Will the ACA Survive the Scales of Justice Yet Again?

In late December, the U.S. Court of Appeals for the 5th Circuit struck down the individual mandate of the Affordable Care Act but ducked the central question – is the rest of the ACA valid after Congress zeroed out the tax penalty for not having health insurance?

The case was sent back to the lower court to reconsider how much of it survives; the lower court judge previously ruled the entire law unconstitutional. This move reduces the likelihood of the Supreme Court considering the case before the 2020 election, but the Democratic-led states defending the law might appeal directly to SCOTUS.

The case was brought by 18 Republican-led states and the ACA has been defended mainly by a coalition of Democratic attorneys general, as the Administration refuses to defend the law.

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California Adopts Statewide Insurance Subsidies

Not only are the views of the California coast spectacular, but now they come with the bonus of a buffer to the rising cost of health insurance.

California will be the first state to offer state-funded tax credits for insurance purchased through Covered California, the state insurance Marketplace. The federal government offers credits as well, but many people fall into a coverage gap due to earning too much for Medicaid and the federal credit but too little to afford insurance on their own. The California credits will be paid for in part by a new tax penalty on Californians who do not have health insurance.

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$12 Billion in Risk Corridor Payments at Risk

On December 10, 2019, the Supreme Court heard oral arguments concerning $12 billion that insurers say they are owed by the federal government as part of the risk corridor program.

The risk corridor program was one of the ACA’s three premiums stabilization programs (along with risk adjustment and reinsurance). The temporary risk corridors program was designed to run from 2014 to 2016 and meant to encourage risk-averse insurers to participate in the ACA marketplaces.

Here’s how the program was set up: If a plan’s costs were lower than it’s premiums, the plan would pay a share of it’s profits to the Department of Health and Human Services (HHS). If the plan’s costs exceeded premiums received, the plan would receive a payment from HHS for it’s excess costs. Insurers entered the marketplace under the assumption these risk corridor payments would be made to cushion extreme gains and losses.

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The ACA Goes to Court Again (and again, and again…)

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I’ve been enjoying a few days at my parents house after an exam and it’s given me a chance to catch up on the nitty gritty health policy news of the past few months. And hoo boy, is there a lot going on. Congress might be in recess until after the election, but that doesn’t mean things are slowing down in the health policy arena!

Today we’re taking a look at two lawsuits that could have an immense impact on the future of the ACA. The Texas v. Azar lawsuit, which was filed in February 2018 by Texas and 19 other states, builds on the repeal of the individual mandate tax penalty by the Tax Cuts and Jobs Act of 2017. The lawsuit argues that because this tax penalty was reduced to $0 in 2019 by the 2017 tax legislation, the individual mandate will become unconstitutional. Since the ACA is dependent on the mandate, the lawsuit calls for the ACA to be invalidated by the court. After the U.S. Justice Department declined to defend the ACA in this lawsuit, Democratic state attorneys general from 16 states and D.C. were allowed to intervene on behalf of the law.

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Legal Timeline of the ACA

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On March 23, 2010, the ACA was enacted into law and quickly plunged into seemingly never-ending, ever-evolving litigation. If you’ve found our site, you’re most likely not a lawyer, which makes it a bit more challenging to understand how we’ve gotten to this point in health law as it regards the ACA. 

Two key points that every individual should know: (1) the requirement that every state expand Medicaid was deemed unconstitutional however, the U.S. Supreme Court (SCOTUS) ruled that states could opt-in to the expansion [34 states including D.C. have expanded Medicaid]; and (2) the individual mandate is constitutional and still the law of the land [the Tax Cuts and Jobs Act repeals the financial penalty for not having insurance, but does not repeal the language of the mandate].

Below are some of the big milestones in the ACA’s legal history.

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The Marketplace Olympics

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 Choosing a plan on the Marketplace is like the Olympics. After completing the Herculean task of actually selecting the best plan, you get rewarded with a medal. Or in this case, metal. Bronze. Silver. Gold. Plus an additional metal, platinum! All plans offered on the Marketplace must meet the Essential Health Benefits (EHB) standards created by the ACA.

The metal level refers to the amount of health care costs covered by the plan, called the actuarial value (AV).The ACA specifies that plans offered on the Marketplace must be at one of four levels of actuarial value: 60% (bronze), 70% (silver), 80% (gold), 90% (platinum). For example, a silver plan has an actuarial value of 70%, which means that the plan will pay 70% of the of the health care expenses, while enrollees will pay the remaining 30% through a combination of deductibles, copays, and coinsurance. The ACA also requires that plans have a cap on out-of-pocket expenses for enrollees. The current limits are $7,350 for an individual plan and $14,700 for a family plan. These out-of-pocket maximums are adjusted annually based on premium increases. Bronze plans typically have lower monthly premiums and higher out-of-pocket costs when an enrollee seeks care. In contrast, platinum plans typically have the highest monthly premiums and lowest out-of-pocket costs.

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The Affordable Care Act Essentials

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President Obama signs the ACA into law

On March 23, 2010, President Obama signed the Affordable Care Act (ACA) into law. The ACA represents the most significant expansion of health coverage and regulatory overhaul since the creation of Medicare and Medicaid in 1965. At nearly 2,000 pages, the ACA touches nearly every corner of the U.S. health care system to reduce the rate of uninsured individuals and improve access to affordable, quality health care.

Oh, one more thing before highlight the most impactful provisions of the bill. The ACA is the same thing as Obamacare. They are not two separate legislative efforts that overhauled health care. We promise. Tell your parents, friends, and patients. [Watch this Jimmy Kimmel clip if you need to be reminded that people still don’t know the ACA and Obamacare are synonymous]. Ok, let’s get into it.

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