trending Market Intelligence /marketintelligence/en/news-insights/trending/LIUVoOKeG-ixSrBP5z-J_Q2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

In This List

Appeals court voids Obama health law mandate, returns case to Texas judge

Gauging Supply Chain Risk In Volatile Times

S&P Global Market Intelligence

Cannabis: Hashing Out a Budding Industry

Segment

IFRS 9 Impairment How It Impacts Your Corporation And How We Can Help

The Market Intelligence Platform


Appeals court voids Obama health law mandate, returns case to Texas judge

SNL Image

Source: AP Photo

The U.S. Court of Appeals for the 5th Circuit in New Orleans declared the Affordable Care Act's individual mandate unconstitutional but did not invalidate the law in its entirety.

The appeals court returned the case to the lower district court in Texas to decide if other provisions in the 2010 healthcare law could survive without the individual mandate.

"The rule of law demands a careful, precise explanation of whether the provisions of the ACA are affected by the unconstitutionality of the individual mandate as it exists today," the 5th Circuit judges said in their Dec. 18 ruling.

That appeals court's action, though, does not necessarily mean the U.S. Supreme Court will not hear the case in the midst of the 2020 U.S. presidential and congressional elections, noted University of Michigan Law Professor Nicholas Bagley.

The Supreme Court is not normally in the habit of reviewing cases that are not yet final, but he noted it only takes four justices to vote to hear a case and that the more liberal justices may want to move forward with it. If it does not hear the case, "we're back into a waiting game," Bagley tweeted.

The Supreme Court has twice upheld the ACA — in 2012 and in 2015.

The 5th Circuit heard oral arguments in the case in July after a federal judge in Texas ruled in December 2018 that the ACA was unconstitutional.

The lawsuit was brought by a coalition of Republican state attorneys general and governors, who argued that when Congress zeroed out the ACA's tax penalty for the individual mandate under the 2017 tax reform bill, that action rendered the remainder of the healthcare law unconstitutional.

The Texas judge agreed, saying the individual mandate penalty could not be severed from the rest of the law.

The Trump administration refused to defend the law and initially called on the court to specifically overturn the ACA's pre-existing conditions protections, but in March told the 5th Circuit it wanted the entire law dismantled.

The 2010 law was former President Barack Obama's signature legislative achievement and has been a target of Republicans since it was enacted. Republicans on Capitol Hill, however, were not successful in 2017 in passing their repeal-and-replace bills when the party controlled both chambers of Congress and the White House.

No backup plan

President Donald Trump has not provided a replacement for the Obama healthcare law.

SNL ImageCMS Administrator Seema Verma
Source: AP Photo

At an Oct. 23 hearing by the House Energy and Commerce Oversight and Investigations Subcommittee, Centers for Medicare and Medicaid Services Administrator Seema Verma declined House Democrats' requests to provide details of Trump's purported backup plan.

"It sounds almost like there's some kind of secret plan that he doesn't want to reveal," Rep. Frank Pallone, D-N.J., chairman of the House Energy and Commerce Committee, said at the hearing.

Pallone and other Democrats pressed Verma about the administration's plans for how it would address millions of Americans being left without health insurance and without other programs that would be forced to stop if the ACA is declared unconstitutional.

"I'm not going to get into any specifics," Verma responded. "We have planned for a number of different scenarios, but we need to hear from the courts."

Joe Grogan, director of the White House Domestic Policy Council, said Trump's long-promised healthcare plan was "right in front of your eyes."

"It's all of the things we're doing on healthcare on a daily basis," he said in a Nov. 8 interview, repeating remarks he made in October that Trump's plan relies on a piecemeal approach.

Democrats have accused the Trump administration of trying to sabotage the ACA, particularly by extending short-term health plans, which largely do not cover patients with pre-existing medical conditions.

A recent poll by the nonpartisan Kaiser Family Foundation found that more Americans trust Democrats over Republicans to do a better job handling healthcare in the U.S, with few saying they think Trump will deliver on his repeated promises to provide a healthcare plan to replace the ACA.

Programs, protections at risk

A number of programs and protections created by the ACA are at stake.

SNL ImageU.S. Supreme Court Justices Stephen Breyer, Clarence Thomas, John Roberts (Chief), Ruth Bader Ginbsburg, Samuel Alito, Neil Gorsuch, Sonia Sotomayor, Elena Kagan and Brett Kavanaugh.
Source: Fred Schilling, Collection of the Supreme Court of the United States

Most notably, Americans with pre-existing medical conditions would be put at risk of losing their insurance coverage, since those safeguards against discrimination were put into place under the ACA.

Also under threat is the ACA's Medicaid expansion, the loss of which could result in about 13 million low-income Americans having to seek other insurance coverage.

Parents also can keep their adult children up to age 26 on their healthcare insurance policies under the ACA.

In addition, seniors and Americans with disabilities enrolled in the federal government's Medicare Part D prescription drug program could pay more for their medicines if the provision that closed the so-called doughnut hole does not survive.

Further, the U.S. Food and Drug Administration pathway to approve lower-cost versions of biologic therapies, or biosimilars, was established under the ACA.

The 2010 law also created the Center for Medicare and Medicaid Innovation — the program the Trump administration is relying on for some of its drug pricing proposals, which would no longer be able to be carried out if that provision was wiped out.

The premium tax credits that help millions of Americans pay for their individual health plans also could go away.

SNL Image

U.S. Supreme Court
Source: AP Photo

Corporations, wealthy would benefit

While millions would lose health insurance, the dismantling of the ACA would create a financial advantage for some of the wealthiest Americans and corporations, such as biopharmaceutical manufacturers, analysts at the nonpartisan Center on Budget and Policy Priorities noted in a Nov. 4 report.

The 1,400 highest-income taxpayers — the top 0.001% of U.S. households, with annual incomes over $53 million — would receive $3.8 billion in total tax cuts, the CBPP analysts reported.

Brand-name drugmakers would pay $2.8 billion less in taxes annually if the law was totally voided.

"In effect, the administration and the state attorneys general are seeking a massive transfer of income from low- and moderate-income Americans to people on the top rungs of the income ladder," the CBPP analysts said.