The Biggest ACA Legal Challenges Facing Healthcare Industry

May 11, 2016 - Ever since the Obama administration passed the healthcare law to reform many of the inequalities faced in this country, there have been a wide variety of ACA legal challenges that have stood in the way of this law progressing to reduce the rates of uninsured citizens. The Supreme Court ruling mandating that Medicaid expansion become a voluntary process, for instance, has led to fewer states expanding the program and coverage for low-income individuals and families.

Some other ACA legal challenges include the King v. Burwell case, the employer mandate objections, and the recent attempt to repeal the majority of the Affordable Care Act.

Are tax subsidies offered on exchanges legal?

In the King v. Burwell case, the opposition debated whether the tax subsidies offered on the health insurance exchanges to low-income individuals were Constitutional. If the court had gone forward with eliminating these subsidies, consumers from 36 states would be negatively affected and would, once again, lack medical coverage.

The problem argued in the case was whether people who signed up for coverage through a state-based health insurance exchange were eligible for these tax subsidies. In 2012, IRS set up these subsidies to be offered through the federal and the state-based health insurance exchanges, but the King v. Burwell case questioned whether Congress had allowed these subsidies to be offered through state exchanges.

Last summer, the Supreme Court ruled in favor of upholding the subsidies and let this Affordable Care Act provision stand. Nonetheless, other ACA legal challenges were still facing the healthcare law.

Some stakeholders object the employer mandate

In December 2015, the Association of American Physicians and Surgeons (AAPS) submitted an amicus brief to the Supreme Court arguing against the constitutionality of the employer insurance mandate within the Affordable Care Act.

The Stephen F. Hotze, M.D., and Braidwood Management v. Sylvia Mathews Burwell and Jacob J. Lew case argued that the employer mandate goes in stark contrast to the Origination Clause of the Constitution. This particular clause requires the House of Representatives to pass all revenue-raising bill. The employer insurance mandate did not go through the House of Representatives.

This mandate requires all employers with more than 50 employees lacking affordable healthcare coverage to receive a penalty tax if even one employee moves outside of the company to receive a subsidy and purchase a health plan through the exchanges.

“Our stance is that we are opposed to the federal government making insurance mandates on anybody,” AAPS Executive Director Jane Orient, M.D., told HealthPayerIntelligence.com. “What it does is it forces people to buy policies that they otherwise wouldn’t buy.”

“In case of the plaintiffs in this case, they were forced to drop the insurance that they had and liked – which violated Obama’s promise that if you like your insurance, you can keep your insurance – and they had a very limited choice of other plans that were much higher in premium cost and did not have the benefits that they wanted but had benefits that they didn’t want.”

“It was a choice between either buying this insurance that you didn’t want – in many cases, it does not include the hospitals or physicians that you liked – or pay $100 per day per employee to the federal government and get nothing in return for it.”

Budget Reconciliation bill made headway

In December 2015, the Senate and the House of Representatives voted in favor of the Budget Reconciliation bill, which would have essentially stripped away major portions of the Affordable Care Act. This was among the biggest ACA legal challenges facing the Obama administration since passage of the law.

However, President Barack Obama was able to veto the legislation and keep the law intact. The proposed bill looked to remove Medicaid expansion that had already taken place in 30 states, subsidies offered on the exchanges to low-income families, and a general breakdown of the federal government’s ability to operate the health insurance exchange.

“It is a deeply disappointing signal for 2016 that House leaders chose to prioritize the reconciliation bill so early in the new year, and that the House passed it today. The reconciliation bill would gut the ACA, which is the greatest advance for women’s health in a generation, and defund Planned Parenthood, which provides high-quality health care women urgently need,” Debra L. Ness, President of the National Partnership for Women & Families, said in a public statement.

“If it were to become law, this bill would cause real and lasting harm to women’s health. The country is much better off because President Obama will veto it."

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