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No ‘Plan B’ for Obamacare

Published on 18/06/15 at 07:52am
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The US is the largest pharmaceutical market in the world

US president Barack Obama has no ‘Plan B’ if a crucial Supreme Court vote in the next fortnight goes against his landmark healthcare reform, according to Bloomberg. 

Tax subsidies under Obama’s Patient Protection and Affordable Care Act – known as ‘Obamacare’ – could be ruled illegal, plunging millions of people’s health arrangements into chaos. 

The subsidies are designed to extend insurance to 6.4 million people in 34 states, and if they are declared illegal this will push up premiums, either forcing people to pay more or ensuring they exit the scheme altogether. 

Obamacare was signed into law in 2010 and became the biggest shake-up to the country’s healthcare system since the introduction of Medicaid and Medicare in the 1960s.

It has been divisive, with supporters applauding an attempt to allow a vulnerable section of society to gain access to affordable health coverage - but opponents in the US have criticised what they see as ‘socialised healthcare’ which extends the reach of big government. 

Before this question over the legality of subsidies, it had been estimated that Obamacare coverage would extend to 32 million people by next year, with pharma paying for much of this via rebates and taxes. 

Forbes reports that pharma will pay $100 billion in the first decade of the new law’s lifetime, an amount which will vary according to a company’s size and market share. 

If the vote goes against Obama, it is not clear how quickly change would come, or what sort of alternative solution would be available.

Experts quoted by Bloomberg suggest a bleak outcome. “Chaos would ensue quite quickly,” said Larry Levitt, a senior vice president at the not-for-profit Kaiser Family Foundation. 

“There’s a significant constituency within the Republican Party which is ‘repeal or nothing,’” said Margaret Foster Riley, law professor at the University of Virginia. “The concern is we’re going to play chicken right up to the brink.” 

The US is the largest pharmaceutical market in the world, spending $2.8 trillion in 2012, of which $263.3 billion was on prescription drugs. 

Adam Hill

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