trending Market Intelligence /marketintelligence/en/news-insights/trending/XiVc1BTly-1LaBZqqhvizw2 content esgSubNav
Log in to other products

 /


Looking for more?

Contact Us
In This List

Capitol Checkup: Both sides want speedy ACA appeal; FDA shutdown may go to 2019

Video

Climate Credit Analytics: Linking climate scenarios to financial impacts

Blog

Global M&A Infographic Q1 2021

Blog

Q1 2021 Global Capital Markets Activity: SPAC IPOs, Issuance in Consumer Discretionary Sector Surge

Blog

COVID-19 Impact & Recovery: Private Equity


Capitol Checkup: Both sides want speedy ACA appeal; FDA shutdown may go to 2019

Both sides in the legal battle being waged in Texas over the constitutionality of the Affordable Care Act want a federal judge to permit the case to promptly move forward to an appeal without delay while other aspects of the lawsuit are being decided.

The Republican attorneys general and governors from 20 U.S. states who brought the case against the ACA agreed with a coalition of Democrats on the other side of the lawsuit that the Dec. 14 decision by Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas, who ruled the entire 2010 law unconstitutional, should immediately proceed to the U.S. Court of Appeals for the Fifth Circuit in New Orleans.

In a separate Dec. 21 filing, the Trump administration, which sided with the Republican plaintiffs rather than defending the law, also said it wanted a speedy appeal of O'Connor's decision.

A ruling on the motions could come by Dec. 31.

Last week, California Attorney General Xavier Becerra led a coalition of 17 Democratic state attorneys general in asking O'Connor to let the case proceed to the Fifth Circuit and to also make clear that the ACA was still the law of the land and would continue to be enforced and implemented by states, the federal government and entities across the country until an order by the court expressly stated otherwise.

They also asked the district judge to grant an immediate stay on his Dec. 14 decision.

On Dec. 18, O'Connor asked the plaintiffs and the Trump administration to weigh in by Dec. 21 on whether they thought a stay was necessary, if the court should enter a partial final judgment and whether the case should move forward immediately to the Fifth Circuit.

O'Connor also called on all the parties to propose a path forward for the other four claims brought by the plaintiffs that were not included in the Dec. 14 ruling.

In their Dec. 21 responses to the court, the Justice Department and the Republican plaintiffs both said a stay was not warranted.

The Trump administration also said it wanted the appeals court to review the severability issue of the ACA.

In siding with the state attorneys general, O'Connor had ruled that when congressional Republicans zeroed out the ACA's tax penalty for the individual mandate last year under the Tax Cuts and Job Reform Act, that action rendered the remainder of the 2010 healthcare law unconstitutional.

The Justice Department said "whether all ACA provisions — or just the individual mandate, community rating and guaranteed-issue provisions — are invalid will have an enormous impact on further proceedings in this case, including remedial issues that remain to be resolved."

The administration had sought to specifically get the provision that protects Americans with pre-existing medical conditions struck down, despite President Donald Trump and Republican members of Congress insisting ahead of the November midterm elections they were in favor of safeguarding those protections.

"The ACA doesn't do a good job of protecting Americans with pre-existing conditions," Centers for Medicare and Medicaid Services Administrator Seema Verma said in a Dec. 20 tweet. "What good are protections if you can't afford coverage," she said, insisting a "family of four was paying $1,500 a month."

But Zack Cooper, a health economist and associate professor at Yale University, said Verma's statement was "misleading."

"With subsidies, the cost to most families of four is way lower than she suggests," Cooper wrote on Twitter. "Plus, this is way cheaper than what a family would pay pre ACA. Finally, she offers no alternatives. She should be better than this."

A number of analyses, including one from The Commonwealth Fund, have shown that without the ACA's protections, the costs of insurance plans would be even greater for Americans and the short-term plans the Trump administration has implemented discriminate against people with pre-existing conditions, have high cost sharing and a number of exclusions.

Seeking clarity on Texas ruling

In its Dec. 21 response to the federal judge in Texas, the Trump administration said it agreed with the Democratic attorneys general that clarity was needed to reassure Americans that the ACA remained in place and enforceable for now, acknowledging the law was "intertwined with the functioning of the nation's healthcare markets."

"Beyond regulating the health insurance markets and the associated subsidies, the nearly 1,000-page legislation, which has been in effect for several years, governs other disparate areas of the healthcare system in the United States, ranging from Medicaid [and] Medicare to virtually every public health program," the Justice Department said.

Were the court's Dec. 14 order to go into immediate effect, it "could have significant consequences," the agency said.

An analysis from the nonpartisan, nonprofit Kaiser Family Foundation illustrated that if O'Connor's decision was upheld, it would affect nearly all Americans in some way.

The law expanded Medicaid — the government's insurance program for low-income Americans — to about 13 million people. It also created the regulatory pathway for the U.S. Food and Drug Administration to approve lower-cost versions of biologic therapies, or biosimilars.

The ACA also closed the coverage gap, known as the doughnut hole, in the government's Medicare Part D prescription drug program for seniors and disabled Americans.

In addition, the 2010 healthcare law created the Center for Medicare and Medicaid Innovation — an entity whose authority the Trump administration has sought to use to test ways to lower drug prices and for other initiatives.

Meanwhile, another ACA case filed by Maryland Attorney General Brian Frosh is moving forward. Frosh is asking a judge to declare the ACA constitutional and prevent the Trump administration from taking actions to dismantle the 2010 law.

At a Dec. 19 hearing, the Trump administration argued Maryland did not have standing in the case because the state has not alleged any actual controversy, though Frosh's attorneys insisted the state would be harmed if the ACA were invalidated.

In a twist in that case, Frosh also challenged Trump's appointment of Matthew Whitaker as acting U.S. attorney general, saying he has extreme views and was unlawfully put into the job, violating the U.S. Constitution.

Enrollment dips, but ACA alive and well

In the meantime, the latest enrollment figures showed ACA insurance plans remained popular with Americans — though the numbers dipped slightly — despite the Trump administration cutting the sign-up timeline in half, slashing advertising funds and substantially reducing grants for navigators, who help enrollees understand their options and help them with paperwork to obtain financial help and assess provider networks.

Open enrollment for the federal Healthcare.gov marketplace ended Dec. 15.

On Dec. 19, CMS reported that nearly 8.5 million Americans enrolled in private health insurance plans through the ACA's marketplace, down from about 8.8 million a year earlier, a difference of about 3.3%.

Sign-ups had lagged throughout the shortened six-week enrollment period versus previous years but picked up somewhat during the last week.

CMS emphasized the Dec. 19 figures were preliminary and did not represent final numbers. They also did not include data from 11 states and the District of Columbia that operate their own marketplaces. In addition, enrollment remains ongoing in six of those states plus D.C.

The administration was criticized for altering its Healthcare.gov website in the last weeks of enrollment, removing information the nonpartisan, nonprofit Sunlight Foundation said could have confused some consumers and impeded their ability to obtain coverage.

FDA chief reassures Americans in shutdown

FDA Commissioner Scott Gottlieb took to Twitter over the weekend to try to reassure Americans he still had staff on board to serve the public, despite his agency getting caught in the shutdown turmoil after Congress failed to fund 25% of the U.S. government.

"I know the impact it has to the public, our staff and their families, especially during holidays," Gottlieb tweeted Dec. 22. "The burdens intensify the longer it lasts. We're doing everything possible to ease the impact."

After snubbing Trump's demand for $5 billion to fund a wall along the border between the U.S. and Mexico, Congress adjourned and left Washington on Dec. 22 with no plans to reconvene until Dec. 27.

During a Dec. 23 appearance on Fox News Sunday, White House Office of Management and Budget Director Mick Mulvaney, who also is serving as Trump's acting chief of staff, said it was "very possible the shutdown will go beyond" Dec. 28 and into January, when Democrats will take control of the House.

During their weekend negotiations, Mulvaney said the administration had offered lawmakers an amount lower than $5 billion, though he would not say by how much of a reduction. Mulvaney made similar remarks on ABC's This Week.

A little over 7,000 FDA employees have been told not to come to work during the shutdown — the third time all or part of the U.S. government has been shuttered in the past year.

But about 10,300 employees remain on the job at the agency.

Gottlieb said the FDA would continue to "share important safety reminders to help prevent unnecessary illness and raise awareness of emerging product concerns, especially outbreaks related to foodborne illness [and] infectious diseases."

"Staff who remain on duty are hard at work," he tweeted Dec. 23.