Court Ruling Creates Uncertainty for ACA
Late last week, Judge Reed O’Connor found the Affordable Care Act (ACA) to be unconstitutional following Congress’ repeal of the individual mandate penalty in 2017. Most importantly, the law remains in effect pending what is likely to be a lengthy appeals process. Nonetheless, the ruling will likely have significant impacts on the health care debate in Washington and around the country. The decision is expected to be appealed to the Court of Appeals for the Fifth Circuit, which will likely consider it at some point in 2019, and the case could eventually be heard by the Supreme Court.
In February 2018, 20 states with Republican Governors or Attorneys General filed a lawsuit, Texas vs. Azar, alleging that the zero-ing out of the individual mandate made the entire ACA unconstitutional. Congress removed the tax penalty for individuals who did not obtain insurance as part of their larger 2017 tax reform package.
In his ruling, Judge O’Connor sided with the plaintiffs on two critical points by finding that:
- The ACA’s individual mandate separate from its tax penalty is unconstitutional, and
- The other provisions of ACA are inseverable from the individual mandate and thus the entire law is invalid.
O’Connor’s decision injects a new round of uncertainty in the health insurance marketplace, and for the health care sector more generally, given the sweeping nature of the December 16th ruling. This uncertainty is driven by ambiguity around the timing for proceeding and ultimately, the outcome of the legal process.
The Affordable Care Act will remain in effect pending a “final” decision by Judge O’Connor and subsequent appeals in Texas v. Azar. Legal experts are overwhelmingly skeptical that Judge O’Connor’s ruling will be upheld through the appeals process.
The decision is expected to be appealed to the Court of Appeals for the Fifth Circuit — with jurisdiction over Texas, Louisiana, and Mississippi — which will likely consider it at some point in 2019. While some observers argue that the case is unlikely to make it to the Supreme Court, ACA critics including White House Press Secretary Sarah Huckabee Sanders have said “we expect this ruling will be appealed to the Supreme Court.”
Despite the addition of conservative judges to the Supreme Court in recent years, it is worth noting that all five Justices who initially upheld the individual mandate against an earlier legal challenge, NFIB v. Sebelius, (Roberts, Ginsberg, Breyer, Sotomayor, and Kagan) remain on the Supreme Court.
With the ACA already top of mind for Democrats, the decision has sharpened their focus on potential “fixes” without meaningfully reducing the appetite for other health care issues on their agenda, such as drug pricing, transparency, and cost containment. The decision also has the potential to put Republicans in an awkward position, dividing the caucus between those who want to fully eliminate the ACA and more middle-of-road members who represent parts of the country where the ACA is relatively popular. This divide is also playing out in the Administration where the President Trump has praised the decision, while key federal agencies have sought to reassure individuals, providers, and the health care industry generally that the health insurance exchanges are open for business and the Centers for Medicare and Medicaid Services (CMS) demonstration programs are proceeding as planned.
During this time of uncertainty, the National Council will remain vigilant about protecting Medicaid and the Affordable Care Act, in particular, its provisions that are most important for individuals with mental health and addiction disorders. Together with our 2,900 members, we will continue our advocacy on Capitol Hill and across the country to defeat proposals that would limit access to care while fighting for new innovations, like Certified Community Behavioral Health Clinics, that promise to help communities meet the unmet need for mental health and addiction treatment in this country.