What Would Happen if Obama's Healthcare Law Were Repealed

As the country's highest court listens to arguments, the fight over health care reform may only be getting started.

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If the Supreme Court strikes down the individual mandate in President Obama's health care law, it could be the loose thread that unravels the whole ball of string.

[See pictures of President Obama's re-election campaign.]

Since the mandate is meant to expand the pool of people covered by health insurance, it makes other parts of the law possible, such as subsidies for those who can't afford insurance and a ban on denying coverage because of pre-existing conditions. Without the mandate, those provisions might be unsustainable and the whole law could effectively become moot.

If that happens, Republicans would gladly declare victory. But we'd revert to a healthcare system that was deeply flawed to start with, and is now arguably in worse shape than when the Patient Protection and Affordable Care Act became law in 2010.

Republicans have railed against the individual mandate on the grounds that it infringes upon Americans' freedom and forces people to do something—pay for health insurance—that should be a matter of individual choice, not a government requirement. The Supreme Court deliberations will focus narrowly on whether Congress has the constitutional authority to require such a thing. But lost in the lofty rhetoric will be the scale of the original problem, which finally affected so many Americans that Obama was able to overcome decades of opposition and pass the most sweeping changes in the healthcare system since Medicare and Medicaid were created in 1965.

So as a reminder, here are a few of the basic problems with the U.S. healthcare system that Obamacare was meant to address:

One-sixth of the population lacks health insurance. In 2008, 45 million Americans had no healthcare coverage. Two years later (the most recent data available), that number had risen to 50 million, largely because insurance is typically tied to employment and joblessness soared during the recent recession.

[Read The Real Reason Obamacare Scares People.]

Without insurance, healthcare costs can be ruinous. One study by Harvard researchers found that 62 percent of all personal bankruptcy filings were related to medical costs that overwhelm a family's budget. The numbers are probably worse now, since that study was done in 2007, before the recession put an additional 8 million Americans out of work.

People die because they lack insurance. A 2009 study found that a lack of insurance causes or contributes to the deaths of 45,000 Americans each year. Some people die because they put off getting treatment for conditions that worsen to the point of being fatal. People without insurance also tend to get lower quality care than those with coverage.

The high cost of health care distorts the labor market. We all know people who stay at a job they'd otherwise leave because they're afraid to give up healthcare benefits. That prevents some people from taking entrepreneurial risks or moving to jobs that might enhance their careers. Bearing the cost of employee healthcare also puts some U.S. companies at a disadvantage against competitors in Europe and Japan, where the government provides most coverage. Many U.S. companies offset the rising cost of healthcare benefits by limiting pay.

[Read How to Reclaim the American Dream.]

American healthcare is a bad bargain. Americans spend nearly twice as much per capita on healthcare as developed countries do on average, yet the United States ranks below average on many key quality indicators, including life expectancy and infant mortality.

Most trends are going in the wrong direction. The cost of healthcare is rising far faster than incomes, fewer families can afford coverage, and skyrocketing healthcare costs are the biggest threat to the federal government's solvency.

The Affordable Care Act, which mostly goes into effect in 2014, has flaws and probably wouldn't solve all these problems under any circumstances. It would extend coverage to perhaps 30 million additional Americans, for instance, but still leave some people uncovered. The ACA doesn't directly address the cost problem either, and it could take decades for the overall efficiency of the U.S. healthcare system to improve.

But it does address some important problems, and most Republicans who call for the repeal of the ACA aren't proposing a better alternative. For the most part, they simply seem to be advocating a return to the status quo ante, as if we had an effective health care system before Obama came along and ruined everything.

Republican presidential frontrunner Mitt Romney at least has some experience with health reform, since Massachusetts passed a statewide program similar to the ACA in 2006, when Romney was governor. Romney's argument now is that health reform should happen at the state level, not the federal level. But only a few states tried some sort of health reform before the ACA was passed, and the 26 Republican-led states that are backing the Supreme Court challenge seem to want to obstruct to the whole idea. So at best, a few states might find a way to improve their healthcare systems in the absence of health care reform, with a patchwork of rules and standards that vary by state.

Other Republican plans for lowering health care costs and expanding coverage amount to a smattering of warmed-over proposals, such as caps on medical liability and health-savings accounts that, theoretically, would lower costs by creating a better free-market dynamic in the market for healthcare. These ideas may have merit, but they've been around for years and never earned enough support to pass Congress.

Besides, pushing any Republican-backed health reform plan through Congress in the future would be at least as contentious as the Obama plan was when it barely passed in 2010. If the Supreme Court strikes down Obama's law, the fight over health care may just be getting started.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success, to be published in May. Follow him on Twitter: @rickjnewman