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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Shop ’til you Drop

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You’ve heard of healthcare.gov, right? I’m sure you know it crashed or was incredibly sluggish during its first week of operation. Or that there was some controversy over the company contracted to build the site. But did you know that healthcare.gov is the home of the ACA’s Exchanges, also known as the health insurance Marketplace?

The Marketplaces were set up by the ACA to create organized, competitive markets for purchasing health insurance. Prior to the creation of the Marketplace, individuals needing health insurance would have to contact insurance companies directly and would receive limited transparency on cost and benefits.

In contrast, the Marketplace allows individuals, families, and small businesses to: (1) compare health insurance plans for benefits and cost; (2) determine eligibility for tax credits for private coverage or Medicaid/CHIP; and (3) enroll in a health insurance plan. Some states have chosen to operate their own Marketplace (CA, CO, CT, DC, ID, MD, MA, MN, MS, NM, NY, RI, UT, VT, WA). In all remaining states and territories, the federal government facilitates the Marketplace.With limited exceptions, enrollment in a Marketplace plan is only possible during an Open Enrollment period. Outside of the Open Enrollment period, individuals and families are only able to choose a health plan on the Marketplace if they have a special circumstance, such as moving or losing coverage due to a change in employment. After the first Open Enrollment period in 2014, 8.0 million people signed up for coverage using the Marketplace.

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Seeking No-Cost Preventive Care? No Problem.

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Research has shown that higher rates of use of preventive services can have a significant impact on individual health and the cost of health care. However, the cost of these services was a barrier for many insured and uninsured individuals. In response to this concern, one key provision of the ACA requires private insurance plans to cover preventive health care services without cost-sharing (copayments, coinsurance, or deductible) for patients. This requirement, established under Section 2713 of the ACA, applies to all private plans in the individual, small group, and large group markets, as well as self-insured plans that contract out to third party payers. [Plans with a “grandfathered” status–a plan in existence before March 23, 2010 that cannot make significant changes to coverage–were exempt].

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What is the Employer “Mandate”

In 2016, a majority of Americans (49%) received health coverage through an employer, either as an employee or a dependent of an employee.  [How did employer-sponsored health insurance become so widespread in the U.S.? Check out this article for a brief history starting with the creation of Blue Cross in 1929].

While the ACA mandates that individuals have health insurance (which has been made a tad more complicated by the recent tax bill passed by Congress), it does not require employers to provide health benefits to their workers. However, the Employer Shared Responsibility Provision of the ACA stipulates that certain businesses called Applicable Large Employers (or ALE’s) must offer affordable, minimum value coverage or face a financial penalty. That regulatory mumbo-jumbo essentially adds up to a mandate for businesses with more than 50 full-time employees to offer health coverage.

This flowchart should answer any lingering questions about employer responsibilities in terms of health coverage.

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Source: Kaiser Family Foundation