Sept. 24, 2020 – As the U.S. Supreme Court prepares to hear a case about the constitutionality of the Affordable Care Act (ACA) soon, the passing of Supreme Court Justice Ruth Bader Ginsburg sharply increases the possibility that the ACA will be ruled unconstitutional, according to Coalition for Healthcare Communication Executive Director Jon Bigelow.

The Supreme Court will hear oral arguments on the latest legal challenge to the ACA Nov. 10, and then the ruling would be handed down during the spring. The stated goal of President Donald Trump and Senate Majority Leader Mitch McConnell (R-Ky.) – and one that Democrats are unlikely to be able to block – is to confirm a new, conservatively-minded justice before the end of this presidential term. [Update: The president nominated Amy Coney Barrett for the Supreme Court seat on Sept. 26.]

In a memo to industry leaders, Bigelow provided a quick summary of the legal case, what’s at stake, ways in which the court could rule, and possible next steps depending on who is elected president in November.

The legal case, briefly

The constitutionality of the ACA has faced legal challenges before, leading to Supreme Court rulings in 2012 and 2015. In 2012, although the court limited the ACA’s expansion of Medicaid, it allowed – by a vote of 5-4, with Chief Justice John Roberts joining Justices Ginsburg, Stephen Breyer, Elena Kagan, and Sonia Sotomayor in the majority – the underlying law to stand, determining that the penalty used to enforce the “individual mandate” requiring Americans have health coverage was within the federal government’s power to tax. On a different challenge in 2015, a 6-3 majority (the previous five, plus Justice Anthony Kennedy) affirmed the law’s constitutionality.

In the December 2017 tax-cut bill, Congress removed the tax penalty for the individual mandate. So, in 2018, in a case originally called Texas v. U.S., Republican Attorneys-General from Texas and 19 other states filed a case arguing that because there was no longer a financial penalty, the federal government’s taxation power no longer governed and that therefore the entire ACA is unconstitutional. Reed O’Connor, a U.S. District Court judge in Texas, agreed.

Then Democratic Attorneys-General from California and other states appealed that decision to the U.S. Court of Appeals for the Fifth Circuit, which concurred with Judge O’Connor that the individual mandate was not constitutional without a tax penalty, but questioned his conclusion that because the mandate provision was not “severable”, the entire ACA is unconstitutional; they sent the case back to Judge O’Connor to “conduct a more searching inquiry.” It was widely expected that the Supreme Court would not get involved until Judge O’Connor delivered his response and then the Court of Appeals ruled on that. Instead, the Supreme Court accepted the case—now known as California v. Texas—for the term that begins Oct. 5.

What’s at stake

“The headline here is that roughly 24 million Americans would lose their health insurance absent the ACA, clearly a wrenching change especially coming during the COVID-19 pandemic and high unemployment,” said Bigelow. “Plus, invalidating the ACA would have other implications.” A few examples: The ACA is the law requiring all health insurance policies (not just those purchased through Obamacare) to include coverage for pre-existing diseases, a universally popular measure. The ACA caps lifetime expenses and allows children up to age 26 (many of whom currently are unemployed) to remain under a parent’s insurance plan. It provides the legal framework for the “innovation center” authority underlying President Trump’s proposal for “most favored nation” pricing of prescription drugs. And the Sunshine Act is included within the ACA as well.

How SCOTUS might decide

Only four justices who previously affirmed the constitutionality of the ACA remain. Each legal case poses different issues, but it is expected all four will again uphold the ACA. Bigelow expects that other four current justices will again vote to invalidate the ACA, although the current case is widely considered to rest on weaker arguments than the earlier ones. “It is presumed that a new justice appointed by President Trump would oppose the ACA. That suggests a 5-4 vote against the ACA is the most likely outcome,” he said.

But there’s a caveat, Bigelow noted: Justice Brett Kavanaugh, though a staunch conservative, has ruled in other cases (including two decided earlier this year) that invalidated clauses are “separable,” allowing the underlying laws to remain in force, and some legal observers speculate he might do so again, affirming the previous Court rulings and making it a 5-4 vote for the ACA.

Another possible outcome is that the Supreme Court might send the case back to the lower courts to hash out (as the Court of Appeals had tried to do). This also would be the effective result if a ninth justice is not confirmed in time to vote on this case, and there is a 4-4 tie vote.

Then what?

If the ACA is, in fact, ruled unconstitutional next June, the scenarios vary depending on the election outcome.

The Trump administration tried to repeal the ACA in Congress and fully supports the court case seeking to invalidate it. Yet the ACA has become more popular over the past three years, and the idea of repealing it without replacing it would seem untenable during and after this pandemic. So, if re-elected, President Trump likely would be forced to come up with a legislative fix – but neither he nor Republicans in Congress have ever framed a credible alternative, and they might end up having to create something very similar to Obamacare with a few cosmetic tweaks. (President Trump has promised to issue an Executive Order that he claims would protect coverage for pre-existing conditions, but it is not clear how that would work.)

If Joe Biden is president, presumably he would push a revised version of the ACA, perhaps instating a nominal tax penalty to satisfy the court that taxation ability is being used, and adding the “public option,” “Medicare for More” (allowing those age 55 to 65 to buy Medicare coverage), and other modifications he has advocated on the campaign trail. He is unlikely to have sufficient support in the Senate to pass the full “Medicare for All” plan advocated by progressives.

“It is worth noting that any replacement legislation, under either Trump or Biden, probably would reinstate the Sunshine Act,” Bigelow said, “but there could be modifications to either expand or contract its scope.”