On June 25th, the Trump administration filed a brief with the U.S. Supreme Court arguing to strike down the entire Affordable Care Act [“Obamacare”] as unconstitutional.
The timing, especially during a pandemic, struck many commentators as surprising and politically risky. Eradicating the ACA would leave 20 million Americans uninsured, including hundreds of thousands of people who have recently turned to Obamacare as they lost their jobs during the COVID-19 crisis. That number will dramatically increase as the 5.4 million workers who lost their employment in the country (between February and May) start to search for coverage.
Why would President Trump go after Obamacare during a health care crisis? That is the wrong question.
The White House wasn’t anxious to underscore their opposition to the ACA right now- they had no choice. The Supreme Court’s calendar set the timing.
Which is the whole point.
The future of the ACA is out of the hands of this White House- and whoever sits in the Oval Office next inauguration day.
This law- and all it means- is entirely in the hands of the Supreme Court now.
A Very Brief History of the Underlying Case
In December 2017, the Tax Bill reduced the ACA financial penalty for not being insured down to zero (The GOP led Congress did not have enough votes to get rid of the Individual Mandate itself).
The Attorneys General of 20 “Red” states filed a lawsuit in Federal Court arguing that without a penalty, the Individual Mandate was meaningless– and that the entire Law (famously 1,990 pages) had to be struck down.
The Trump Administration did not initially join in that argument (but agreed with ending protections for people with preexisting medical conditions.) Eventually, in March 2019, the DOJ proactively joined the Red states in the fight to nullify Obamacare in its entirety.
In the absence of the Federal Government protecting its own law (which is highly unusual), Attorneys General from 16 “Blue” states took up the other side of the case (with the support of most health care professional associations- such as AMA and the American Academy of Family Physicians- and patient advocate organizations- such as the American Cancer Society and the American Heart Association).
The Federal Judge in Ft. Worth (who was already known to be antagonistic toward the ACA) ruled that Obamacare was rendered unconstitutional by the reduction of the tax penalty. The “Blue” states appealed.
[For a more thorough explanation of this case to this point, please refer to Fontenotes No. 69, and Fontenotes No. 74.]
From Ft. Worth to New Orleans to D.C.
On July 18, 2019, arguments were heard in the 5th Circuit Appellate Court in New Orleans. The 3-judge panel seemed to lean toward the Red States side of the case, but the court decision wasn’t released when expected. We waited all through the Fall, and the Court was silent.
Finally, on December 18th, the Court announced it agreed (2-1) that the lack of a financial penalty rendered the ACA unconstitutional.
Here is a fast-forward summary of the next steps:
- The 5th Circuit left open the question if the whole law had to go,
- the Appellate Court directed the case back to Ft. Worth,
- the “Blue” states asked the United States Supreme court to expedite an appeal to determine whether Obamacare would survive- before the Presidential election this Fall,
- the Trump administration said “no, thank you, please slow this down.”
- The Supreme Court refused the plea for earlier intervention but added it to their caseload next year.
[All of this is explained in further detail in Fontenotes No 87.]
The Supreme Court Takes the Case
The Supreme Court added the case to their Fall calendar on March 2nd.
And this is why the Trump Administration was filing a brief to strike down Obamacare three weeks ago- they had to.
The Trump Administration may have wanted to avoid the political black eye- but they had no choice. They filed “last-minute” on June 25th– the Court’s deadline.
Presumably, one or more of the states seeking to bring down Obamacare might regret taking Medicaid from their own people in the middle of a pandemic (such as Arizona, West Virginia, and North Dakota, which all expanded their Medicaid to large numbers of their citizens under the ACA- and are all at the same time trying to eradicate the law). They can’t stop this case now either.
Could a Newly Elected President Biden Stop This Case?
What Are the Stakes?
We will have the answer from the Supreme Court this time next year.
They could uphold the law in its entirety. They could strike down only parts of Obamacare. Or they could, as asked for by the “Red” states and the Trump Administration, declare all the ACA unconstitutional.
What would that mean?
The 38 states that expanded Medicaid pay 10% of that cost- the other 90% comes from the Federal government. That, presumably, would stop immediately.
Most people who purchased policies on the ACA Exchanges (also known as Marketplaces) receive a subsidy from the government to help them afford their insurance. That assistance would stop.
Denying coverage to anyone with a preexisting medical condition would no longer be prohibited. Bonus? Having been sick with COVID (“Coronavirus”) would be a preexisting medical condition.
Children between the age of majority and 26 would be dropped from their parents’ policies.
And so much more – see Fontenotes No 80 for 25 more things you might miss if the ACA goes away.
Could Congress Fix This if the Supreme Court Takes the ACA Away?
Is it possible that a newly Blue Congress could pass the law again? Arguably– but achieving the ACA wasn’t a picnic the first time (and required some procedures that were questionable at best).
Democrats also participated in repealing the Cadillac Tax and other taxes that funded the law, and helped destroy the IPAB– the first truly independent body meant to control Medicare Spending (for more on that see Fontenotes No 55).
Even if they could replicate a new Obamacare- it would take Congress time to get the job done- during which all those people mentioned above would be uninsured, subject to preexisting conditions, dropped from their policies, etc.
And that is assuming that Congress turns really Blue next year- which is a stretch.
How Will Americans React?
Obamacare currently has a favorability rating of 52%.
Does that mean that the remainder of Americans will celebrate a Supreme Court Ruling against the law?
We all hope that by July 2021, America will be on the other side of COVID-19, and our economy will no longer be in shambles, so the destruction of the ACA wouldn’t be happening “in the middle of a pandemic.”
But will people against the law in a poll still rejoice when it is their coverage lost, their state struggling to care for millions kicked off Medicaid, their preexisting conditions come back to haunt them?
Even if you want to see the ACA reversed, having it declared unconstitutional by the Court will result in a far more abrupt end than a Congressional “Repeal and Replace” success. Regardless of your politics- you can be concerned about the chaos that will ensue.
We are waiting to see what the United States Supreme Court- with no further input from any of us- decides to do.
The time for reacting to the Trump Administration’s quest to bring down Obamacare is long past. That was a question for the last election- not this next one.
“Surprise” and Questions of “Political Risk” are Too Late.
Want to Know More?
1. Where is your state on this case?
You might live in a state that is part of this case, or in a state that withdrew (that happened after the political control of some states switched in the 2018 elections) or in a state that is sitting on the sidelines.
This excellent map from the Kaiser Family Foundation will tell you everything you need to know (that link will provide you with a lot more information about the Supreme Court challenge):
2. The States most at risk for disruption are those that expanded Medicaid.
While we are on great maps (and the always-valuable information provided by the Kaiser Family Foundation) here is the status of States that have Expanded Medicaid under the ACA (as of July 1, 2020). If you go to the link, the Map is interactive and will provide you with the history and status of each state in detail.