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Health Groups Unhappy With Appeals Court Decision in ACA Case

Affordable Care Act (ACA) opponents celebrated their victory in Wednesday’s federal appellate court decision invalidating the ACA’s individual mandate, while supporters of the law warned that if it is repealed in its entirety, the consequences could be dire.

“This is a victory for Texas, a victory for the United States, and a victory for the rule of law,” Texas Solicitor General Kyle Hawkins said Thursday on a phone call with reporters. “We look forward to going back to the district court and demonstrating that the Affordable Care Act is unlawful in its entirety and should be declared invalid.” The individual mandate was the ACA provision requiring people to buy health insurance or pay a financial penalty. Congress eliminated that penalty in 2017 as part of the Tax Cuts and Jobs Act.

Case Remanded to Lower Court

The case in question, Texas v. United States of America — also called Texas v. Azar, as Health and Human Services (HHS) Secretary Alex Azar is charged with implementing the law — was filed in early 2018 by Texas and 19 other Republican-controlled states.

In December 2018, lower-court Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas sided with the plaintiffs that the ACA became unconstitutional after Congress scrapped the individual mandate penalty. Congress had unequivocally stated time and again that the mandate was “essential” and “inseverable” from the rest of the ACA’s provisions, O’Connor explained, but rewriting the law without its “essential” feature was beyond the power of his court. The decision was appealed, and on Wednesday, a federal appeals court agreed that the individual mandate was unconstitutional but told the district judge in the case to look again at whether other parts of the law can still stand.

“The individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power,” wrote Judge Jennifer Walker Elrod for the three-judge panel of the U.S. Court of Appeals for the Fifth Circuit. “On the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.”

Physician Groups Unhappy

The American College of Physicians (ACP) was not happy with the appeals court decision. “The ACP is greatly concerned that the decision of a federal appeals court that the individual mandate of the ACA is unconstitutional could place healthcare for millions at risk, should the courts rule that the coverage requirements and other provisions of the ACA also must be overturned because they can’t be ‘severed’ from the mandate,” ACP president Robert McLean, MD, said in a statement. “What’s at stake is whether the ACA’s pre-existing condition protections, essential benefit requirements, funding for Medicaid expansion, and other provisions will be upheld or overturned, with the health and lives of the millions of patients being at risk depending on what the courts decide.”

And the ACP was not alone. Wednesday’s decision “leaves important health insurance protections shrouded in uncertainty despite overwhelming public support for these policies,” said American Medical Association (AMA) President Patrice Harris, MD, in a statement. “The decision underscores that the district court’s initial ruling striking down the entire ACA was made without appropriate analysis, ignoring the extensive reach of the law and its many provisions that have no relationship to the individual mandate. The AMA will continue our efforts to preserve health insurance coverage and patient protections that the ACA extended to millions of Americans, and will work to ensure the district court understands the extensive scope of the ACA’s many provisions that are unrelated to the individual mandate.”

A policy brief released Thursday by the Urban Institute, a left-leaning Washington think tank, found that if the entire ACA were repealed, the number of uninsured individuals would increase by 20 million, to about 50 million people (18% of the population). As a result, providers would face the higher costs from uncompensated care; for example, if the ACA had been repealed at the beginning of this year, the amount of uncompensated care sought by uninsured people would have nearly doubled, increasing by about $50 billion, the researchers found.

Congressional Involvement Suggested

But this problem could be solved by Congress, according to Robert Henneke, general counsel at the Texas Public Policy Foundation, a right-leaning Austin think tank, who is also lead counsel for the two individual plaintiffs in the Texas v. U.S. case. “It was correctly recognized by Judge Engelhardt during the Fifth Circuit argument last July that Congress had the freedom to go back and adopt legislation that would provide [patient] protections and yet survive constitutional scrutiny, yet Congress has failed to do so and continues to fail to do so,” he said on the reporter phone call. “At the same time, we’re seeing opportunities opened up by some of the regulatory reforms by Trump and this administration that are providing better access to care at lower cost, and better outcomes for Americans.”

“It should be legislators and policymakers that the hospital associations and the medical industry and Americans look [to] for solutions, rather than expecting courts will come in and rewrite the ACA, which is not their proper role,” Henneke added. “While we litigate the constitutionality of the ACA, let’s put the focus where it’s due, which is on Congress, states, and policymakers to get to work to pass healthcare protections that are legal and will also provide better access to care at less cost, and give more power to individuals over their own healthcare choices.”

As to what will happen next, one possibility is that states such as California, which intervened in the case to argue against striking down the ACA, could ask the Supreme Court to take up the matter. Even then, however, the case could still be sent back down in the meantime. “This could go back to Judge O’Connor and he could begin that provision-by-provision analysis on severability even as California files a [writ of certiorari] petition with the Supreme Court,” Katie Keith, JD, MPH, of Georgetown University Law Center in Washington, D.C., said on a separate phone call with reporters. “We might for a little while have a parallel process until we hear from the Supreme Court.”

If that happens, “it will be interesting to see, beyond severability, how does he deal with the issues raised?” she continued. For example, “does he take on [the question of] whether this would apply only to the plaintiff states? Does he grapple at all with that type of question?”

Washington Correspondent Shannon Firth contributed to this story.