Simplifying the recent ACA challenge

At the end of 2018, the Affordable Care Act (ACA) was once again thrown into the legal spotlight when a Texas judge ruled that the law was unconstitutional because the individual mandate was essentially no longer in effect.

Remember that the individual mandate was/is a provision of the law that requires all Americans to purchase health care coverage or pay a penalty. This provision was effectively made moot when the 2017 Republican tax bill zeroed out the penalties (starting in 2019) associated with the mandate, rendering the entire provision basically dead in the water.

The Texas court ruling concluded that the entire ACA must be struck down due to the change to the individual mandate. This ruling has been stayed pending the appeal. On July 9, the U.S. Court of Appeals for the 5th Circuit heard oral arguments in the appeal of this decision.

What the arguments boiled down to

Forgetting all the technical legal arguments that overpaid lawyers have made throughout the legal process, the basic question at the heart of this case is simply: Is the ACA constitutional and able to survive without the individual mandate?

Lawyers on both sides of the case have their legal strategies and evidence to support their side of the equation, but at the end of the day, it is likely the Supreme Court will have final say on this issue once again. No matter how the Appellate Court rules in this case, the losing side will probably appeal to the Supreme Court.

Who is challenging and defending the law?

A group of Republican governors and attorney generals from 18 states, led by Texas, has brought this legal challenge to the ACA.

A group of 21 states, including Democratic attorneys general and the House of Representatives, is defending the constitutionality of the ACA.

What is at stake?

If the law is struck down in its entirety, it could leave millions of Americans without coverage. There is no plan in place to take the place of the ACA and prevent chaos in the health care market.

Striking down the law would also eliminate the popular provisions of the ACA such as protections for people with pre-existing conditions, subsidies to make individual health insurance more affordable, expanded eligibility for Medicaid, coverage of young adults up to age 26, and coverage of preventive care with no patient cost-sharing. Currently, there is no alternative plan that could take the place of the ACA, and we’ve seen several failed attempts by a Republican controlled House and Senate to legislatively pass one.

When will a ruling be issued?

While no definitive date for a ruling was given by the 5th Circuit, it did indicate that a ruling would come within a few months, likely in early fall.

However, this probably won’t be the end of the lawsuit as whoever the losing party is will likely appeal the ruling to the Supreme Court.

Complicating factors in the lawsuit

The Department of Justice (DOJ) hasn’t kept its position straight since the legal challenge, complicating the proceedings.

Prior to the case, the DOJ’s position was to defend the ACA as the law of the land. During the legal challenge in District Court, it did an about-face and decided to no longer defend the constitutionality of the law, agreeing that the entire law should be struck down.

During the appellate process, the DOJ changed its position even further, stating that certain provisions of the law should survive, or possibly all provisions should be struck down in the states that joined the original challenge, but the ACA should remain valid in the states that are defending the law.

No one is really sure how those tactics would work, and the DOJ legal counsel did very little to clarify its position during oral arguments.

The main takeaway from the DOJ’s convoluted stance is that even it is unsure of what path forward it wants for the ACA.  

What we know about the Supreme Court and the ACA

The Supreme Court ruled on and upheld the constitutionality of the ACA in 2012. Obviously, the circumstances around the individual mandate were different then, but most legal scholars and observers believe that if the 5th Circuit Court of Appeals upholds the District Court’s ruling, and strikes down the ACA, the Supreme Court will take up and hear the appeal.

It is less clear whether the Supreme Court will take the case if the 5th Circuit overturns the District Court’s ruling, upholding the constitutionality of the ACA. It is possible the Supreme Court would simply not take the case, at which point the ACA is once again solidified as the law of the land.

However, the new makeup of the Supreme Court causes some uncertainty. Brett Kavanaugh has replaced the infamous swing-voter, Anthony Kennedy, giving the court a conservative majority.

Does that necessarily mean that the ACA is doomed if it reaches the highest court? Only time will tell, but the earliest the case could reach the Supreme Court is sometime in 2020.

How the lawsuit impacts the 2020 election

An obvious question many have is how this would impact the 2020 election.

The lawsuit will be unfolding in the middle of the 2020 presidential election debate where health care is already one the most talked about and controversial topics.

The country is currently divided on the future of health care, and this legal challenge only heightens the intensity of the debate. For Republicans, it poses the uncomfortable question of why couldn’t they create a suitable replacement when they controlled the House, Senate, and Oval Office. For Democrats, it forces them to either stand behind the ACA and articulate how they would strengthen the law and make it better for Americans, or abandon a decade-old legislative cornerstone of the Democratic party and move farther left toward a Medicare-for-all platform.

Either way, this only stokes the fire as we enter what is assuredly going to be a contentious battle for the White House.

What this means for employers

At the end of the day, this is more of the same. Legal challenges and the political spotlight have defined the ACA since its inception.

The potential outcomes of this legal challenge are no different than in 2012 or in 2017.

The question that really must be answered, regardless of the outcome of this legal challenge is: What is the future of health care in America?

We don’t know how the future leaders of our country will answer the question yet, but in the meantime, the ACA remains the law of the land. As this challenge winds its way through the legal process, employers must continue to comply with the ACA’s requirements and start preparing for 2019 filing. 

Tags: employers, legislative activity