Friday, 27 Nov 2020

The Affordable Care Act Faces Another Supreme Court Test

WASHINGTON — Eight years ago, the Affordable Care Act barely survived its first encounter with the Supreme Court. On Tuesday, a significantly more conservative court will hear arguments in a case brought by Republican state officials, backed by the Trump administration, seeking to destroy it.

At stake are health insurance for millions of people, protections for pre-existing conditions for millions more and the fate of President Barack Obama’s signature domestic achievement, a law that has become woven into the fabric of the health care system in ways big and small.

On the surface, events since the first decision would seem to place the health care law in real peril. Not only is the federal government itself now arguing for striking it down, but President Trump, who has criticized Chief Justice John G. Roberts Jr.’s decisive vote to save the law and pledged that his judicial nominees would instead “do the right thing,” has named three justices to the court. The newest one, Justice Amy Coney Barrett, has written critically of the chief justice’s reasoning in the 2012 case.

But there are reasons to think the law, or at least most of it, may survive.

To win, the Republican challengers would have to run the table on three separate legal arguments. And they would have to persuade the justices that the law, which is popular and whose unraveling could cause chaos in the health care system, should be wiped out based on a highly formalistic argument. During a pandemic.

Striking down the law would increase the ranks of the uninsured in America by more than 20 million people — a nearly 70 percent increase — according to new estimates from the Urban Institute.

The biggest loss of coverage would be among low-income adults who became eligible for Medicaid under the law after all but a dozen states expanded the program to include them. But millions would also lose private insurance, including young adults whom the law allowed to stay on their parents’ plans until they turned 26 and families whose income was modest enough to qualify for subsidies under the law that help pay their monthly premiums.

Gone, too, would be the law’s famous protections for Americans with past or current health problems — pre-existing conditions — which forbid insurers to deny them coverage or charge them more for it. This is the most popular part of the law since it applies to so many millions of people; Mr. Trump had promised he would preserve the protections if the law was struck down, but he never explained how.

Health insurers have urged the court to save the law. “Make no mistake: Invalidation of the A.C.A. would wreak havoc on the entire health care system,” a trade association, America’s Health Insurance Plans, wrote in a supporting brief in the new case, California v. Texas, No. 19-840.

The case is in a sense a sequel to the one from 2012. Back then, the court upheld the law’s requirement that most Americans obtain insurance or pay a penalty — the “individual mandate” — saying it was authorized by Congress’s power to assess taxes. The vote was 5 to 4, with Chief Justice Roberts writing the controlling opinion, which was joined in its key section by the court’s four-member liberal wing.

In 2017, after repeated Republican attempts to repeal the law failed, Congress made a seemingly minor adjustment: It set the penalty for failing to obtain insurance at zero. The new challenge starts with the argument that this made the individual mandate unconstitutional because it could no longer be considered a tax.

By itself, survival of the now toothless mandate is inconsequential. But the challengers go on to argue that removing the mandate means the entire law must fall. In legal terms, they argue that the mandate cannot be severed from the rest of the law.

This is where the challengers have an uphill fight.

At Justice Barrett’s confirmation hearings last month, Democratic senators spent more time discussing the Affordable Care Act than any other subject. They stressed the health law’s popular provisions — like guaranteed coverage for pre-existing conditions, emergency care, prescription drugs and maternity care.

The nominee, who was not particularly forthcoming in answering other questions, suggested that she was receptive to the argument that the mandate could be severed from the balance of the law.

Recent Supreme Court decisions support that view.

In June, the court ruled that a provision of the law creating the Consumer Financial Protection Bureau was unconstitutional. But Chief Justice Roberts said the rest of the law could stand. “We think it clear that Congress would prefer that we use a scalpel rather than a bulldozer in curing the constitutional defect we identify today,” he wrote.

The next month, in a case on a federal law regulating robocalls, Justice Brett M. Kavanaugh made a similar point. “Constitutional litigation is not a game of gotcha against Congress, where litigants can ride a discrete constitutional flaw in a statute to take down the whole, otherwise constitutional statute,” he wrote.

When the earlier challenge to the health care law was argued in 2012, the Obama administration did say that the mandate could not be severed from two related provisions, one prohibiting insurers from turning away applicants and the other barring them from taking account of pre-existing conditions.

At the time, many health economists believed the law’s success would depend on its “three-legged stool” approach: preventing insurers from denying coverage based on pre-existing conditions, requiring everyone to buy insurance and providing subsidies to make it affordable. If there were no penalty prodding everyone to obtain insurance, the thinking went, many younger and healthier people would forgo it, leaving only older and sicker people in the insurance pool. That, in turn, would force insurers to raise rates, leading more people to drop their coverage in a self-reinforcing cycle.

But in fact, after Congress zeroed out the law’s financial penalty for going without health insurance in 2017, it turned out that removing one of the legs had little effect on how many people signed up for coverage through the law’s marketplaces. Enrollment in the marketplaces has decreased slightly since 2017, but it has not shown any signs of a “death spiral,” when only sick people buy coverage and the cost skyrockets as a result.

In a friend-of-the-court brief defending the law, scores of economists concluded that “economic data demonstrate that the A.C.A. remains fully effective and operational even in the absence of the individual mandate.”

In addition to the arguments on the constitutionality of the mandate and whether it can be severed from the rest of the law, the challengers must also show that they have suffered the sort of injury that gives them standing to sue. It is not clear that the states and the two individuals who brought the suit can satisfy that burden.

A mandate without a penalty, supporters of the law say, does not affect state budgets or harm individuals, who now face no financial consequence for going uninsured.

Lower courts have so far sided with challengers. A federal judge in Texas ruled that the entire law was invalid, but he postponed the effects of his ruling until the case could be appealed. In December, the United States Court of Appeals for the Fifth Circuit, in New Orleans, agreed that the mandate was unconstitutional but declined to rule on the fate of the remainder of the health law, asking the lower court to reconsider the question in more detail.

If the Supreme Court strikes down the entire law, political responses remain possible. If Democrats manage to take control of the Senate along with the House, they could enact a simple legislative fix that would make the case moot. They could bring back a nominal penalty, even of $1. Or they could repeal the individual mandate entirely, deflating the plaintiffs’ argument.

In a divided Congress, such moves seem unlikely. While the law remains very popular among independent voters as well as Democrats, and even most Republican voters support its pre-existing condition protections, Republicans overall still want to see the law overturned, and it is hard — though not impossible, given the stakes — to imagine Senator Mitch McConnell of Kentucky, the majority leader, agreeing to a fix.

Tuesday’s arguments, which will be heard by telephone, are scheduled for 80 minutes but are likely to last two hours or longer. Michael J. Mongan, the solicitor general of California, representing a coalition of blue states, will defend the law; Kyle D. Hawkins, the solicitor general of Texas, representing a coalition of red states, will urge the justices to strike it down.

Two other lawyers will also appear: Jeffrey B. Wall, the acting U.S. solicitor general, will argue for the Trump administration in support of Texas. And Donald B. Verrilli Jr., who successfully defended the law in 2012 as solicitor general in the Obama administration, will argue for the House in support of California.

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