In 2019, coverage gains under the ACA are going strong, but the Trump Administration and other opponents are fighting to oust the health reform law.
The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) continued to be a hot topic in 2019, with disputes surrounding risk corridor payments reaching the Supreme Court. The Fifth Circuit upheld a lower court decision ruling the individual mandate to be unconstitutional, while the Trump Administration attempted to extend conscience-based exemptions to contraceptive coverage requirements. This Strategic Perspective summarizes the top five hot topics related to health reform.
Risk corridors lawsuits reach the Supreme Court
The Supreme Court heard oral arguments in a suit challenging the government’s response to the risk corridor provision of the ACA (see U.S. Supreme Court hears $12 billion ACA argument from insurers, December 10, 2019). The case before the court, Maine Community Health Options v. U.S., was consolidated with Moda Health Plan, Inc. v. U.S. and Land of Lincoln Mutual Health Insurance Company v. U.S.
Under section 1342 of the ACA, in the first three years of operation of the health insurance exchanges, insurers with costs greater than the premiums collected should have received payments from the government to help compensate for their losses. Insurers who collected premiums greater than their costs were required to make payments to the government. HHS, however, failed to make payments to insurers for the risk corridor program (see Supreme Court will hear arguments on risk corridors program payments, lack of funds, June 26, 2019).
The petition for writ of certiorari was filed February 4, 2019. The Supreme Court granted petitions to determine the validity of the suspension of risk corridors program payments to qualified health plan (QHP) issuers under the ACA. The question presented to the Supreme Court was, "Where the federal government has an unambiguous statutory payment obligation, under a program involving reciprocal commitments by the government and a private company participating in the program, does the presumption against retroactivity apply to the interpretation of an appropriations rider that is claimed to have impliedly repealed the government's obligation?"
Oral arguments centered around whether a contract exists between the government and the insurance companies, and the Supreme Court will address whether Congress’ failure to include appropriations for the programs absolved the federal government’s liability from making the payments. A decision by the court is expected by summer 2020 (see U.S. Supreme Court hears $12 billion ACA argument from insurers, December 10, 2019).
Trump Administration fights the ACA in Texas v. U.S.
In 2019, the Fifth Circuit rendered a decision that could put the future of the ACA in jeopardy. A Texas district court in 2018 accepted the argument that the individual mandate penalty—which the Tax Cuts and Jobs Act of 2017 (P.L. 115-97) eliminated—was "essential" to the ACA, rendering the health reform law "untenable" in its absence. The court granted the states’ motion for summary judgment regarding the constitutionality of the ACA, leaving the remainder of the ACA invalid (see Federal judge lets ACA fall, saying Congress sawed off its last leg, December 19, 2018). The Northern District of Texas issued a stay and a partial final judgment, allowing the parties to appeal, and allowing the ACA to remain fully in effect until a final judgment is reached (see Stay granted in Texas case, meaning law will remain in effect while case is appealed, January 11, 2019).
Illinois, along with 19 other states and the District of Columbia, filed a response in Texas v. U.S. in defense of the ACA, arguing that invalidating any part of the ACA would have devastating consequences on the most vulnerable populations, particularly children with preexisting conditions and seniors relying on Medicaid for coverage (see State Attorney Generals argue Congress intended ACA to continue, June 5, 2019). The response also argued that the plaintiffs in Texas v. U.S. do not have standing to challenge the individual mandate, as they are not injured by the provision; the individual mandate is like many other laws adopted by Congress and remaining constitutional; and, even if the individual mandate is unconstitutional, it should be severed from the rest of the ACA.
In the past year, several entities have chimed in in an attempt to influence the Fifth Circuit, including the Department of Justice (DOJ) (see DOJ urges Fifth Circuit to affirm case repealing the ACA, April 3, 2019) and the states of Ohio and Montana (Amicus brief in ACA case urges court to retain preexisting conditions provision, April 10, 2019).
At the end of 2019, the Fifth Circuit upheld the district court decision holding the ACA’s individual mandate to be unconstitutional but remanded the case to determine whether the individual mandate is severable from the ACA without the entire law becoming invalid. The Fifth Circuit agreed with the lower court’s determination that the individual mandate was no longer a constitutional exercise of congressional power. Now that the shared responsibility payment is set at $0, the taxing authority, on which the individual mandate formerly stood, is no longer applicable. The court was also tasked with determining whether the ACA could survive without the individual mandate; however, it found that the lower court failed to "explain with precision" how particular portions of the ACA as it existed post-2017 were dependent on the constitutionality of the individual mandate. The Fifth Circuit instructed the lower court to "employ a finer-toothed comb" on remand into which provisions of the ACA Congress intended to be inseverable from the individual mandate (see ACA individual mandate unconstitutional; remanded for further study of severability, December 19, 2019).
Conscience-based objections to the contraception coverage mandate remain contentious
Early in 2019, in California v. HHS, the Northern District of California issued a preliminary injunction preventing the implementation of HHS final rules allowing conscience-based objections to the preventive care mandate (see Court enjoins 2019 final rules for religious, moral exemptions, January 16, 2019). Massachusetts, Pennsylvania, and New Jersey also gained ground in their challenges to the HHS rule expanding religious exemptions to contraceptive coverage requirements (see Massachusetts challenge to religious, moral exemptions to ACA kicked back to district court, May 29, 2019; States likely to succeed in lawsuit challenging contraceptive exemption regulations, July 17, 2019).
The Trump Administration filed a petition for writ of certiorari in the Supreme Court, seeking review of the Third Circuit’s decision in Commonwealth of Pennsylvania v. Trump. The petition argued that the agencies had statutory authority to expand the exemptions and the final rules in question do not violate the Administrative Procedure Act (see Trump Administration seeks review of 3rd Circuit decision in contraceptive coverage suit, October 9, 2019). The Little Sisters of the Poor Saints Peter and Paul Home (Little Sisters) also filed a petition for writ of certiorari seeking review of the Third Circuit’s decision (see Little Sisters of the Poor seeks high court review of contraception coverage injunction, October 9, 2019).
Sixteen states and 92 members of Congress submitted amicus briefs to the Supreme Court in Commonwealth of Pennsylvania v. Trump in support of the religious exemption, arguing that to deny the exemption is an assault on religious liberty and rights of conscience (see Amicus briefs filed in ACA contraceptive coverage case, response due date extended, November 20, 2019). The brief from members of Congress argued that the Little Sisters’ petition correctly shows that the contraceptive mandate presents a fundamental of religious liberty warranting high court review. The response to the petition was filed December 9, 2019.
Medicaid enrollment steady as states try out work requirements
Overall, Medicaid expansion has led to gains in coverage and improvements to access to care. The Kaiser Family Foundation (KFF) found significant coverage gains and reductions in uninsured rates among the low-income population, both broadly and in specific vulnerable populations (see Studies find gains in coverage, access following Medicaid expansion, August 21, 2019). Expansion states saw large increases in Medicaid enrollment, driven by the enrollment of newly eligible adults.
Despite an overall increase in enrollment since the implementation of Medicaid expansion, the KFF also noted a decline in Medicaid enrollment and slowed spending growth in fiscal year (FY) 2019 (see Medicaid spending projected to increase in FY 2020 despite flat enrollment, October 23, 2019). FY 2020 will bring flat enrollment, but total spending growth is projected to return to more typical levels. KFF attributes the projected growth in spending to increased prescription drug costs, climbing provider rates, and higher spending on aging and disabled beneficiaries.
After the Trump Administration showed support for Medicaid work requirements in early 2018, states attempted to implement community engagement provisions. These provisions generally required adults to complete a certain number of hours of employment or other qualifying activities, such as job searching, in order to qualify for Medicaid. Federal courts have been hesitant to accept the change in policy, with courts in states such as Arkansas, Kentucky, New Hampshire, and the District of Columbia striking down work requirements. These questions might ultimately land before the Supreme Court (see Medicaid work requirements—‘a solution in search of a problem’, August 14, 2019).
Marketplace enrollment remains strong, with issuer choice growing
Despite small drops in enrollment, use of the health insurance exchanges remained strong in 2019, according to CMS (see 2019 enrollment steady for ACA exchanges, March 27, 2019). For open enrollment 2019, 11.4 million consumers enrolled in an exchange plan; 87 percent of those enrollees received tax credits to cover a large portion of their premium costs. Enrollment in unsubsidized health insurance has continued to decline (see Unsubsidized health insurance market enrollment declines significantly, August 14, 2019).
CMS stated that it continues to make improvements to the health insurance marketplace, and numbers are showing an increase in QHP issuers, as well as decreases in premiums (see 2020 brings increased choice, competition in health insurance marketplace, October 30, 2019). CMS noted a 20 percent increase in QHP issuers between 2019 and 2020—from 132 to 175 issuers.
Looking forward to 2020
2020 will prove to be an important year for ACA-related litigation. In the coming year, watch out for Supreme Court decisions regarding risk corridor payments and continuing litigation in the High Court surrounding conscience-based exemptions from contraceptive coverage requirements. Also expect continued litigation on the constitutionality of the ACA, focusing on the severability of the individual mandate from the law as a whole.
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