Legislation & Regulation

The Supremes Have Spoken and ACA Keeps On Hangin' On

Court challenges have failed. Repeal bills will be vetoed. The next major chapter in the ACA’s history may depend on who wins the White House next year.

Richard Mark Kirkner

Now that the Supreme Court has handed down its ruling in the much anticipated King v. Burwell case, upholding ACA and premium subsidies, the head-scratching and soothsaying about what’s next for the health care law commenced.

The day the ruling came down President Obama declared that “this law is working—and it’s going to keep on doing that.” But the Congressional Budget Office (CBO) estimates that there are still 35 million uninsured Americans, and the Kaiser Family Foundation estimates that just 36% (10.1 million out of 28 million) of Americans who could buy insurance on the public exchanges have done so.

Chief Justice John Roberts

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,“ Chief Justice John Roberts wrote in the majority opinion in King v. Burwell.

King v. Burwell leaves the heart of the ACA (premium subsidies, the individual mandate, guaranteed issue) intact. But some components of the law may yet get picked off by remaining legal challenges or legislative action. The employer mandate, the sustainability of the state-operated exchanges, and funding for the law are still very much in the crosshairs of partisan debate.

Both the House and Senate have advanced budget plans that would defund the ACA. Battles over health care are continuing to be waged at the state level. For example, myriad lawsuits have been filed challenging the requirement to provide women contraceptive coverage without copayments or deductibles.

Meanwhile, the lawsuit that House Speaker John Boehner and congressional Republicans filed that claims the administration is illegally providing tax credits and cost-sharing payments to health plans without a congressional appropriation is moving forward in the federal courts.

Nicholas Bagley

Legal challenges to the ACA might still crop up, but they won’t amount to much, says Nicholas Bagley, a law professor who’s written extensively about the law. They are “unlikely to succeed.”

But Nicholas Bagley, a University of Michigan law professor who has written extensively about the ACA and health care, does not expect the post–King v. Burwell legal challenges to amount to much: “The challenges are unlikely to succeed or target parts of the ACA that don’t really go to its heart.”

Washington may not be done yet

Even if the ACA proves to be relatively impervious to court challenges, political challenges and legislative action might still undo the law. Say a Republican wins the presidential election next year and the GOP retains control of Congress as expected. Then, says Bagley, there will be political pressure to either amend the ACA or repeal and replace it. “So we’re going to see yet another referendum on the Affordable Care Act during this presidential campaign,” he says.

Meanwhile, Senate Majority Leader Mitch McConnell has said his caucus has not given up on using budget reconciliation to repeal the ACA. Reconciliation would allow repeal with a simple majority rather than the 60 votes typically needed to get legislation through the Senate. But the CBO put an obstacle in the way of those plans when it said that repeal would add $137 billion to the federal deficit over the next 10 years. As Paul Krawzak, a staff writer for CQ Roll Call has reported, the CBO’s budget figures mean the Republicans would have to write repeal legislation, which, unlike the generic repeal bill, would also need to reduce the deficit between 2016 and 2025.

The CBO threw another wrench into the repeal machinery with its projection that repeal would increase the deficit by about 1% of GDP in the next decade after 2025. A Senate rule named for the late Sen. Robert Byrd of West Virginia allows for a procedural challenge to any reconciliation bill that would increase the deficit beyond 10 years.

“That means Republicans have to come up with a repeal bill that not only reduces rather than increases the deficit over the next 10 years, but one that does not produce additional red ink in subsequent years,” Krawzak wrote. Of course, President Obama’s veto pen almost certainly awaits any attempt to derail his signature legislation. Repeal seems a very long shot, at best.

Paul Keckley

Expect continued discussion about the ACA’s employer mandate, says Paul Keckley, who was involved in background negotiations for the law. Should the cutoff be 50 or 100 employees?

Paul Keckley was involved in the background negotiations of the ACA, facilitating dialogue between the White House and health industry trade groups. Now managing director of the lobbying and consulting firm Navigant, he says the cutoff for the Obamacare employer mandate, whether it’s 50 or 100 employees, is ripe for amendment. “Some folks like the U.S. Chamber of Commerce and others are questioning if there should be a mandate at all,” he says. “That’ll be a hot spot for dissension.” Currently, the mandate applies to employers with 50 or more employees. Full implementation of the mandate has been delayed until next year.

Governors, legislatures in the fray

The National Conference of State Legislatures says 38 states and the District of Columbia this year have enacted 178 health care laws. Among the anti-ACA bills that have been introduced include one in Arizona that would prohibit the state insurance department from enforcing the ACA and another in Arkansas that would deny funds to advertise or promote health plans in the state insurance marketplace.

Then there’s the issue of states expanding Medicaid coverage to pick up some of those 35 million who still do not have health insurance. Twenty-one states have yet to sign on to any form of Medicaid expansion. Now that the ACA has weathered legal challenges, and political reality argues against major changes unless a Republican wins the White House next November, will some of those holdouts expand their programs? Jennifer Tolbert, director of state health reform for the Kaiser Family Foundation, isn’t sure. Full federal funding of Medicaid expansion is available through 2016, but beyond that “there is still a great deal of federal funding available to states if they should choose to implement the expansion,” she notes.

Where does this leave state exchanges?

The King v. Burwell decision in favor of premium subsides raises the interesting question whether states that operate their own exchanges might abandon those efforts and depend on the federal government instead.

Christine Eibner

Rand senior economist Christine Eibner questions whether small states like Vermont and Delaware have large enough populations to make state exchanges feasible.

Several states are having trouble maintaining their marketplaces, notes Rand senior economist Christine Eibner. Vermont’s health exchange has had numerous technology problems. New Mexico and Hawaii have turned to the federal exchange to operate the backend technology. Eibner questions whether small states, like Vermont and Delaware, which had been exploring setting up an exchange leading up to the Court ruling, have large enough populations to generate sustaining administrative fees for an exchange.

But state exchanges have some redeeming qualities. “I think its fair to say that the state-based exchanges see themselves as having a greater role in engaging consumers, in coordinating with Medicaid, in being value-based purchasers and really moving the market with creative new products,” says Trish Riley, the executive director of the National Academy for State Health Policy.

Sally Poblete, CEO and founder of Wellthie, a company that provides technology and analytics to health plans, says now insurers and other stakeholders can turn their focus to signing up the millions of uninsured still out there. “Just because the Supreme Court said you can get tax credits doesn’t mean consumers will do so,” Poblete says. “That work is still ahead of us—to help consumers understand it, understand their eligibility for it, understand how to get it, and I think, importantly, when they get coverage how best to use their coverage.”

Next up is the open enrollment period, which begins in November. Insurers have already filed their rates for next year. An Avalere Health survey of insurers in seven states and Washington, D.C., found that the premiums for silver plans are going to increase, on average, by 5.8%. “It’s going to be quite a busy open enrollment,” says Poblete.

Probably much busier than it would have been had King in King v. Burwell prevailed.

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