The future of the Affordable Care Act was put into limbo on December 18, when a federal appeals court in New Orleans ruled that the individual mandate — a cornerstone of the healthcare law that requires everyone to have health insurance regardless of age of health status — was unconstitutional.
The 5th Circuit Court sent the rest of the case back to the lower court to determine if other parts of the law could still work without the individual mandate, or if because the mandate is so central to the ACA, the entire law would need to be struck down. What happens next will impact millions of Americans, but for now the ACA is still in place and the next update is “unlikely to be resolved before next year’s presidential election,” according to the New York Times.
But Disability is Expensive
Health insurance, though, isn’t like home or car insurance. People need their bodies to survive, and everyone’s bodies break down and need care sooner or later. Healthy people might not buy health insurance because they don’t understand (or disregard) the risk of an illness or injury. But when the uninsured need healthcare, somebody winds up paying for it — whether it’s the individual, the hospital or GoFundMe contributors. Before the ACA, the private health insurance market had major flaws because it couldn’t line up the regular insurance model with the realities of the human body (and human decision making) — so there weren’t enough folks paying in more than they took out. Many employers didn’t offer insurance, and employees would just have to shop around. Private insurance was often too expensive to afford or didn’t have great coverage, with high co-pays and deductibles. Because people with pre-existing conditions had higher-than-average healthcare costs, insurance companies would either charge them huge premiums or refuse to give them insurance entirely.
The ACA was an attempt to fix those flaws through funding and regulation. It gave more funding to Medicaid and provided support to states, required more employers to provide health insurance, improved the amount and type of healthcare plans available, and provided subsidies to consumers. The mechanism that makes the ACA work — especially for people with disabilities — is the combination of requiring insurers to cover people with pre-existing conditions and implementing the individual mandate that requires everyone to purchase health insurance. That combination hit both ends of the insurance market: The individual mandate makes it so that there is an increase in people who contribute more than they take out, and that supports insurance companies enough to cover the costs of customers with pre-existing conditions. When the ACA was put into law, the individual mandate included a “penalty” at Tax Day if people did not have health insurance, and that has contributed to a growing number of people enrolled in plans.
What Happens Now
That penalty set the stage for the ruling on December 18. Back in 2012, the Supreme Court said the individual mandate was constitutional because the financial penalty was a lawful “tax.” Republican lawmakers in Washington, as well as some business and conservative political groups, focused on getting rid of the law entirely. But when repealing the ACA proved too difficult politically, conservatives set about dismantling it in pieces. The first step was a provision in the 2017 tax overhaul that simply got rid of the financial penalty but left the individual mandate in place. Suddenly the mechanism intended to get more people to purchase insurance still technically existed, but there was no longer any financial incentive to get people to sign up. Now, the states and individuals challenging the ACA claim that the penalty-free individual mandate is no longer a tax and is therefore unconstitutional. On December 18, they succeeded. Kind of.
It will take many months, possibly more than a year, before the District Court judge issues a decision on whether parts of the law can be separated out. That judge’s findings will then impact how the discussion moves forward. Either way, the decision will be appealed. People who follow healthcare expect that this and other cases about the ACA will make their way to the Supreme Court. But because the Court has two different justices than it had in 2012, no one knows how the new court is going to view the law.
Most importantly, the ACA will still be in place as the lawsuit works its way through the courts. People with disabilities who rely on the private insurance marketplace have reason to be concerned with this most recent ruling, but organizers, lawmakers and advocates still have time prepare for whatever might be on the way.