Could three times be the charm for the fate of the Affordable Care Act?
One week after the presidential election, the Supreme Court began hearing arguments about the constitutionality of the Affordable Care Act (ACA). This is the third time the high court is considering an aspect of the law’s legality. Each time the court ponders the law, millions of Americans enter panic mode, as they fear they could lose their affordable health insurance if the law is struck down. Likewise, hospitals and other health providers worry about the clinical implications and expensive complications that could arise when individuals without insurance forego accessing healthcare. The ACA is credited with helping New York State cut its uninsured rate in half – from about 10 percent to five percent.
The first challenge to the law occurred in 2012 when the National Federation of Independent Business argued that the individual mandate was unconstitutional, questioning Congress’ scope of taxing and spending power. The court ultimately ruled that the individual mandate to buy health insurance was constitutionally within Congress’ taxing power. However, the court also ruled that the law’s requirement that a state expand its Medicaid program in order to continue receipt of its existing federal subsidy match was an over-extension of Congress’ spending powers. The individual mandate remained law, but Medicaid expansion became voluntary. The current Supreme Court case is taking a look once again at the constitutionality of the individual mandate as a result of 2017 tax reform legislation that eliminated the tax penalty for not having insurance.
The second challenge to the ACA occurred in 2015. Plaintiffs in this case based their argument on four words in the law – “established by the state” – to mark a distinction between states that opted to develop their own insurance exchanges (such as New York) and those that did not, leaving their residents to purchase insurance from the federal exchange. The plaintiffs maintained that only individuals in state-operated exchanges were eligible for tax credits. The court ruled otherwise and the tax credits to this day are available to eligible individuals regardless if the insurance is purchased from a state or federal exchange.
The current challenge to the ACA questions the Supreme Court’s decision in 2012 that ruled the individual mandate is constitutional. A handful of Republican governors and attorney generals assert that because the tax penalty was eliminated through the 2017 tax reform law, thereby rendering the individual mandate moot, so the entire ACA should be invalidated. Recall that the 2012 decision said the tax penalty for not purchasing insurance was valid under Congress’ taxing powers. Does removing this tax take away Congress’ power of intent for the entire law? This is the question of severability that the justices will deliberate.
Like previous challenges, the current case has wound its way through the U.S. court system and has been years in the making. A federal appeals court decision rendered in December 2019 ruled that the ACA individual mandate is unconstitutional but does not invalidate the entire ACA. The case moved on to the federal 5th Circuit Court of Appeals, which sent the case back to the original district court in Texas to decide if any of the other provisions of the ACA could exist without the mandate. That Texas Court had originally ruled the entire law invalid in 2018. This brings us to the current deliberations by the Supreme Court. The Kaiser Family Foundation website has a good summary and timeline of the case now before the court.
What’s at Stake?
According to the New York State Department of Health, the loss of the ACA would directly impact about 2.1 million people added through the Medicaid expansion and more than 1.1 million people who enrolled in coverage through the state’s New York State of Health marketplace. Many marketplace insurance purchasers receive federal subsidies, which are based on income levels. Nationwide, 24 million people could lose their health insurance. Hospitals’ uncompensated care costs would increase exponentially, particularly stressing those hospitals that already care for high numbers of uninsured and underinsured patients.
The Supreme Court is expected to rule on the case in June 2021.
About the Suburban Hospital Alliance of New York State
The Suburban Hospital Alliance of New York State advocates on behalf of hospitals in the Hudson Valley and Long Island regions. It engages key lawmakers and regulatory decision-makers in Albany and Washington to ensure reasonable and rational health care policy prevails.
The Nassau-Suffolk Hospital Council represents the not-for-profit and public hospitals on Long Island. It works in conjunction with the Suburban Hospital Alliance of New York State to advance legislative and regulatory priorities. NSHC serves as the local and collective voice of hospitals on Long Island.
The Northern Metropolitan Hospital Association represents the not-for-profit and public hospitals in the Hudson Valley region. It works in conjunction with the Suburban Hospital Alliance of New York State to advance legislative and regulatory priorities. NorMet serves as the local and collective voice of hospitals in the Hudson Valley.