This case could
bring back medical underwriting, and the Medicare drug plan donut hole.
By Marcia Coyle | March 02, 2020 at
09:46 AM | The original version of this story was
published on The National Law
Journal
The U.S. Supreme
Court on Monday agreed once again to determine the fate of the embattled
Affordable Care Act in the wake of arguments from the Trump administration and
a group of Republican-led states that the entire law should be thrown out.
The justices will
hear arguments in a case brought by a coalition of Democratic-led states.
Those states, along
with the U.S. House, defended the law’s constitutionality in the lower
appellate court against the effort by the administration and the Republican
states to dismantle the law, including such popular provisions as coverage for
individuals with pre-existing conditions.
The court has not
said when it will hear arguments, but most observers say they expect the
court to take up the caase next term.
Texas v. Azar, Texas v. California and
California v. Texas
In the high court,
the Democratic coalition, led by California, is vying to overturn a December
ruling, on Texas et al. v. Azar et al., by the 5th U.S. Circuit Court of
Appeals. A divided panel ruled that the individual mandate to purchase health
insurance — which the Supreme Court upheld in 2012 as a constitutional tax —
was no longer constitutional because Congress in 2017 zeroed out the tax
penalty for failure to have insurance.
The panel decision
largely affirmed a ruling in December 2018 by U.S. District Judge Reed O’Connor
in Texas. But the appellate panel sent back to O’Connor the question of whether
Congress intended other provisions of the law to remain operable. O’Connor had
earlier decided that the mandate was so central to the law that the entire law
must fall.
The high court
petition raises three issues stemming from the 5th Circuit decision: whether
the Republican-led states and individual plaintiffs lacked standing to
challenge the ACA because they had suffered no injury; whether the individual
mandate is constitutional, and whether the mandate can be severed from the rest
of the act.
The U.S. House
filed a separate petition in which House general counsel Douglas Letter told
the justices that the 5th Circuit’s decision is destabilizing the insurance
market and hospitals’ ability to make long-term investments as well as creating
uncertainty about coverage for millions of Americans and small business owners
and employees. Letter is assisted by Munger, Tolles & Olson partner Donald
Verrilli Jr. and Elizabeth Wydra of the Constitutional Accountability Center.
California Deputy
Solicitor General Samuel Siegel represents the Democratic-led states in the
petition California et al. v. Texas et al. (Case Number 19-840). Texas and
other states have filed a separate action, Texas et al. v. California et al.
(Case Number 19-1019). The Supreme Court has now told the parties to
submit subsequent filings through the California v. Texas case.
U.S. Solicitor
General Noel Francisco and Texas solicitor general Kyle Hawkins urged the
justices not to grant review. Francisco said the 5th Circuit did not
“definitively resolve any question of practical significance.” He and Hawkins
argued that the high court should wait for a final decision by the lower courts
on the issue of whether the ACA can operate without the individual mandate.
“This court should
not allow petitioners to leapfrog lower-court consideration based on their own
asserted ‘need for certainty,’” Hawkins wrote.
What Could Go Away
If the entire
Affordable Care Act is unconstitutional, as argued by the Trump
administration’s Justice Department and the Republican coalition, the law’s insurance
coverage would end for an estimated 20 million people, including protection for
people with pre-existing conditions, the Medicaid expansion in many states,
coverage for young persons up to age 26 on their parents’ plans, subsidies for
low-income people and a host of other wide-ranging changes.
If the Supreme
Court finds that all of the ACA is unconstitutional, that ruling could also
have a major effect on many matters unrelated to what members of the general
public typically think of as being “Obamacare.”
One part of the
ACA, for example, is responsible for narrowing the Medicare Part D prescription
drug plan “donut hole,” or the gap between when routine benefits end and
catastrophic benefits begin.
Other
parts shape how the federal government subsidizes the physician training
programs at teaching hospitals, provide funding for programs that train
health care providers who work with the elderly, and govern the reporting of
physician quality information.
Other Cases
The justices have
agreed to decide two other ACA-related issues this term. In December, the court
heard arguments in three consolidated cases contending that the federal
government broke a statutory promise to pay insurers in the first three years
of health benefit exchanges when their costs exceeded the premiums they
collected. Not yet scheduled for arguments are two Pennsylvania cases
concerning the Trump administration’s expansion of the conscience exception to
the contraceptive coverage requirement in the ACA.
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