Domestic Affairs

The Hard-Fought Life of the Affordable Care Act

The Affordable Care Act (ACA), one of the most controversial pieces of legislation in recent U.S. history, has been hotly contested since its original passage in 2010, so its most recent appearance before the Supreme Court hardly comes as a surprise. 

At its core, the ACA is a healthcare reform law passed under the Obama administration with the purpose of extending health insurance coverage to millions of uninsured Americans. The ACA aims to achieve this goal by “expand[ing] Medicaid eligibility, creat[ing] health insurance exchanges, and prevent[ing] insurance companies from denying coverage (or charging more) due to pre-existing conditions.” 

While the objectives of the ACA may seem universally appealing, many have argued that provisions it uses to achieve these goals are unconstitutional. The most frequently challenged of these provisions is the individual mandate the ACA uses as an enforcement mechanism. Put simply, the individual mandate requires that American citizens must either buy health insurance or pay a penalty. 

Consequently, the individual mandate has been the subject of seemingly endless court cases since the ACA’s passage. In March 2010, a lawsuit was filed in Florida on behalf of 26 states, two individuals, and the National Federation of Independent Business, an independent organization. The lawsuit challenged the ACA on the grounds that the individual mandate was outside the scope of Congress’s authority to regulate interstate commerce, as written in the U.S. Constitution. Additionally, the lawsuit stated that Congress was violating the Tenth Amendment by requiring states to follow the ACA’s federal regulations. 

The case was first heard in a federal district court in Florida, and the individual mandate was ruled both as unconstitutional and as integral to the function of the ACA, therefore making the entire act unconstitutional. The case was then appealed and sent to the 11th Circuit Court of Appeals, where the individual mandate was struck down again. However, the court also found the mandate to be severable from the act as a whole and subsequently preserved all other parts of the ACA. 

The lawsuit eventually found its way to the Supreme Court in November of 2011, resulting in a landmark 5-4 ruling in June of the next year. The Supreme Court decided that the individual mandate, while “not authorized under the Commerce Clause… is nonetheless a valid exercise of Congress’s power under the Taxing Clause.” However, the Court also ruled that the Medicaid expansion provision was unconstitutional due to the fact that it threatened to deprive states of existing Medicaid funding if they refused to comply with the expansion and consequently struck the provision from the ACA. 

But this is far from the last time the ACA appeared before the Supreme Court. In 2015, the Court delivered another ruling, this time centered around tax credits for purchasing on the federal exchange, or a marketplace for consumers to browse and purchase insurance plans. Several states had sued on the grounds that the IRS’s issuance of tax credits to individuals purchasing plans on the federal exchange was unconstitutional and claimed that the ACA “only allowed the IRS to grant tax credits to individuals who purchased insurance through state exchanges.” Once again, the Supreme Court upheld the ACA, this time with a 6-3 ruling that stated that the IRS’s actions were within reason.

Still, many remained firmly opposed to the far-reaching aims of the ACA – especially the individual mandate – and as of November 2020, it has once again found its way to the Supreme Court. This is unsurprising, especially considering President Trump has promised since before his election in 2016 that he would work to “repeal and replace” the ACA, a goal that he also included in his recent re-election bid. 

In 2017, President Trump and his administration appeared to make significant strides towards this goal after the Republican-controlled House of Representatives changed the tax penalty of the individual mandate to zero. This allowed Texas and several other Republican-led states, as well as the Trump administration, to challenge the constitutionality of the mandate once more, arguing that the zero-dollar penalty could no longer be considered a tax. Furthermore, these states have posited that the mandate is so intertwined with the rest of the law that the ACA must be struck down in its entirety. 

The political landscape has changed vastly since the inception of the ACA, especially within the Supreme Court. With three justices appointed by President Trump, conservatives hold a 6-3 majority on the Court, leading many to believe that the days of the ACA are numbered. Trump’s most recent appointment, Justice Amy Coney Barrett, has been particularly critical of the Court’s past two rulings. However, even conservative justices appear to be hesitant to invalidate the entirety of the ACA. 

Since the most recent court proceedings started in November 2020, several justices have commented on the severability of the individual mandate. For example, Chief Justice John Roberts mentioned that he did not believe Congress intended for the entire act to be struck down, as no attempt was made to do so when the individual mandate penalty was lowered to zero. Justice Brett Kavanaugh, one of President Trump’s conservative appointees, appeared to agree with Roberts and mentioned the possibility of severing the mandate and leaving the ACA intact. Even Justice Clarence Thomas, one of the court’s most conservative justices, questioned the standing of the plaintiffs.

Based on these initial remarks, it seems likely that the ACA will continue to survive the attempts to repeal it, a good sign for the roughly 20 million Americans that rely on the ACA for health insurance coverage. In fact, the hesitancy of the Supreme Court to strike down the ACA is likely due to the fact that there is no alternative healthcare plan with protections for consumers with pre-existing conditions, despite many promises from the Trump administration. In addition, the effects of the COVID-19 pandemic on healthcare and health insurance consumers likely play a large role in the Supreme Court’s consideration of the ACA. Without the ACA or a similar alternative, the millions of Americans who may experience long term health issues as a result of contracting COVID-19 will be left without consumer protections when purchasing health insurance plans in the future.

However, President-elect Biden’s goal to create a public option for health insurance, which would extend the role of the federal government in insurance even beyond what the original ACA intended, is nearly a guarantee that the ACA will reappear in court. This public option would function much like Medicaid but would be available to all ages and would “compete against private insurance plans in the marketplace.” The Biden administration also plans to restore much of the ACA funding the Trump administration undercut, in addition to expanding eligibility for federal premium subsidies. Still, before any of these proposed changes make it before a judge, they must first pass through the Senate, which presents its own kind of trial. 

Even if Democrats manage to gain a majority in the Senate after the Georgia runoff elections in January, the Biden administration is not guaranteed success in passing its proposed changes to the ACA. These changes will almost certainly be met with fierce resistance by Republicans, but even moderate Democratic senators may be hesitant to vote in favor of such extensive changes. If it acts quickly, the Biden administration may be able to capitalize on the  pandemic to aid in its mission to expand the ACA; but the longer it waits, the more it seems that the ACA is doomed to continue living a hard-fought life.

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