How the new Supreme Court could gut — or spare — Obamacare

Is the Affordable Care Act doomed?

The latest legal challenge to the landmark health law could gain fresh momentum thanks to the likely confirmation of Supreme Court nominee Amy Coney Barrett.

“With Barrett’s confirmation, the center of gravity on the court is going to shift to the right and that increases the odds that the Supreme Court could take an aggressive step to invalidate all or part of the Affordable Care Act,” said University of Michigan law professor Nicholas Bagley in a Center for Health Journalism webinar this week.

At stake is the health care of tens of millions of Americans as well as popular provisions such as preexisting conditions protections, free preventative care coverage, and the ability of parents to keep children on their plans until age 26.

Bagley joined Joanne Kenen, the executive health care editor at Politico, to discuss the upcoming challenge to the health law, possible outcomes and timelines, and ideas for how journalists can best cover the case’s potential implications.

What’s happening?

The latest challenge to the ACA’s constitutionality comes via a 2018 lawsuit that was filed after Congressional Republicans eliminated the penalty for not having health insurance at the end of 2017, Bagley explained.  

Removing that financial penalty opened the doors for a lawsuit that argues Americans no longer have a free choice to either buy insurance or face a tax penalty. Without that option, the ACA is essentially commanding people to buy insurance, a move that is beyond Congress’ constitutional powers, plaintiffs argue.

By eliminating the penalty, Congress made the law more coercive, not less, they say.  

“That’s a ridiculous argument but that’s the one they ran with,” Bagley said.

The group of states leading the charge, represented by Republican attorneys general, has had some success, due to the conservative venues where the case has been heard, Bagley said.  But, while Bagley called the case “quite daft,” there is a small but real chance it could take out all or parts of the ACA – lead to serious consequences or outright chaos for the health system, he said.  

Bagley sees several possible “off ramps” for the court if it wishes to avoid completely invalidating the law:

1) Legal standing: Plaintiffs must prove to the court they have enough cause to bring the case before the court. Since the mandate doesn’t apply to states, the plaintiffs have recruited two Texas consultants who say they were obliged to buy insurance because of the law. Unless the court is highly motivated to hear the case, justices could turn the case away on the basis of this questionable standing, he said.

2) Merits: The court could rule against the case based on its merits.

3) Severability: The court could acknowledge there is a defect with the toothless mandate—Congress can’t go around ordering people to buy insurance – but it could rule that the mandate can be severed from the rest of the law, keeping the other provisions intact.

Take people back in time

If the court does invalidate the health law, the implications would be substantial for tens of millions of Americans, Kenen said. In pre-ACA times, people with preexisting conditions often stayed in jobs or marriages for fear of losing their insurance.  

“People forget how much the Affordable Care Act has changed American health care,” Kenen said.

Even for those who don’t get insurance on the exchanges or through the Medicaid expansion, the ACA has had significant impacts. Aside from the deeply popular preexisting condition protections, Kenen pointed to provisions that allow children under 26 to stay on their parent’s plans; better benefits such as mental health parity and substance abuse disorder benefits;  free preventative care; and the elimination of lifetime coverage limits.

The pandemic — and the long-haul COVID-19 patients who have been left with serious chronic conditions — has underscored the importance of the preexisting condition clause, she said. And a possible vaccine could be free under plans’ preventative care provisions.

Kenen urged journalists to take people back to the time before the act’s implementation, she said. Remind your audience of the time when people couldn’t get insurance or ran into coverage limits in the midst of battling cancer. Interview people about the experiences they had before the ACA and what the health landscape could look like again. Specialists who treat people with chronic diseases such as diabetes could share what the law has meant for their patients.  

Another angle: What would it mean for the country’s deep racial disparities and health inequities without the ACA? What are the implications for those with mental health needs or substance use disorders? 

Reporters might look at states that didn’t expand Medicaid and report on what’s happening now in their rural hospitals. What will happen in states that did expand Medicaid if faced with an sudden influx of uninsured and a sudden drop in federal funding?

Finally, when covering politicians who say they’ll protect people with preexisting conditions, respond with a one-word question: “ How”?

What’s next?

The court is slated to hear the ACA legal challenge a week after the general election. If the court proceeds with the case, a decision will likely come in the spring, Bagley said.  

While the court could say a ruling wouldn’t take effect immediately, Bagley says that’s improbable. More likely, the effects of an appeal would be swift, quickly drying up federal money for expanded Medicaid and insurance exchange subsidies.

“Those two funding streams would likely stop overnight, right away,” he said.

States could try to fill in the gaps, but that would mean huge financial investments – at the same time state budgets are taking massive hits from the pandemic.

If Democrats win both the Senate and White House, they could come up with a temporary or permanent patch to reinstate the ACA without the constructional defect. On the other hand, a divided government would unlikely come up with a deal, sending the country back to where we were before 2010, he said.

While Bagley emphasized such a drastic outcome is still unlikely, it’s no longer quite as impossible given a newly conservative court.

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Watch the full presentation here: