A Work in Progress: The ACA's Uncertain Future
The Affordable Care Act (ACA) has been a work in progress since its enactment nearly nine years ago. You can expect that pattern to continue this year and beyond. The current environment in Washington and a sweeping legal challenge to the ACA’s fundamental constitutionality have given followers of the law’s evolving requirements plenty to monitor and speculate about in the days ahead.
Labor market dynamics
That legal challenge was made by a U.S. District Court for the Northern District of Texas in the waning days of 2018. The Texas court, at the urging of several Republican state attorneys general, held that the entire ACA’s legal foundation was swept away by Congress’s 2017 elimination of the individual mandate, which took effect January 1, 2019.
Judge Reed O’Connor, who wrote the opinion in Texas v. U.S., believes that, if new legislation eliminates one part of the law, the rest of it must also disappear. The Trump administration, for its part, applauded the ruling — except for the invalidation of the ACA’s popular provision banning pre-existing condition exclusions.
So, what will employers do in the unlikely event that all substantive ACA requirements governing employer-sponsored group health plans are relaxed or even eliminated because of future higher court decisions based on the Texas ruling? Their response will probably be guided by labor market dynamics. After all, most employers provided health care benefits before the ACA’s employer mandate — albeit often without as many bells and whistles. To attract strong job candidates and retain valued employees, they’ll have to remain committed to offering attractive benefits no matter what becomes of the law.
Supreme Court’s role
It’s unclear how long employers will have to wait before the legal cloud hanging over the ACA cast by the Texas ruling will be lifted. If a federal appeals court finds the opinion’s legal reasoning unsound, there’s no guarantee that the U.S. Supreme Court would consider the case on another appeal. For what it’s worth, a New York Times editorial, typical of media coverage of the ruling, asserts that the legal theory underpinning it is “ridiculous” in the view of “legal scholars across the ideological spectrum.”
The Supreme Court weighed in on the ACA’s constitutionality in 2015. While essentially upholding the law, the majority court opinion by Chief Justice John Roberts implied that future decisions about the law should be left to Congress. “In a Democracy, the power to make the law rests with those chosen by the people,” Roberts wrote. “We must respect the role of the legislature, and take care not to undo what it has done.”
That suggests that, if there’s an appeals court ruling overturning Texas, the Supreme Court might simply let it stand and not agree to review it. Similarly, it also suggests that, if the appeals court upheld the lower court’s ruling, the Supreme Court might take the case and overturn it on grounds that the courts are inappropriately injecting themselves in what should be a legislative matter.
Meanwhile, the legislature, with a new Democratic majority in the House of Representatives, is no longer on a crusade to massively overhaul the ACA, much less “repeal and replace” it. Many Republicans who had made that a priority have changed their tune. And, of course, most of the newly elected Democratic members of Congress have declared that preserving key ACA features — particularly its ban on pre-existing condition exclusions — is their top priority. This fact hasn’t gone unnoticed by Republican incumbents. Public opinion ultimately drives most political public policy decisions.
Polling by the Kaiser Family Foundation (KFF) is in line with the midterm election results. For example, 51 percent of Republicans, 87 percent percent of Democrats and 67 percent of independents have told pollsters they’d want their states to establish a ban on pre-existing condition exclusions if the ACA were ultimately deemed unconstitutional.
Similar views were generated in a KFF poll on support for the ACA’s “essential health benefits” requirements for health plans sold via the Health Care Marketplaces (commonly known as “exchanges”). Stronger majorities (68 percent of Republicans, 79 percent of Democrats and 78 percent of independents) like the ACA’s ban on employee co-pays and deductibles for preventive services.
Finally, support for the ACA’s employer mandate in a poll taken last November was also high, even among Republicans (56 percent). Among Democrats, support was at 88 percent, and 61 percent among independents.
Strong public support was also shown in the KFF polling on other facets of the ACA involving individual markets, Medicaid and Medicare. The least popular ACA provision — the individual mandate — has already been dispensed with by Congress.
A complex undertaking
According to the KFF, “More than eight years after enactment, ACA changes to the nation’s health system have become embedded and affect nearly everyone in some way.” The implication, KFF states, is that it would be a “complex undertaking” to remake the health care financing and delivery landscape if the ACA were to disappear. That’s a conclusion that ACA supporters and detractors surely can agree on.