NC residents could lose big if Supreme Court strikes down the Affordable Care Act
Last March, we celebrated the 10-year anniversary of the Affordable Care Act (ACA). The ACA expanded health insurance coverage to approximately 20 million people across the country, guaranteed coverage to people with pre-existing conditions, and expanded mental health and substance abuse services to millions of other Americans. Yet despite its many accomplishments, this could also be year when the ACA is struck down by the US Supreme Court.
The ACA has been highly contentious, with lawsuits challenging multiple provisions of the law. The first case that reached the Supreme Court – National Federation of Independent Business v. Sebelius – challenged the constitutionality of the “individual mandate,” the requirement that people purchase health insurance or pay a tax penalty (among other provisions). Congress included the individual mandate to ensure that enough healthy people would sign up for coverage to help offset the costs of providing care to people with preexisting health problems. Without it, people would wait until they were sick to enroll in insurance, which would make health insurance unaffordable. In a 5-to-4 decision, the Supreme Court upheld the individual mandate as a constitutional exercise of Congress’ taxing authority.
Although President Trump’s efforts to repeal major sections of the ACA failed, Congress did zero out the tax penalty as part of the Tax Cut and Jobs Act of 2017. Eighteen state attorneys general, led by the state of Texas and two individual plaintiffs, sued, arguing that the individual mandate is no longer constitutional if the tax penalty is zero and that the entire law must then be overturned.
When the Trump administration took the highly unusual position of declining to defend the lawsuit, California’s attorney general intervened to defend the law, along with attorneys general from 20 other states, including North Carolina. This lawsuit, Texas v California, will be argued in the U.S. Supreme Court on Nov. 10. The central issue is whether the individual mandate is still constitutional without a tax penalty. Further, if the court determines that the individual mandate is not constitutional, then it must decide whether that provision be “severed” from the rest of the law. If not, will the court strike just other provisions tied to the law, such as protections for people with pre-existing conditions, or overturn the whole law?
Many think that the Supreme Court is more likely to throw out the individual mandate if Judge Amy Coney Barrett joins the court. Judge Barrett has been critical of the Supreme Court’s finding that the individual mandate was constitutional. However, it is less clear where Judge Barrett stands on severing the individual mandate from the rest of the law or from protections for individuals with pre-existing conditions.
The outcome of this case will affect all North Carolinians. For some the consequences will the devastating. Those who have lost jobs and insurance due to COVID-19 will struggle to find and afford comprehensive health insurance. Approximately 450,000 who purchase insurance through the ACA marketplace will lose the subsidies that helped them afford coverage. Young adults under 26 will no longer have coverage under their parents plans and many of the more than 1.7 million North Carolinians with pre-existing conditions could be denied coverage once again. Seniors with Medicare would see a return to the donut hole in coverage and higher costs for their prescription drugs. And, even those of us with employee health plans would feel the loss. The ACA requires employer plans to cover preventive services and immunizations at no cost and limits annual out of pocket spending.
As we face COVID 19 and unprecedented unemployment, we simply cannot afford to jeopardize access to health care for North Carolinians.