An unexpected ruling at the end of 2018 invalidating the Affordable Care Act paved the way for even more uncertainty for the landmark law, following a decade of upheaval, ranging from a Supreme Court ruling to multiple attempts by congressional Republicans to kill it.
The latest uncertainty stems from a lawsuit filed by Texas and 17 other Republican-led states challenging the law, claiming it was unconstitutional after the individual mandate was zeroed out in the 2017 Republican tax overhaul.
In the surprise December 2018 ruling, Judge Reed O’ Connor of the U.S. District Court for the Northern District of Texas sided with the plaintiffs and said the individual mandate was unconstitutional and couldn’t be split off from the law as a whole.
In July a panel of the U.S. Court of Appeals for the Fifth Circuit Court of Appeals heard oral argument. A decision is expected any day.
While the ACA is still the law of the land, Reed's decision has created uncertainty on many fronts, particularly with respect to the insurer marketplaces.
Hospital and insurer stocks have been volatile in response to efforts to undermine the law. Managed care organizations with an outsized presence in the exchanges like Anthem, Centene and Cigna face a heightened level of risk if the law is overturned. Hospitals also generally benefited from the ACA as more patients got coverage through states that expanded Medicaid.
The marketplace may already be affected by misconceptions on the status of the ACA. Some potential enrollees apparently think the law is invalidated already, Timothy Jost, emeritus professor at Washington and Lee University School of Law, told Healthcare Dive.
Nearly everyone expects the decision, however it comes out, to be appealed to the U.S. Supreme Court.
“Nothing will change on the ground unless and until the Supreme Court hears the case,” Nicholas Bagley, a law professor at The University of Michigan at Ann Arbor, told Healthcare Dive.
"If we get a final decision that the law is invalidated, it will wreak havoc in the healthcare system."
Lawyer and health policy expert at Georgetown University
If Fifth Circuit’s decision is appealed, either by asking the full appeals court to review the panel’s ruling or by appealing to the Supreme Court, the decision will likely be stayed while that appeal wends it way through the courts.
If the law does wind up being upended, the effects will go way beyond just the insurance marketplace, Katie Keith, a lawyer and health policy expert at Georgetown University, said.
"Folks tend to think that the ACA is solely about the marketplaces and the individual market when, in reality, the law includes far-reaching provisions," she told Healthcare Dive.
Indeed, if the invalidation of the law stands, it would spell the end for Medicaid expansion, end coverage for those with pre-existing conditions, terminate certain free preventive health services, knock young adults off their parents’ health plans, lead to the reopening of the Medicare drug donut hole, end the biosimilar approval pathway through the FDA, and cut the Center for Medicare and Medicaid Innovation which has been pushing some of the administration's current health priorities, including new payment models for healthcare services.
"It's such a long list that I haven't really gone through the full list yet," Keith said.
The fallout could be particularly harsh amid discord in a divided Washington, D.C. CMS chief Seema Verma contends the administration is ready in event the ACA is overturned, but has not yet made a concrete plan public.
The Commonwealth Fund estimates that if the lower court's ACA invalidation is upheld, about 20 million people would lose healthcare coverage and millions more could experience huge premium increases, spikes in out-of-pocket costs, and denials based on their health status.
While several states have passed legislation incorporating federal ACA protections — like those for people with pre-existing health conditions — it's unclear states will be able to continue them, especially in the case of employer self-funded plans the federal Employee Retirement Income Security Act prohibits them from regulating.
If the law is upheld, the entire ACA would remain in effect, without a mandate penalty, and the marketplaces will presumably continue to be stable, Keith said.