Health Care Reform:

New Administration May Not Be Enough to Save the ACA

Patients, payors and health exchanges await nervously as the drama over the Affordable Care Act (ACA, aka Obamacare) continues to play out. It looked like the U.S. Supreme Court had settled the issue once and for all in 2012 by upholding the law’s constitutionality in a case called NFIB v. Sebelius. But after capturing all three branches of the federal government in 2016, the Republicans decided to make one more run at the law. The actual case came from the states level with 20 GOP governors leading the charge.

Republicans also had new legal ammunition. That’s because the basis of the Sebelius ruling was that the ACA represented a constitutional exercise of Congress’ right to tax. But in Dec. 20, 2017, Congress enacted the Tax Cuts and Jobs Act establishing a $0 mandate penalty. The plaintiffs in the new case contend that a $0 penalty is not a tax and thus no longer supportable as an exercise of Congressional taxing powers. And since the individual mandate isn’t severable from the rest of the ACA, they asked the federal court to strike down the entire law.

The case ping ponged around the Texas federal courts, with the district court siding with the Republicans, only to be rebuffed by the Fifth Circuit’s order to go back to the drawing table. All the while, insurers, the health markets and especially individuals who depend on the ACA for health coverage twisted in the wind. So, in response to urgent pleas, the Supreme Court made the unusual decision to rule on the case without waiting for a final judgment from the lower courts.

Elections Have Consequences

When the Supreme Court heard oral arguments on the latest court challenge to the ACA back in November, the DOJ took the position that the entire law was unconstitutional and needed to be struck down. Of course, a lot has changed since then, most notably the management of the DOJ, whose boss was a part of the Obama administration that championed the enactment of the ACA.

Although the Biden DOJ can’t end the case, it can and is determined to influence its outcome. With that in mind, new Deputy Solicitor General Edwin Kneedler sent the Justices a letter in early February arguing that “rather than imposing a new burden on covered individuals, the [individual mandate] preserved the choice between lawful options and simply eliminated any financial or negative legal consequence from choosing not to enroll in health coverage. Kneedler didn’t request new oral arguments or additional briefing from the state attorneys general.

Takeaway

So, what happens next? As it was back in November, the answer is “we don’t know.” For what it’s worth, Court watchers that observed the November oral hearings came away with the impression that all nine Justices appeared to be highly skeptical of the legal arguments for striking down the entire ACA. But predicting how Justices will rule on a case based on their line of questioning during oral hearings is anything but an exact science.

While not totally insignificant, the transition of the DOJ from Republican to Democratic leadership will likely have little effect on the ultimate ruling. Of greater potential significance is Democratic control over the White House and both houses of Congress, which provides a window for adopting new legislation in the event that the Court does find the entire ACA unconstitutional. Whether a new healthcare plan is a realistic sustainable resolution remains an unknown and perhaps ultimately moot issue.

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