The federal court decision striking down the Affordable Care Act (ACA) won’t have an immediate impact on the law’s implementation, but there could be serious consequences if it is upheld, experts said Monday.
The decision issued Friday by Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas came in a lawsuit filed in February by the state of Texas along with 19 other states, all led at the time by Republican governors. It argues that because the tax reform bill passed by Congress — which O’Connor refers to as the Tax Cuts and Jobs Act (TCJA) of 2017, although the name was later changed — gets rid of the ACA “individual mandate” penalty for not having health insurance, the requirement for individuals to have health insurance is void. Because of that, the rest of the law — which they say hinges on the mandate — should be invalidated.
O’Connor agreed with the plaintiffs. “In NFIB [another court case involving the ACA], the Supreme Court held the individual mandate unconstitutional under the Interstate Commerce Clause but could fairly be read as an exercise of Congress’s tax power because it triggered a tax,” O’Connor wrote. “The TCJA eliminated that tax. The Supreme Court’s reasoning in NFIB… thus compels the conclusion that the individual mandate may no longer be upheld under the tax power.”
“Finally, Congress stated many times unequivocally… that the individual mandate is ‘essential’ to the ACA,” he continued. And this essentially, the ACA’s text makes clear, means the mandate must work ‘together with the other provisions’ for the Act to function as intended… Because rewriting the ACA without its ‘essential’ feature is beyond the power of [this] court, the Court thus adheres to Congress’s textually expressed intent and binding Supreme Court precedent to find the individual mandate is inseverable from the ACA’s remaining provisions.”
Reasoning is Invalid, Critics Say
This decision is incorrect legally in several ways, Tim Jost, emeritus professor of law at Washington & Lee University, in Lexington, Virginia, said in a phone interview. “He’s wrong on every part of the case, but particularly, the severability part is outrageous,” he said. Although O’Connor said that the ACA was invalid because the tax was taken away, “the tax was not [actually] repealed — it was just reduced to zero for the moment. I asked the [lead attorney from] Texas whether, if the tax was reinstated, the ACA would be constitutional again. The attorney said ‘yes.'”
If the case eventually ends up at the Supreme Court, “I think [Chief Justice John] Roberts would be very, very mad, because he took so much heat on the earlier [ACA] cases,” Jost said. And if Roberts, Kavanaugh, and maybe the court’s three other conservatives stick to what they said about severability in the past, “they will say that even if the mandate is null [and void], the rest of the statute stands on its own.”
Until the court case finishes, however, the ACA remains in effect. “The… decision regarding the Affordable Care Act is not an injunction that halts the enforcement of the law and not a final judgment,” the Department of Health and Human Services (HHS) said in a statement. “Therefore, HHS will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision. This decision does not require that HHS make any changes to any of the ACA programs it administers or its enforcement of any portion of the ACA at this time.”
In addition, the Calif. attorney general — who opposes the decision, along with several other attorney generals — is expected to seek a stay ahead of the decision, Jost noted, adding that the ruling otherwise could affect not just the ACA’s insurance exchanges but also many other areas that the ACA touches, including Medicare, Medicaid, and employer-sponsored health insurance. “Every single American will be affected by this if it stands.”
Changing the Conversation
Although the decision is up for appeal, “it [still] creates the potential to change a lot of conversations that were previously going on,” Rodney Whitlock, vice president for health policy at ML Strategies, a Washington consulting firm, said in a phone interview. Many people on Capitol Hill thought that maybe Title 1 of the law, which sets up the health insurance exchanges, might possibly be struck, “but now it’s about the entire law,” so that gives the Democrats the opportunity to hold hearings that focus on all parts of the ACA and how the Republicans want to gut it. “I don’t know how much value the Democrats take out of torturing Republicans over the entirety of the ACA, but I know it’s not zero,” said Whitlock.
Outside of Capitol Hill, the best bet for insurers and others tied to the marketplaces is to continue on as usual, said Rosemarie Day, a health insurance consultant in Somerville, Mass. “As a practical matter, any reputable entity is continuing forward with the ACA as is,” she said. “There’s nothing legally that has changed.”
If you “look at the midterm election results; you look at healthcare being such a primary issue, and you look at the fact that Congress never ended up repealing the ACA… the reality is that the politics haven’t been there to support such an all-out repeal. That’s why it’s really unlikely that… if it even got to [the Supreme Court] level,” that the court would declare the law unconstitutional, because the court “has to take into account all the things that happened, including how Congress acted,” she stated.
Day said she would advise insurers instead that “what you still need to be paying attention to is what the administration is doing through administrative action,” like permitting short-term limited duration plans to be sold. “Those are the things you’ve got to be watching.”
Bleeding into 2020
Julius Hobson Jr., JD, senior policy advisor at Polsinelli, a consulting firm in Washington, said the decision “isn’t having as much impact now as it would have a month ago, since the deadline for signing up [for the exchanges] was nearly over.” The Trump administration, for its part, has done a lot to discourage signups, including cutting advertising for the exchanges and taking the site offline on Sundays when many people would normally be looking at it, “but that was already done before this court decision came,” said Hobson, whose wife chairs the board of the District of Columbia’s health insurance exchange.
“Where the decision matters is on the political side because we just finished a midterm election in which the Republicans were running scared on healthcare,” he added. “A good number campaigned that they supported [coverage for] preexisting conditions — never mind that the House voted 60 times to repeal all of that.” Now they’ll have to try to come up with a solution, he said.
In addition, “this is going to be making it through the court system as we make our way through the 2020 election… There is not going to be a presidential candidate who is not going to be asked the question,’What are you going to do on healthcare? What’s the specific action?'”