Supreme Court Justices Seem Wary of Striking Down Affordable Care Act

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The Supreme Court has just begun deliberating the constitutionality of the Affordable Care Act (ACA), but so far justices appear to be in favor of keeping intact much of the far-reaching health care law.

The ongoing litigation challenges the ACA’s minimum essential coverage provision (known as the individual mandate) and raises questions about the entire law’s survival.

The ACA’s individual mandate required all Americans to obtain health insurance. In 2012 the Supreme Court upheld the mandate and its tax penalty for those who failed to obtain insurance, saying the provision was authorized by Congress’s power to levy taxes. Then Congress passed the Tax Cuts and Jobs Act, setting the tax penalty for failing to obtain health insurance at zero as of January 2019. Without the tax penalty, the constitutionality of the mandate is once again in question.

In March, the Supreme Court accepted an appeal by 21 states led by California, in California v. Texas (formerly Texas v. United States), to rule on the constitutionality of the ACA. The court also accepted a cross-appeal by Texas and other states asking for the invalidation of the entire law.

The Trump administration opposes the law. “It is unusual for the federal government not to defend the constitutionality of a federal law,” said MaryBeth Musumeci, associate director at the Kaiser Family Foundation’s Program on Medicaid and the Uninsured.

A trial court ruled that the 10-year old, 1,000-page ACA in its entirety should be invalidated. APA and four other medical organizations filed an amicus brief in that case, asking for a reversal to avoid “a devastating impact on patients and the American health care system.” A divided Fifth Circuit Court of Appeals set aside the trial court’s ruling but agreed that the ACA’s individual mandate is unconstitutional.

The Supreme Court justices spent much of last month’s hearing weighing whether there is even legal “standing” for the lawsuit. Chief Justice John G. Roberts Jr. and Justice Brett Kavanaugh, both conservatives, questioned whether the ACA’s individual mandate could have caused the required legal injury for the case to proceed now that the Congress zeroed out the tax penalty.

“The individual mandate now has no enforcement mechanism, so it’s really hard to determine what the threat of an action is against you,” Roberts said.

If standing is demonstrated, the nine justices must then decide whether the mandate is constitutional and, if not, whether the mandate can be “severed” from the law and leave the remaining ACA provisions to stand or if the entire law should be struck down.

Michael J. Mongan, the attorney representing California and the 21 states, argued in favor of excising the mandate if needed. The insurance marketplaces established by the ACA have continued to function well even without the tax penalty because of the incentives the ACA gives individuals for buying health coverage, he said.

Both Roberts and Kavanaugh discussed severing the mandate and seemed reluctant to strike down the entire law. “I think it’s hard for you to argue that Congress intended the entire act to fall if the mandate were struck down when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the act,” Roberts said. “I think frankly that they wanted the court to do that. But that’s not our job.”

Kavanaugh said, “I tend to agree with you [that] this is a very straightforward case for severability under our precedents, meaning that we would excise the mandate and leave the rest of the act in place. …”

If Roberts and Kavanaugh are in agreement with the three liberal justices on the court, there could be potentially five votes in favor of tossing out the case or potentially removing the mandate—and doing as little damage to the rest of the law as possible, said KFF’s Musumeci. However, she emphasized, “Any reading of the oral arguments is highly speculative at this point. Nothing is certain about the outcome until the court issues its written opinion.” The court tends to issues its higher profile decisions closer to the end of the term in June.

ACA Critical for Many Americans

In the 10 years since its passage, the ACA has reshaped the health insurance landscape. Millions rely on coverage through the ACA’s individual marketplaces and the state Medicaid expansions it created, and millions more benefit from its myriad patient protections. Overturning the law would cause massive upheaval across the entire health system during a global pandemic, triggering far-reaching implications for most Americans, whether their health care is individual, employer-based, or government sponsored.Overturning the ACA would increase the number of uninsured by at least 65%, causing more than 20 million Americans to lose coverage, according to the Washington, D.C.-based think tank Urban Institute. About 15 million Americans would lose Medicaid and CHIP eligibility granted by ACA’s Medicaid expansion.

“If the court overturns or dramatically alters the Affordable Care Act in the middle of a pandemic and the growing mental health crisis created by the outbreak, people most in need will not have access to care,” said APA CEO and Medical Director Saul Levin, M.D., M.P.A., in a press statement last month. “APA is extremely concerned about the lives of those with mental health and substance use disorders who are covered under the ACA. Now more than ever access to health care is essential, and we should be doing everything possible to make it available.”

Overturning the law would also trigger major changes in employer-sponsored coverage. “The ACA has been in place for so long now that a lot of people aren’t aware of all that it encompasses,” said Tara Straw, senior policy analyst at the Center on Budget and Policy Priorities, a nonpartisan research and policy organization.

The ACA requires plans to cover new employees’ preexisting health conditions on their first day of coverage; prior to the ACA, plans would decline to cover these employees for previously treated conditions, including mental illness, for up to 12 months, Straw pointed out. The law also requires all health plans to cover preventive health care with no cost sharing, allowing a crucial point of contact for patients to be screened for possible mental illness, among other ailments.

Also, the ACA extends coverage to dependents up to age 26 under their parents’ employer plans, giving coverage to 2.3 million young adults at an age when mental illness is often first diagnosed. Prior to the ACA, most employer plans terminated dependent coverage at age 18, Straw explained.

Without the ACA, insurers in the individual market could revert to their former practice of charging higher premiums—or denying coverage altogether—to individuals with mental illness or other preexisting conditions. Individuals who failed to disclose their conditions and later found themselves in need of care for them could find their policy canceled.

Health plans would also no longer be required to cover the ACA’s 10 “essential health benefits,” which include mental and substance use disorder services, including psychotherapy, prescription drugs, hospitalization, emergency services, and lab work. It also applies parity to coverage. Straw explained that prior to the ACA, most individual health plans didn’t cover mental or substance use disorders or at best offered expensive riders priced for those who expected to need those benefits. ■