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Experts: Texas ACA ruling does not pose immediate threat to Medicaid expansion

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Experts: Texas ACA ruling does not pose immediate threat to Medicaid expansion

A federal district judge on Dec. 14 ruled that the entirety of the Patient Protection and Affordable Care Act is unconstitutional, but healthcare policy and legal experts say the ruling will have little effect on planned Medicaid expansion programs across the country that are allowed under the law.

U.S. District Court for the Northern District of Texas Judge Reed O'Connor ruled that the entirety of the ACA is unconstitutional due to a provision in the 2017 Republican tax bill that reduced the monetary penalty attached to the individual mandate to zero dollars.

O'Connor's ruling did not immediately invalidate the law and is expected to be appealed. Because of this, experts said that current expansion states and states that are expected to implement newly passed expansion legislation should not be worried about their programs being disrupted.

Adam Searing, an associate professor at Georgetown University's Center for Children and Families, said in an interview that expansion opponents will use the lawsuit to challenge expansion efforts, but he does not see the ruling as a "deathblow."

"There are going to be state-level politicians who are going to pull out this lawsuit and say: 'Oh, we have to delay doing anything until the lawsuit gets resolved,'" Searing said. "But I've been following this issue for a long time, and ... I don't think it's going to be hugely determinative one way or the other."

Medicaid expansion is a provision under the ACA that allows states to increase Medicaid coverage to people that make an annual income up to 138% of the federal poverty level. The ACA also states that the federal government will pick up at least 90% of a state's costs associated with expansion. As of September 2017, nearly 13 million people have gained Medicaid coverage under expansion, according to the nonpartisan Kaiser Family Foundation.

Searing said that new expansion states such as Idaho, Nebraska and Utah will still have implementation challenges, but the same ones that existed before the ruling was made.

Eliot Fishman, senior director of health policy at Families USA, a healthcare policy nonprofit, agreed in an interview that expansion opponents will use the ruling as a "talking point," but said that new expansion states and states that recently elected pro-expansion, Democratic governors will be able to "rebut those concerns pretty easily."

Should the ruling survive, Timothy Jost, an Emeritus Professor at the Washington and Lee University School of Law, told reporters Dec. 18 that the large portion of federal funding given to states for expansion would go away.

Searing and Fishman said that some states have a provision in their legislation that invalidates the state law once the federal government's contribution drops below a certain level. If a state does not have this type of provision, both said a state's portion of the cost would significantly increase. Fishman estimated that states would have to come up with three to five times the amount they had budgeted to cover expansion costs.

While Searing and Fishman do not believe that expansion is in immediate jeopardy, both said that if O'Connor's ruling is upheld, the majority of expansion states would most likely abandon the program.

"It really would be chaos, and there would be people losing coverage right and left," Searing said. "There would be such chaos in the healthcare system … that very few if any states would be able to continue the expansion."

Jost, however, does not believe the ruling will survive the appeals process.

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