In December 2018, a ruling in a Texas court struck down the Affordable Care Act (ACA). Throughout 2019 this left a cloud hanging over the law’s future. As 2020 begins the recent ruling by the Federal Fifth Circuit Court of Appeals in New Orleans has given the Trump administration a partial victory in its perpetual assault on the ACA.
The appellate court concurred with the Texas court ruling that the ACA’s individual mandate for health insurance is unconstitutional. This is because in the absence of a penalty for not having health insurance the mandate could no longer be considered a tax.
Nevertheless, the appellate court did not rule against the law entirely. Rather, it put the ball back in the lower court (the one in Texas that previously ruled the entire ACA unconstitutional) to determine how much of the law can exist on its own without the mandate.
From a policy perspective, the ACA can continue – and has since January 2018 – without the mandate requiring that everyone have health insurance. While the mandate is a useful policy lever to induce higher numbers of enrollees it’s not critical to the ACA’s continued existence.
But, to the courts policy doesn’t matter, it’s the intricate details of constitutionality and separability that do. And, of course, legal opinions differ on both these issues. There is no settled legal doctrine for which there is consensus across the courts and individuals presiding over those courts. In effect, this means that the ACA will probably head back to the U.S. Supreme Court for a third time. On the two previous occasions, the Supreme Court upheld the constitutionality of the ACA.
Patient advocacy groups, state officials, and policy experts argue the impact of all this legal tussle could be devastating, as it prolongs the uncertainty over the future of the entire healthcare sector. They maintain that protracted legal battles are being waged at the expense of patients, millions who rely on ACA for their insurance needs through the exchanges, and millions more with pre-existing conditions who can obtain health insurance thanks to the ACA.
The legal process can take years. Consequently, any changes to the ACA that result from the federal appellate or Texas courts’ decisions could be a long way off from implementation as it is expected that decisions rendered will be appealed. But, this does little to assuage those who face uncertainty in light of the legal battle over the ACA.
And, the Trump Administration isn’t exactly easing the uncertainty. From the outset the Trump Administration has worn two hats. The first is its refusal to defend federal law under the ACA. This is unprecedented but characteristically Trumpian in its flouting of almost anything President Obama signed off on. The other is to be both pragmatic and opportunistic when it comes to the ACA.
As Centers for Medicare and Medicaid Administrator Verma puts it, “far from undermining the Affordable Care Act the Trump administration is making the very best of what remains a failed experiment.” In fact, Verma appears proud of the fact that “for the third year in a row enrollment in the federal exchange remained stable.”
Administrator Verma has also repeatedly touted innovative payment models, carried out under the auspices of the Center for Medicare and Medicaid Innovation (CMMI). The CMMI’s existence and continued funding is a byproduct of the ACA.
Ultimately, however, the Trump Administration is actively seeking to undermine the ACA. The latest appellate court ruling will embolden the Administration, producing even greater uncertainty for tens of millions who depend on ACA for their healthcare.