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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$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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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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