On September 10, the Center for Law, Health & Society at Georgia State Law hosted an update discussion on the Affordable Care Act (ACA) and the Texas v. U.S. case. Eric Segall, Kathy and Lawrence Ashe Professor of Law, and Erin Fuse Brown, associate professor of law, led the conversation.
Title I of the ACA was designed as a “three-legged stool”: 1) health insurance non-discrimination for pre-existing conditions, 2) the individual mandate requiring nearly all people to have health insurance or pay a penalty, and 3) subsidies to make health care affordable. According to professors Brown and Segall, the ACA has faced several legal challenges to knock out legs from the stool.
The U.S. Supreme Court found in NFIB v. Sebelius in 2012 that the penalty for not having health insurance was constitutional as a tax. In 2017, Congress reduced that penalty to $0, effectively ending the individual mandate.
“While there has been a slight decline in enrollment in the marketplace from 2018 to 2019, lack of enforcement of the individual mandate didn’t topple the stool,” said Fuse Brown. “The stool may be wobbly, but it is still standing.”
The ACA faces a new challenge in Texas v. U.S., filed in 2018 by two individual plaintiffs, and joined by many Republican-led states. Judge Reed O’Connor (N.D. Tex) found that, without the penalty, the individual mandate is unconstitutional and that it is inseverable from the ACA, so the entire law must be struck down. Now before the Fifth Circuit, with a decision expected this fall, the case will likely be appealed to the Supreme Court.
Segall outlined the legal issues in this case: “First, does anyone have standing? Second, if they have standing, is the mandate unconstitutional? And third, if unconstitutional, what happens to the rest of the law? The judge answered all three questions wrong.”
The legal doctrine of standing requires plaintiffs to have suffered personal injury caused by the defendant that can be redressed by the court.
“Legal scholars on both sides agree the plaintiffs suffered no injury for being hit with a $0 penalty for not buying insurance they did not wish to buy,” said Segall. “You can’t just go to court and say ‘I’m mad!’ But let’s assume there is standing and the individual mandate is unconstitutional, the rest of the law should still stand.”
Potential outcomes of the case could include that the ACA is upheld, either with or without the individual mandate, it could be struck down entirely, or only in plaintiff states.
According to the Kaiser Family Foundation, striking down the ACA would result in an increase of 20 million uninsured, including those losing Medicaid expansion coverage, those no longer able to afford coverage with tax credits in the marketplace, and young adults through age 26 covered under their parents’ policies. Fifty-two million people who have pre-existing conditions could again be denied coverage under pre-ACA rules.
Furthermore, the three-legged stool is only a small part of the statute, which includes FDA approvals for biosimilars, Medicare payment reform, Medicaid expansion, and other public health and health care provisions.
“If the ACA is struck down, would these provisions revert to pre-ACA rules? It would be difficult enough if all states faced this, but it would be pure chaos if some states were still under the ACA and others were not,” said Fuse Brown.
Segall points out that efforts to repeal and replace the ACA failed in 2017 with a Republican-led Congress and White House.
“Striking down the ACA judicially would be a politically-charged decision that could undermine the legitimacy of the judicial branch. I don’t think Chief Justice Roberts will risk that.”