‘Into chaos’

A primer on what would happen if the federal health care law went away

A 2017 rally for health care coverage in Washington, D.C.

A 2017 rally for health care coverage in Washington, D.C.

Photo by Ted Eytan via Flickr

About this story:
This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

Any day now, the 5th U.S. Circuit Court of Appeals in New Orleans could rule the entire Affordable Care Act unconstitutional.

At least it seemed that two of the three appeals court judges were leaning that way during oral arguments in the case, State of Texas v. USA, in July.

Trump administration health officials have said they will continue to enforce the health law pending a final ruling from the U.S. Supreme Court. But that is not a guarantee that President Trump won’t change his mind. That’s what he did in 2017 in canceling some payments to health insurers.

There’s no doubt that invalidating the ACA (aka Obamacare) in whole or in large part would have a dramatic effect on the nation’s health systemand not just for those 20 million or so Americans whose coverage directly flows from the law.

“Billions of dollars of private and public investmentimpacting every corner of the American health systemhave been made based on the existence of the ACA,” said a brief filed by a bipartisan group of health policy experts. Declaring the law null and void “would upend all of those settled expectations and throw healthcare markets, and one-fifth of the economy, into chaos,” they wrote.

And with health care continuing to be a top issue in the presidential campaign, both Democrats and Republicans could find themselves scrambling for a fast stopgap solution if the law were to suddenly go away.

Some background

At issue in the ACA case is whether the language in the 2017 GOP tax bill reducing to zero the tax penalty imposed for failing to have health insurance should render the rest of the law invalid.

A group of Republican state attorneys general and governors say it should. They argued that the Supreme Court’s justification for upholding the law in 2012 no longer exists and so the law is now unconstitutional. U.S. District Judge Reed O’Connor agreed with them last December.

Supporters of the lawincluding not just Democratic attorneys general, but also the Democratic-led U.S. Houseand bipartisan groups of legal and health policy scholars say that’s nonsense, and that the law not only can function without the individual mandate penalty but also is functioning now.

What would go awaymeaning which provisions consumers have become accustomed toif the law is eventually struck down? Let’s take a look.

Insurance protections

Most people think the health law directly affects only those Americans who purchase their own insurance through the exchanges the law created (and who get subsidies if their incomes are between 100 percent and 400 percent of the poverty level). That’s about 10 million to 12 million households.

But many of the insurance protections in the law also protect those who have insurance through their jobs. These provisions include allowing adult children to stay on their parents’ health plans and requiring coverage at no additional charge for people with pre-existing health conditions. The law also requires that ACA-compliant policies provide preventive care with no out-of-pocket cost, and bans annual and lifetime insurance coverage limits.

It also limits insurers’ amounts of profit and administrative expenses. That makes for a lot of chaos right there should the entire law disappear. But there is more.

Medicare and Medicaid

Most people with a passing familiarity with the health law know it expanded the Medicaid program for those with incomes up to 138 percent of the poverty level (at least in states that opted into the program).

The law also made big changes to the Medicare program, including closing the notorious “doughnut hole” that left some seniors with big drug bills despite having insurance. The ACA also extended coverage of more preventive benefits for people with Medicare coverage.

Generic biologics

An important, though frequently overlooked, portion of the health law created the first legal framework and regulatory pathway for copies of expensive, already FDA-approved biologic drugs, called biosimilars, to reach the market. Biologic drugs are among the most expensive medications and treat life-threatening ailments such as cancer, rheumatoid arthritis and macular degeneration. It is unclear what would happen to the stream of biosimilars already approved if the law is struck downwill their approvals be revoked? What about medications currently in the approval pipeline?

Funding for Natives, training programs

Among other little-known features of the ACA is a provision that permanently authorized the U.S. Indian Health Service, which provides health coverage for more than 2.5 million Native Americans and Alaska Natives. An overturn of the law could leave in doubt the legality of some of the program’s operations.

Here’s one more you may not have thought about. On the theory that if more people have health insurance more people will seek medical care, the ACA has an entire section devoted to increasing the supply of not just physicians, but also nurses, therapists, dentists and community health centers. Many of these training programs could flounder if the ACA is overturned.

And those now-ubiquitous calorie counts on restaurant menus? Those are there because of the ACA. Some people may not be sad to see those go away. But if the ACA is invalidated, the health system likely will change in ways that no one can predict.