Even if you only follow on the fringes of healthcare reform, the inception of the ACA in 2010 may have shed light on the lack of bipartisan effort surrounding reform policies. Regardless of which side of the political spectrum you sit, the ACA (Patient Protection and Affordable Care Act) is widely regarded as the most impactful healthcare policy since the rollout of Medicare & Medicaid by President Lyndon B. Johnson in 1965. Irrespective of the clout this policy holds in the eyes of leaders within our domestic healthcare system, it has not operated within its short eight-year tenure without controversy.
The debate surrounding the longevity of this policy continued last Thursday (June 7, 2018) in unprecedented manner as the Justice Department filed a briefing recommending that the U.S. District Court of Texas (Fort Worth Division) rule the insurance reform provisions of the ACA unconstitutional.
How We Got Here
To understand the severity of the proposed lawsuit, we must briefly glance at NFIB v. Sebelius, a previous legal decision surrounding the ACA which cleared a path for the above briefing to be filed.
In 2012, a group of 13 states, a pair of individual plaintiffs, and the National Federation of Independent Businesses filed a motion (in the District court of Northern Florida) that the ACA was unconstitutional. According to Supreme Court multimedia archive Oyez, “The plaintiffs argued that: (1) the individual mandate exceeded Congress' enumerated powers under the Commerce Clause; (2) the Medicaid expansions were unconstitutionally coercive; and (3) the employer mandate impermissibly interfered with state sovereignty.“ The conclusion of the suit resulted in the Supreme Court backing the ACA under the precedence that the individual mandate “is an appropriate use of Congress’ power under the taxing Clause and is, therefore, constitutional” according to a case brief for NFIB v. Sebelius.
The important take away from this dispute is that the ACA was backed by Congress under the idea that the individual mandate was a tax and that it was “severable” from other provisions included in the ACA. This means that the judgement of one mandate within the ACA can be siloed and will not affect the policy as a whole.
The Filing at a Glance
On Dec. 22, 2017, the individual mandate was repealed as a part of the Tax Cuts and Jobs Act of 2017 written in by President Trump and his administration. In ordinance with the repeal, many right-wing-leaning states have proposed the idea that an individual mandate (as of today, the requirement to have qualifying medical insurance still exists) without a penalty to do so (previously written in as a tax) is unconstitutional. The process of proving unconstitutionality within the ACA is based on “inseverability.” In short, if one mandate within the ACA is unconstitutional, the entire ACA is then unconstitutional and should be eradicated.
Now as defined above, the unique nature of this case is that the Department of Justice not only supports this idea but is urging the District Supreme Court to render the ACA invalid without reference to the previously approved filing of severability in 2012. The inconsistencies in the law from 2012 to current are unnerving to many analysts following this case. The provisions have been approved by Congress and signed into federal law and are not meant to be easily challenged or rehashed within a legal setting with such overarching consequences. In 2016, the domestic healthcare system within the U.S. reached $3.3 trillion dollars annually and accounted for 17.9 percent of the Gross Domestic Product. The security of such would be woefully undefined if the ACA (and mandates within it) were to be diminished without proper recourse or without a proper replacement.
Impacts of a Successful Repeal
The major concerns surrounding the impending decision are ones that largely propelled the positive social opinion of the ACA. Namely, the pre-existing conditions clause that prevented individuals with chronic illnesses from being denied coverage through ACA exchanges. The current “community rating” system of the ACA is also at risk if this motion goes without congressional defense.
With or without the most polarizing and divisive reform policy of the last five decades, the future of our domestic healthcare system is cloudy at best. Only informed citizens having insightful conversations will spur positive change. If until now you’ve been asleep at the wheel regarding healthcare reform, this briefing should serve as a wake-up call.
Small business owners are especially vulnerable to the ongoing healthcare uncertainty. It’s difficult to keep up with the ACA and other key policies that can affect your business. At Group Management Services, we provide owners with access to quality health insurance coverage at reasonable rates and keep them informed about changes in policies that can impact their business. Contact GMS today to talk to one of our experts about how we can help your business through these uncertain times.