Over the past few months, we have heard questions about health insurance from several of our clients. In particular, these clients have wondered what it might mean to their financial plans if the Affordable Care Act (e.g. Obamacare) were ruled unconstitutional by the Supreme Court. This question has arisen because the Supreme Court does currently have a case (California v. Texas) before it on this matter, the constitutionality of the individual mandate in the Affordable Care Act.
Kahler Financial Group has been able to offer no good answers to the question, only more questions to consider. There was no certainty about how the Court might rule, nor what kind of impact having the entire law ruled unconstitutional might have. The concern, however, from a financial planning perspective is that without the Affordable Care Act as law, preexisting conditions could return to the health insurance market. And this, in turn, might make access to good health insurance unaffordable or entirely unavailable for some. In particular, we were concerned for clients planning to retire (or already retired) before they become eligible for Medicare and for self-employed clients who do not have access to group health insurance. Both these groups rely heavily on the individual health insurance market to cover their health care risks. The return of pre-existing conditions could make retirement and self-employment far more expensive and risky to these two groups.
On Tuesday, November 10th, the Supreme Court heard oral arguments in this case. Per a recent blog post by the SCOTUSblog, a well-respected and unbiased Supreme Court information outlet , these early oral arguments seem to suggest an increased likelihood that the Affordable Care Act will remain the law of the land. This would mean individuals will remain protected from health insurers returning to using preexisting conditions in health insurance underwriting.
The Court is expected to issue their final ruling on the matter sometime in 2021. As the SCOTUSblog piece notes, “it’s always risky to make predictions about the outcome of a case based on oral argument.” However, for the moment, it appears the Affordable Care Act and protections against preexisting conditions are likely to remain law, potentially making some retirement decisions easier than otherwise.
SCOTUSblog article: Argument analysis: ACA seems likely to survive, but on what ground?