In the Wake of ACA Ruling, the Only Thing Certain Is Uncertainty

Friday’s ruling from US District Judge Reed O’Connor that the Affordable Care Act (ACA) is unconstitutional drew strong opinions from across the political and legal spectrum over the weekend. Many challenged O’Connor’s opinion that when President Donald Trump signed a tax plan removing the penalty for not having insurance—called the individual mandate—that the rest of the law cannot stand.

For now, the only thing certain is uncertainty. HHS issued a statement Monday reiterating that the ACA remains the law of the land.

“The recent U.S. District Court decision regarding the Affordable Care Act is not an injunction that halts the enforcement of the law and not a final judgment,” the statement said. “Therefore, HHS will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision. This decision does not require that HHS make any changes to any of the ACA programs it administers or its enforcement of any portion of the ACA at this time.”

“As always, the Trump Administration stands ready to work with Congress on policy solutions that will deliver more insurance choices, better healthcare, and lower costs while continuing to protect individuals with pre-existing conditions.”

As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!

— Donald J. Trump (@realDonaldTrump) December 15, 2018

An appeal has been promised. Members of Congress from both parties predicted O’Connor would be reversed, and Trump in a tweet called on “Mitch and Nancy,” incoming Senate Majority Leader Mitch McConnell, R-Kentucky, and House Speaker Nancy Pelosi, D-California, to pass a replacement. But the prospects of a replacement law are remote ahead of a final court ruling.

Both incoming Senate Finance Chairman Chuck Grassley, R-Iowa, and Minority Leader Chuck Schumer, D-New York, called for Congress to weigh in—for different reasons. Legal experts specifically discussed the opinion’s argument for severability, with most saying O’Connor is simply wrong.

Georgetown Law’s Marty Lederman wrote a blog post Saturday that asserted that consumers always had a choice between buying insurance and paying the tax; the only difference now is that the tax is gone. The ACA, Lederman wrote, “won’t be unconstitutional in January—instead, it’ll merely be toothless. And if [the ACA] isn’t unconstitutional, that’s the end of Texas’s case. There’s no need even to proceed to severability analysis.”

Even if O’Connor is overturned, his 55-page ruling has set off a fresh round of debate and confusion about the fate of “Obamacare,” which Republicans still vow to repeal despite never quite coming up with a replacement. The more the ACA becomes part of the fabric of the US healthcare system, the harder it becomes to part with the things that both parties like, or at least have found useful.

Take Medicaid expansion. When Chief Justice John Roberts’ 2012 ruling allowed states to decide on their own if they wanted to extend coverage to families earning up to 133% of the federal poverty line, many Republican states balked. In January 2015, only 28 states had signed on. But over time, and especially after the Trump administration allowed states to adopt work rules for recipients, the ranks grew. After voters in Nebraska, Utah, and Idaho approved expansion last month, come January there will only be 14 states without it.

Kansas’ incoming governor-elect, Democat Laura Kelly, campaigned on Medicaid expansion—but with Friday’s ruling, there’s a question whether the Republican legislature will go along.

The most immediate concern, however, is the fate of ACA’s bar against discriminating against persons with pre-existing conditions. Before the law passed, those who had survived cancer or lived with chronic conditions like type 1 diabetes paid soaring premiums, if they could get insurance at all. Polls have shown that protection for coverage of pre-existing conditions is the most popular part of the ACA after the tenet that allows young adults to stay on their family’s health plan until they turn 26 years of age. If the ACA was thrown out entirely, both parts of the law would be in jeopardy.

Senator Susan Collins, R-Maine, who voted for the tax plan that led to Friday’s ruling, spoke about this on Sunday during an interview on CNN:

“There is widespread support for protecting people with pre-existing conditions. There is also widespread opposition to the individual mandate,” she said, repeating the statistic that 80% of those who paid the penalty earned less than $50,000 a year.

“I think this will be overturned on appeal. There’s no reason why the individual mandate provision can’t be struck down and keep all the good provisions of the Affordable Care Act,” Collins said, citing protection for coverage for pre-existing conditions, mandated coverage for substance abuse and mental health care, and family coverage for young adults.

Schumer, appearing on NBC’s “Meet the Press,” called O’Connor’s ruling “awful” and said it went far beyond putting coverage for pre-existing conditions at risk—he said the ruling threatened coverage for opioid treatment, maternity care, and recent efforts to close the prescription coverage gap or “donut hole” in Medicare.

“We’re going to fight this tooth and nail,” Schumer said, calling for a vote to intervene in the case since a decision would turn on Congress’ intent. O’Connor referenced the fact that Congress did not expressly repeal other parts of the ACA when it killed the penalty for the individual mandate in 2017, but he drew a different conclusion than some who voted for President Donald Trump’s tax plan, which included the provision.

Grassley, meanwhile, who becomes the Finance Committee chair in January, issued tweets that called for hearings while trying to reassure constituents:

“Iowans who rely on coverage from [Obamacare] shouldn’t worry about losing their insurance while the courts settle [this] issue, but in the meantime, Congress should figure out a better way to insure Americans at a lower cost [and] better quality. [Obamacare] is fatally flawed. The Finance Committee will hold hearings on the ACA [in the] next Congress.”

Less noticed was how Friday’s ruling could affect Trump administration’s priorities, like the effort to rein in drug prices. The administration is accepting comments on HHS’ proposal to tie prices to an International Pricing Index, a plan that relies on powers that flow from the ACA because it proposes running a pilot through the Center for Medicare and Medicaid Innovation before taking the plan nationwide.

Even while President Trump trumpeted the ruling, the administrator who operates Medicare and Medicaid on day-to-day basis offered a subdued initial response Friday, followed by a more forceful embrace of the ruling Saturday:

On Friday, on the eve of the end of open enrollment in most states, CMS Administrator Seema Verma tweeted, “The recent federal court decision is still moving through the courts, and the exchanges are still open for business and we will continue with open enrollment. There is no impact on current coverage or coverage in a 2019 plan.”