medicaid. A study in 2017 by the Commonwealth Fund found that for every dollar of uncompensated care costs those states had in 2013, the health law had erased 40 cents by 2015, or a total of $6.2 billion.

The health insurance industry would be upended by the elimination of A.C.A. requirements. Insurers in many markets could again deny coverage or charge higher premiums to people with pre-existing medical conditions, and they could charge women higher rates. States could still regulate insurance, but consumers would see more variation from state to state. Insurers would also probably see lower revenues and fewer members in the plans they operate in the individual market and for state Medicaid programs at a time when millions of people are losing their job-based coverage.

The A.C.A. requires nutrition labeling and calorie counts on menu items at chain restaurants.

It requires many employers to provide “reasonable break time” and a private space for nursing mothers to pump breast milk.

It created a pathway for federal approval of biosimilars, which are near-copies of biologic drugs, made from living cells.

These and other measures would have no legal mandate to continue if the A.C.A. is eliminated.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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