Legal, Payer Experts Unpack SCOTUS Affordable Care Act Hearing

November 16, 2020 - As the Supreme Court deliberates the fate of the Affordable Care Act after hearing the oral arguments, payers and the public alike are processing the court case and its implications for the healthcare industry.

From the district court to the Supreme court, this case has always centered on three questions:

• Do the plaintiffs have standing?
• Is the Affordable Care Act’s individual mandate unconstitutional?
• If the individual mandate is unconstitutional, is it severable from the rest of the Act or does the rest of the Act become unconstitutional with it?

Although it is impossible to be completely assured of the court’s final decision, legal and payer experts unpacked the court case and reviewed the status of the Affordable Care Act and the potential impacts of particular outcomes.

Legal perspective

Experts, including Tom Barker, a partner at Foley Hoag, expect that the Supreme Court will not release its decision until June 2021, which is the end of the Supreme Court’s term.

“It’s possible it could happen earlier, but I’m not counting on it,” Barker told HealthPayerIntelligence in an emailed interview.

READ MORE: Supreme Court Hears Case on Affordable Care Act Constitutionality

Along with others in the industry who have made cautious predictions around the outcome, Barker projected that the court will side with the Affordable Care Act.

Many of the details of the case were familiar to those who had been following it from the district court through the Fifth Circuit Court of Appeals before it landed in the Supreme Court.

Still, the oral arguments were not entirely as expected.

“What was surprising to me is that it seems like this case will be decided either on standing (i.e. do the states have standing to bring the suit in the first place) or on severability (i.e. that the mandate is unconstitutional but is severable from the remainder of the Act),” Barker commented. “Even the Republican-appointed justices (Roberts, Kavanaugh, Barrett) seemed skeptical that the states even had standing.”

Michael Bagel, director of public policy at the Alliance of Community Health Plans (ACHP), likewise drew confidence about the Affordable Care Act’s survival from the court’s conversation about severability.

READ MORE: ACA Battle Continues, States and Feds File Supreme Court Briefs

“We continue to say that the Affordable Care Act is an all-encompassing law that touches on the healthcare of every American in different parts—whether it be in their Medicare, their commercial, their Medicaid, their individual market—and the individual mandate was one very small component of that,” Bagel told HealthPayerIntelligence.

“So we were encouraged and enthused to hear that there was discussion about the fact that there is a severability between those two areas between the individual mandate and the larger Affordable Care Act.”

Still, Bagel was careful not to be overly confident.

“I'm a lawyer by training and I will tell you that every time you watch the Supreme Court, anyone who tries to make predictions of outcomes based on oral arguments is often more times wrong than right,” Bagel cautioned.

“So while we're encouraged by the discussion, we continue to have a full court press on ensuring that the Supreme Court knows the gravity of the case before it and the implications for the 20-plus million Americans who receive healthcare under the Affordable Care Act.”

Payer perspective

READ MORE: How an Overturned Affordable Care Act Would Impact Payer Industry

Ceci Connolly, president and chief executive officer of ACHP, explained how uncertainty stemming from this court case impacts both payers and members alike.

“When you're running on narrow margins to begin with and then you inject this huge cloud of uncertainty, it is so difficult to do a reasonable job at pricing and developing products for the market and for consumers and employers that are really going to make it,” Connolly told HealthPayerIntelligence.

“You need these health plans to remain not only solvent, but in good financial health themselves, so that when you have something like a pandemic come along, they're in a position to adapt and adjust. You can’t necessarily say when a pandemic is going to hit, but something like this court challenge is the kind of uncertainty that really we shouldn't have to be contending with.”

The potential loss of the Affordable Care Act marketplaces leaves members feeling like they have unstable coverage at a time when the pandemic’s third surge is also rocking the nation.

“To suggest to people at this most vulnerable time when we have so many dying and sick and many for extended periods of time confronting expensive medical bills, to say that their safety net of health coverage—especially the individual exchanges and Medicaid—may evaporate is particularly cruel and frankly foolish as a nation because you want everybody covered in a situation like this, where they are getting tested and they are getting treated,” argued Connolly.

ACHP is not new to this legal fight over the Affordable Care Act.

ACHP submitted an amici curiae brief for the Supreme Court case back in January 2020 and another a year earlier to the Fifth Circuit Court of Appeals. Each brief explained that as an alliance of non-profit health plans embedded in their communities, ACHP was particularly interested in assuring their communities’ access to Affordable Care Act marketplace coverage.

But beyond the legal battle, ACHP has been a proponent for the Affordable Care Act even when it went into effect ten years ago and many payers were wary about joining its marketplaces.

“The law was first and foremost about access to quality coverage and care for all Americans and our members, nonprofit community-based health plans believe very strongly in that it's at the heart of their missions,” Connolly explained.

“And so even if the individual market is not a big book of business for them, it's one of those important puzzle pieces as they put together. When they think about covering and caring for an entire community and entire region and entire state, they want to have that puzzle piece. They want to have the commercial puzzle piece, Medicare Advantage.”

Medicaid expansion and coverage on the individual health insurance marketplaces are filling gaps for populations that do not have many options for healthcare coverage. Beyond the increased access to coverage, health outcomes have improved in Medicaid expansion states in some cases.

Despite her organization’s support for the law, Connolly qualified that the law is not flawless.

“The law did not—and does not—go far enough with respect to affordability,” Connolly acknowledged. “Much of that is because it only has the little baby steps, the little pilots with respect to value-based care. The little pilots were a great idea for starters, but haven't taken off the way we really need value in healthcare to now go ahead.”

The removal or expiration of elements such as risk corridors, which were initially intended to stabilize the individual health insurance market, has set back the law’s progress as well.

Eliminating much of the funding for programs meant to support beneficiary health plan selection, specifically the Navigators program, has crippled the law further. The program helps inform enrollees that they are eligible for subsidies and what kinds of health plans are available to them on the Affordable Care Act marketplaces, but CMS slashed its funds starting in 2019.

Still, Connolly, Bagel, and the ACHP health plans continued to support the Affordable Care Act as it went to the Supreme Court.

“Our deep commitment to the Affordable Care Act means that we're standing ready to partner around how we can build on it and look to the next 10 years of health care and improve the future,” summarized Bagel.

Updated 11/16/2020: This article has been updated to correct an organization's name to the Alliance of Community Health Plans. A previous version cited the organization as the Association for Community Health Plans.