Beyond the News: What Does Latest ACA Court Ruling Really Mean?

You’ve no doubt heard the news about the Dec. 18 federal appeals court ruling striking down part of the Affordable Care Act (ACA) as unconstitutional. But like most people, you’re probably wondering what it means. We’ll break it down for you. Bottom Line on Top The U.S. Court of Appeals for the 5th Circuit court ruling is the latest but far from the last development in the seemingly endless quest of Republicans to cut the constitutional underpinnings out from under the ACA. The challengers got part of what they wanted when the court found that the individual mandate, i.e., the ACA requirement that Americans carry health insurance or pay a tax penalty, is unconstitutional. But they didn’t get what they were really hoping for—and even expecting—a ruling finding the entire law unconstitutional, even without the individual mandate. That was how the lower court came out last December. The individual mandate was an essential part of and couldn’t be severed from the ACA, the court reasoned. So, if the mandate was unconstitutional, the whole law was too. The 5^th Circuit wasn’t prepared to take it that far. Explain your reasoning and analysis more clearly, it instructed the lower court, and we’ll decide if you’re right. Practical Impact In essence, the 5^th Circuit ruling decides nothing and prolongs the case for another year or so. That’s how long it will probably take for the case to ping-pong back to the appeals court setting the stage for an all but inevitable showdown in the U.S. Supreme Court. In terms of right now, the three-judge panel’s 2-to-1 ruling (2 Republican vs. 1 Democratic appointee) on the mandate has no real immediate practical effect on consumers because Congress had previously decreased the penalty for people who don’t have insurance. But the uncertainty over the rest of the ACA will continue to upset the peace of mind of millions of Americans. Ditto for the insurance markets and payors who have much to lose if the entire law is found unconstitutional and the ACA marketplaces are abolished. The other elements of the ACA law at risk of being struck down include:

• Insurance subsidies for people who acquire health plans through ACA marketplaces;
• The expansion of Medicaid in three dozen states;
• The requirement that insurers cover people with pre-existing conditions;
• The ability of young adults to stay on their parents’ insurance policies until they turn 26; and
• No-charge preventive care for older Americans on Medicare.

If declared unconstitutional, it’s been estimated that 17 million could lose health care coverage, and more than 50 million people with pre-existing medical conditionals could be denied health insurance. A complete repeal of ACA would also be detrimental to managed care organizations like Anthem, Cigna, Centene that have established themselves in the ACA marketplaces and expanded their footprints there. ACA also is woven more subtly into many other aspects of the health care system, from payment formulas for hospitals and doctors to experiments intended to nudge health care from a system that pays for the quantity of medical services to one based on the value of care patients receive. Additionally, if ACA is declared unconstitutional, it could undermine the Trump administration’s proposals to lower drug prices.