- Posted by Jessica Waltman
- On April 12, 2019
The Patient Protection and Affordable Care Act (ACA) came back into the political spotlight earlier this month after the Trump Administration filed a two-sentence letter in the case of Texas v. The United States, advocating for the federal judiciary branch to invalidate the ACA completely, and House Democrats unveiled new legislation to strengthen and expand upon critical portions of the law. While both of these actions are dramatic and have generated much media buzz, neither one has an immediate impact. To help you explain either one to employees or anyone else you know with questions, Kistler Tiffany Benefits has broken them down for you.
ACA Challenge Case
The premise of Texas v. The United States concerns the ACA’s individual mandate. The Attorneys General from 21 states, led by Texas, argue that since Congress reduced the mandate’s tax penalty for noncompliance to $0, it is unconstitutional and all 10 titles of the ACA should be dissolved. Usually, the federal government would defend the ACA in a case like this, but the Trump Administration elected not to do so last year, so the federal courts let a group of Democratic state Attorneys General led by California and the House Democratic leadership take over. Even though the Trump Administration is not officially a party in this case anymore, as the entity responsible for enforcing the law, they can weigh in with the courts too.
In December of 2018, a federal judge in the first round of the legal challenge agreed with Texas that the whole ACA should fall, but the court also ruled that the law should stay in place during the appeals process. Now round two of the legal challenge – an appeal to the U.S. 5th Circuit Court of Appeals – is starting, and the Trump Administration’s letter is a step in that process. The letter is a reversal of their earlier, middle ground position, that the court should just strike the individual mandate and related guarantee issue protections but leave the rest of the law in place.
What This Means:
Presently, there is no one officially arguing a compromise position with the federal courts in this case (although anyone can file an amicus, or friend of the court, brief with the Appellate Court arguing a different position, and many entities already have). The Trump Administration plans to align its legal arguments with Texas et. al., and state the ACA should fall. The House Democrats and the Attorneys General from the Democratic states (including Delaware, New Jersey, and New York) will keep arguing the whole ACA should stay in place.
The ACA is back in the spotlight, and every political analyst out there has an opinion about whether changing positions will hurt President Trump politically.
The legal process takes a long time, and it will be months before the 5th Circuit Court makes a decision in the case. Then, in all likelihood, the United States Supreme Court will weigh in, probably in 2020.
The next deadline in the case is May 1, 2019 when briefs are due from all sides. So in all likelihood there will be another round of media buzz in early May, when the Trump Administration and other actors fully detail their legal arguments for this next round of the case.
What It Doesn’t Mean:
That anything is happening to the ACA or preexisting condition protections right now.
That the federal judiciary branch couldn’t still elect to take a compromise position if they think that is what is constitutional.
ACA Bill Introduced by the House Democrats
In a coincidental, but well-timed move, House Democratic leaders introduced the Protecting Preexisting Conditions and Making Health Care More Affordable Care Act of 2019 the day after the Justice Department sent its ACA letter to the 5th Circuit Court. This bill, which is unlikely to be approved by the Senate or signed by President Trump, does present some of the House Democrat’s central ideas about improving the ACA, including:
- Expanding eligibility for premium tax credits beyond 400 percent of the federal poverty line (FPL) and increasing subsidy amounts.
- Eliminating the “family glitch” by hinging access to subsidized coverage on the affordability of family coverage, rather than self-only coverage.
- Rescinding the recent regulations on association health plans and short-term limited duration coverage and the new Trump Administration guidance on Section 1332 waivers.
- Requiring plans to cover all essential health benefits, prohibiting substitution of benefits across benefit categories, and ensuring broad coverage of prescription drugs.
- Requiring HHS to operate and fund the exchange navigator program with $100 million a year and to conduct marketing and outreach for the federal exchange and funds these activities at $100 million per year.
- Establishing a state-based reinsurance program that would allow states to set up their own reinsurance programs, or to use the funds to provide premium subsidies or cost-sharing support. It also creates a federal default reinsurance program for states that do not opt to run their own reinsurance program.
- Providing $100 million in Consumer Assistance Program grants for states and $200 million a year from 2020 through 2022 in funding for states to conduct feasibility studies, pilot programs, technology upgrades, and other efforts to encourage enrollment in the individual and small group markets.
What This Means:
The House Democrats will spend time this year talking about their detailed plan to strengthen the ACA, including having hearings on this bill and several other related bills that cover just individual sections of this measure.
This bill may take some attention from the Medicare For All push being championed by some congressional Democrats and presidential candidates.
The GOP will face continued pressure to come up with a comprehensive bill to replace or change the ACA.
What It Doesn’t Mean:
That this bill, or anything like it, will become law any time soon.
It will take at least another year, and possibly longer, for Texas v. United States to work through the federal judicial system. It is also possible that action by the 116th Congress could impact both the ACA as it stands now and the trajectory of the case. Kistler Tiffany Benefits watches both the courts and Congress closely to support and inform our clients. We remain committed to providing you with exceptional service and timely information about any judicial or legislative developments that could impact you or your company’s benefit plan.