Eakinomics: The
Future of the ACA (Again)
An opening on the Supreme Court in advance of it hearing arguments in Texas v. U.S. has
raised once more the possibility that the Affordable Care Act (ACA) may be
stricken down in whole or in part. Recall that, in the original challenge to
the ACA, the Supreme Court ruled that the individual mandate was
constitutional because it was a tax (on those who did not buy insurance), and
Congress has the constitutional authority to levy taxes. Yet Congress
subsequently got rid of the tax-based penalty while retaining the requirement
that individuals buy health insurance.
The latest case argues that since the penalty has been repealed, there is no
tax and, as a result, the individual mandate is unconstitutional. Moreover,
the plaintiffs also argue that the mandate provision is not “severable” and
the entire ACA needs to be overturned. With the passing of Ruth Bader
Ginsburg, there is increased concern that a conservative appointment to the
Supreme Court will result in exactly this outcome. For example, hospital and
insurer stocks were down sharply yesterday in reaction to the events.
Perhaps the law could fall, but there are a lot of possibilities in
addition to a full repeal of the ACA. The Court could decide that only
parts of the ACA should be overturned. For example, if the
requirement to purchase insurance is repealed, the other provisions supporting
that requirement – essential health benefits, community rating, guaranteed
issue, etc. – could be overturned as well. Or, the Supreme Court could decide
before another judge was seated, end up in a tie, and kick the decision on
severability back to the lower courts. Alternatively, the Supreme Court could
uphold the entire ACA.
There are others better suited to recap the horse race on a likely nominee,
likely confirmation and timing, and probabilities of various Supreme Court
rulings. The important observation from a policy perspective is that voters
have come to like the ACA. During Obama's tenure as president,
polling consistently found that individual provisions of the ACA were popular
and had bipartisan support, while the law in its entirety was only as popular
as then-president Obama. Now, both Mr. Obama and the ACA are overall favored
by voters of all stripes. If any of the various scenarios leading to striking
down more than the mandate comes to pass, Congress and the president need to
be ready to quickly provide replacement legislation.
From a conservative’s point of view, that means retaining control of the
Senate is more important than the Supreme Court appointee. If Democrats
control Congress (and, thus, likely the White House), either the ACA stands
or it is replaced with the ACA on steroids. Only if Republicans retain
control of the Senate and legislation is needed will they be in a
position to affect the outcomes.
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