Focus on Standing Signals Supreme Court Won't Nix ACA

by Leslie Small

Although a constitutional challenge to the Affordable Care Act (ACA) has been winding its way through the court system for more than two years, the Supreme Court during a Nov. 10 hearing appeared highly skeptical that the case has much merit.

The suit California v. Texas was first brought by a Texas-led coalition of conservative states in 2018. It argues that the ACA's individual mandate — which compels people to purchase health insurance — is unconstitutional because Congress removed the mandate's tax penalty via a budget bill in 2017. And if that mandate is unconstitutional, the suit claims, so is the rest of the law.

In interviews with AIS Health following the Nov. 10 oral arguments, experts say they were intrigued to find that a significant portion of justices' questions centered on whether the Texas-led coalition of states even had the right to bring its lawsuit — a legal question known as standing.

Joel Ario, managing director of Manatt Health, points out that justices seemed to favor the term "inoperative provision" when describing the mandate — meaning they were skeptical that states could be harmed by a requirement that carried no penalty for noncompliance.

"I think ultimately, given the tenor of the questions, they will find [that the states have] standing, but the bulk of the argument was discussing the standing issue," says Bill Jordan, a partner and co-leader of Alston & Bird’s Health Care Litigation Group. "So we've been describing it to clients as, 'expect the decision to kind of be a nothingburger. The Affordable Care Act will survive and we'll go on.'"

Even if the court rules that the states have standing to sue and agrees that the individual mandate is unconstitutional, both Ario and Jordan say they expect the rest of the ACA to remain intact, citing the fact that right-leaning Justice Brett Kavanaugh and Chief Justice John Roberts expressed skepticism about the mandate being inseverable from the rest of the law.

Citi analyst Ralph Giacobbe noted that health care stocks rose following the hearing, an unsurprising outcome since "this case would clear a big hurdle in being the 'last' overhang for the sector among recent headlines/fears." Still, "we acknowledge that oral arguments are not a perfect indicator of how the justices may eventually rule," Giacobbe added.

From Health Plan Weekly