AHIP Works to Speed Texas v. Azar to Supreme Court

American’s Health Insurance Plans (AHIP) has told the U.S. Supreme Court that its members would like the U.S. Supreme Court to rule on the constitutionality of the Affordability Care Act (ACA) as quickly as possible.

AHIP says, in an “amicus” brief, or “friend of the court” brief, that it would prefer to see the court keep all of the ACA intact, or simply kill the portions directly related to the individual coverage mandate provision, than to see all of the ACA go away in a flash.

And AHIP says its members want to see the Supreme Court act on the matter soon, not leave health insurers and enrollees dangling as a district court in Texas takes a second whack at the case.

Resources

Links to the AHIP amicus brief and other groups’ amicus briefs are available here.

An earlier article about the Texas v. Azar case is available here.

A three-judge panel at the 5th U.S. Circuit Court of Appeals recently declared the ACA individual coverage mandate provision to be unconstitutional. The court ruled that the case should return to the lower court judge for further

That decision “’prolong[s] the uncertainty this litigation has caused to the future of this indubitably significant statute’” and “’ensures that no end for this litigation is in sight,’” AHIP writes in the brief, quoting an earlier court ruling. “‘Such a do-over in the lower courts raises the prospect of years of further litigation.’”

The Background

The drafters of the two bills that created the ACA want to keep health insurers from using health problems, such as obesity or diabetes, as a reason to reject applicants for coverage, or to charge sick people more for coverage.

To make a guaranteed-issue system work, the drafters tried to add many subsidies, stabilization programs, underwriting rules and requirements to the rules for individual major medical insurance.

The “individual shared responsibility” section, or individual mandate section, requires many people to have what the government classifies as solid major medical coverage, or minimum essential coverage (MEC).

Starting in 2014, the individual mandate section required some people who failed to have MEC for enough of the year to pay a penalty.

ACA opponents argued that the provision was the equivalent of a law requiring people to buy and eat broccoli, even if they hate broccoli.

The U.S. Supreme Court ruled in 2012 that ACA opponents could not sue to have the ACA’s “individual shared responsibility” penalty, or individual mandate penalty, declared unconstitutional, because the penalty was a tax. The court held that a federal law prohibits taxpayers from suing to have the courts use injunctions to block new taxes, including the ACA individual mandate penalty.

Congress later put a provision setting the individual mandate penalty at zero in the legislation that created the Tax Cuts and Jobs Act of 2017.

ACA opponents in Texas and elsewhere argued that, because the penalty is now set at zero, the provision is simply a bare requirement for some people to have minimum essential coverage, not a tax. Those opponents have argued that the courts should declare that a bare requirement for people to have health insurance is unconstitutional.

Because the ACA has no severability provision keeping the rest of the ACA in force if one part is tossed out, killing the individual mandate provision unconstitutional should kill all of the ACA, ACA opponents contend.

The 5th Circuit panel agreed that the individual mandate provision is unconstitutional, but it asked the court to look at the issue of severability.

Possible Effects

The individual mandate provision is just one small part of the ACA. Other parts of the ACA have done thing such as funding geriatric care training programs, setting up the ACA public health insurance exchange system, and closing the Medicare Part D prescription drug plan “donut hole” — the gap between when routine drug benefits end and catastrophic coverage begins.

If the Supreme Court throws out all of the ACA, it could allow for a long, gradual transition period.

But the court could throw out all of the ACA immediately, or even nullify the law in such a way that the effects of the nullification were retroactive.

The AHIP Brief

AHIP contends in its brief that Congress would probably not want “‘a statute on which millions of people rely for their health care and livelihoods to disappear overnight with the wave of a judicial wand.’”

“Wholesale invalidation of the ACA would presume Congress’s cavalier indifference to the impacts that result would unleash on the health care system — including for all of the 297 million Americans with health coverage today,” AHIP writes. “That number includes Americans who receive tax credits to purchase coverage on exchanges and in the private market without regard to preexisting conditions; Americans receiving coverage through their employer; lower-income Americans in states that have expanded the Medicaid program; and older Americans and those with disabilities receiving benefits through Medicare.”

AHIP acknowledges that it originally believed that the ACA individual mandate would be critical to creating a stable guaranteed-issue health insurance market.

Now, however, health insurers have more experience with the ACA, and they believe the market can operate reasonably well without a mandate, AHIP says.

“The ACA has shifted the paradigm for health care coverage in this country,” AHIP says.

If the ACA suddenly disappeared, Medicare Advantage plan issuers would have to face sudden changes in the rules the federal government has been using to make payments to Medicare Advantage plan issuers, such as the quality bonus payment rules, AHIP adds.

Matt Eyles’ Statement

AHIP President Matt Eyles said in a statement about the Texas v. Azar case that “the district court’s original decision to invalidate the entire ACA was misguided and wrong.”

“We urge the Supreme Court to grant certiorari and remove the overhanging legal uncertainty that undermines the stability of coverage for nearly 300 million Americans, and that inhibits greater and faster progress to improve coverage and care for everyone,” Eyles said.

The Supreme Court should not let zeroing out the mandate wreak havoc across the entire American health care system, Eyles said.

— Read Appeals Court Rejects Health Insurers’ Plea for Billions in Subsidy Money, on ThinkAdvisor.

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