AANEM News Express

AANEM News Express

The ACA Survives Legal Challenge

6/30/2015
 
The Patient Protection and Affordable Care Act (ACA) survived its second major legal challenge this past week.  On June 25, 2015, the U.S. Supreme Court, in a 6-3 decision, upheld health insurance tax-credit subsidies for low-income Americans in every state – regardless of whether the insurance was purchased on a state-run or federally-run exchange.
 
At the heart of the case was the interpretation of a single phrase – that the federal government would provide tax-subsidies for eligible individuals in healthcare exchanges that are “established by the state.” The plaintiffs in this case resided in states with an exchange run by the federal government, not a state.  Ultimately, the majority opted against a strict construction and deferred to congressional intent.  In the concluding paragraph of the majority’s opinion, Justice Roberts wrote, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”
 
According to an analysis done by the Kaiser Family Foundation, approximately 6.4 million people in the 34 states with federally-run exchanges would have lost their subsidies if the court had ruled differently.  There was much speculation that if the court invalidated the subsidies, health insurance costs would skyrocket and, ultimately, result in the demise of the ACA.
 
While the decision was hailed as a victory by many, reaction to the ruling was divided. Perhaps one of the most visible critics was Supreme Court Justice Scalia, the author of the dissent.  Justice Scalia lambasted the majority’s opinion in a 31-page dissent, referring to the law as “SCOTUScare.” Several Republican congressional leaders also voiced their opposition to the decision, going on to state that this court case will not stop other efforts to repeal or derail the law.
 
The U.S. House of Representatives recently passed two bills repealing a couple major provisions of the ACA. The first bill eliminates the Independent Payment Advisory Board (IPAB). Under the ACA, the IPAB is tasked with ensuring that Medicare spending does not exceed specified targets. The IPAB has the authority to make cuts to Medicare spending.  Congress can only override the agency’s decisions through a supermajority vote. The second bill repealed the tax on manufacturers of medical devices (one source of funding for the ACA). President Barack Obama has pledged to veto both bills.  The two bills are now in the Senate, where Democrats will work to prevent a veto-proof majority. There are several other bills aimed at dismantling the ACA working their way through Congress – including discussion of utilizing budget reconciliation to repeal the entire law.
 
In addition to the legislative challenges, House Speaker John Boehner, with the support of a majority in the House of Representatives, filed a lawsuit in federal court last fall.  The lawsuit challenges the administration’s right to directly reimburse insurance companies without Congressional approval, for costs related to providing new health plans. It also contests the administration’s unilateral decision to delay the so-called “employer mandate” for a year. The lawsuit is currently working its way through the court.
 
The fight is most certainly not over, but the ACA survived the latest round of contention.


View Related News Stories:

  AdvocacyAffordable Care Act


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