UPDATE: The US Supreme Court will not decide the ACA's fate this spring
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Senior Manager, Health Research Institute, PwC USJanuary 21, 2020
On Jan. 21, the US Supreme Court denied requests from Democratic lawmakers, a coalition of Democratic-led states and others to review a recent appellate court decision that calls into question the fate of the Affordable Care Act (ACA). The petitioners had argued that the case, Texas v US, should be settled as quickly as possible to dispel the cloud of uncertainty hanging over the industry. The Trump administration and Republican-led states that filed the original suit challenging the constitutionality of the ACA argued in their response that there is "no present, real-world emergency” and that it would be premature for the Supreme Court to interfere as lower courts are still working through key questions.
The plaintiffs, mainly a group of Republican-led states, argue that when Congress in 2017 reduced the penalty to $0 for individuals who did not obtain insurance, the penalty could no longer be construed as a tax. That renders the entire law unconstitutional, they argued, because in National Federation of Independent Business v. Sebelius, the Supreme Court upheld the constitutionality of the individual mandate under Congress’ taxing power. In December 2018, a district judge agreed, and in mid-December, the Court of Appeals held and sent it back to the district judge to determine what parts of the law could stand, if any.
HRI impact analysis
A decade after its passage, the ACA is embedded in the foundation of the US healthcare system, affecting patients, providers, insurers, life sciences companies, employers, taxpayers, and federal and state governments, among others. The Court's decision to deny the petitioners' request for a faster review does not mean the justices will take the case at all, but it does mean any decision is pushed off until after the election.
In an analysis of the impact of repealing the ACA conducted in 2017, HRI estimated that the law’s demise would lead to 32 million fewer insured Americans within a decade, including 19 million fewer Medicaid beneficiaries and 23 million fewer people with nongroup coverage. HRI also projected that an outright repeal would lead to a boost of 10 million more with employer coverage over 10 years.
Within the industry under this scenario, providers would suffer the most as swelling numbers of uninsured and underinsured patients seek care. Payers offering nongroup products to millions of federally subsidized consumers would suddenly find their markets capsized, as would payers offering managed care to consumers with expansion Medicaid coverage, according to HRI’s analysis. Pharmaceutical and life sciences companies would be modestly affected, mostly because of the rise in uninsured Americans unable to afford their products, HRI projected.