Tagged Tax Penalties

KHN’s ‘What The Health?’: Could The ACA Really Go Away?


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The Affordable Care Act was back in court again this week — this time before a three-judge panel at the 5th Circuit Court of Appeals in New Orleans.

A lower court ruled last December that the entire ACA is now unconstitutional because Congress in its 2017 tax bill eliminated the tax penalty for failing to maintain health insurance. It appeared that two of the three judges — both appointed by Republicans — seemed sympathetic to the arguments made by the plaintiffs, mostly attorneys general from Republican-led states.

Meanwhile, President Donald Trump on Wednesday signed an executive order calling for major changes in how the government pays for care for people with kidney disease, including making it financially easier for people to donate kidneys.

This week’s panelists are Julie Rovner from Kaiser Health News, Joanne Kenen of Politico, Kimberly Leonard of the Washington Examiner and Alice Miranda Ollstein of Politico.

Among the takeaways from this week’s podcast:

  • Many people who have employer-based insurance and don’t get coverage from the ACA don’t realize that key protections they now enjoy come from that law. These include provisions such as allowing adult children to stay on their parents’ plan until age 26 and barring insurers from using annual coverage caps or lifetime limits.
  • The legal challenge to the ACA by conservative states is a real threat to the law, but the case could still be resolved in a wide variety of ways. It is likely, however, to be appealed to the Supreme Court at some point.
  • The Trump administration’s plan to revamp how kidney patients get care appears to have satisfied many different stakeholders and is being widely hailed — except by the two giant firms that profit from clinic-based kidney dialysis and the status quo.
  • The administration this week had two setbacks on its efforts to slow the rise in prescription drug costs. A court, ruling on procedural grounds, set aside the government’s plan to require drugmakers to add prices to television ads. Also, the administration announced it is shelving its rule that consumers get some of the rebates from drugmakers that pharmacy benefit managers negotiate for insurers.
  • The legal challenge to the administration’s rule that would restrict doctors and other health professionals who receive Title X federal family planning grants from referring women for an abortion has created chaos among those health care providers because the rules have been on and off again. But for groups supporting the right to an abortion, time is the name of the game. They hope to run out the clock and elect a different president in 2020.

Also this week, Rovner interviews University of Michigan law professor Nicholas Bagley about the latest legal threat to the ACA.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read too:

Julie Rovner: The Washington Post’s “Hospices Go Unpunished for Reported Maggots and Uncontrolled Pain, Watchdog Finds,” by Christopher Rowland

Joanne Kenen: The Los Angeles Times’ “Trump Officials Tell One Court Obamacare Is Failing and Another It’s Thriving,” by Noam Levey

Alice Miranda Ollstein: CNN’s “Exclusive: Joe Biden on Obamacare and Medicare for All: ‘Starting Over Would Be, I Think a Sin,’ by Eric Bradner

Kimberly Leonard: Vox’s “Why I Gave My Kidney to a Stranger — and Why You Should Consider Doing It Too,” by Dylan Matthews

And

Fox News’ “ I’m Becoming a Liver Donor for the Sister I Love, So She Can Live a Long and Healthy Life,” by Ed Henry

To hear all our podcasts, click here.

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Federal Appeals Court Takes Up Case That Could Upend U.S. Health System

The fate of the Affordable Care Act is again on the line Tuesday, as a federal appeals court in New Orleans takes up a case in which a lower court judge has already ruled the massive health law unconstitutional.

If the lower court ruling is ultimately upheld, the case, Texas v. United States, has the potential to shake the nation’s entire health care system to its core. Not only would such a decision immediately affect the estimated 20 million people who get their health coverage through programs created under the law, ending the ACA would also create chaos in other parts of the health care system that were directly or indirectly changed under the law’s multitude of provisions, such as calorie counts on menus, a pathway for approval of generic copies of expensive biologic drugs and, perhaps most important politically, protections for people with preexisting conditions.

“Billions of dollars of private and public investment — impacting every corner of the American health system — have been made based on the existence of the ACA,” said a friend-of-the-court brief filed by a bipartisan group of economists and other health policy experts to the 5th Circuit Court of Appeals. Upholding the lower court’s ruling, the scholars added, “would upend all of those settled expectations and throw healthcare markets, and 1/5 of the economy, into chaos.”

Here are five important things to know about the case:

It was prompted by the tax bill Republicans passed in 2017.

The big tax cut bill passed by the GOP Congress in December 2017 eliminated the penalty included in the ACA for failure to maintain health insurance coverage. The lawsuit was filed in February 2018 by a group of Republican attorneys general and two governors. They argued that since the Supreme Court had upheld the ACA in 2012 specifically because it was a valid exercise of Congress’ taxing power, taking the tax away makes the entire rest of the law unconstitutional.

Last December, Judge Reed C. O’Connor agreed with the Republicans. “In some ways the question before the court involves the intent of both the 2010 and 2017 Congresses,” O’Connor wrote in his decision. “The former enacted the ACA. The latter sawed off the last leg it stood on.”

State and federal Democrats are defending the law.

Arguing that the rest of the law remains valid is a group of Democratic attorneys general, led by California’s Xavier Becerra.

“Our argument is simple,” said Becerra in a statement last Friday. “The health and wellbeing of nearly every American is at risk. Healthcare can mean the difference between life and death, financial stability and bankruptcy. Our families’ wellbeing should not be treated as a political football.”

The Democratic-led House of Representatives has also been granted “intervenor” status in the case.

The Trump administration has taken several positions on the lawsuit.

The defendant in the case is technically the Trump administration. Traditionally, an administration, even one that did not work to pass the law in question, defends existing law in court.

Not this time. And it is still unclear exactly what the administration’s position is on the lawsuit. “They have changed their position several times,” Sen. Chris Murphy (D-Conn.) told reporters on a conference call Monday.

When the administration first weighed in on the case, in June 2018, it said it believed that without the tax penalty only the provisions most closely connected to that penalty — including requiring insurers to sell policies to people with preexisting conditions — should be struck down. The rest of the law should stay, the Justice Department argued.

After O’Connor’s ruling, however, the administration changed its mind. In March, a spokeswoman for the Justice Department said it had “determined that the district court’s comprehensive opinion came to the correct conclusion and will support it on appeal.”

Now it appears the administration is shifting its opinion again. In a filing with the court late last week, Justice Department attorneys argued that perhaps the health law should be invalidated only in the GOP states that are suing, rather than all states. It is unclear how that would work.

Legal scholars — including those who oppose the ACA — consider the case dubious.

In a brief filed with the appeals court, legal scholars from both sides of the fight over the ACA agreed that the lawsuit’s underlying claim makes no sense.

In passing the tax bill that eliminated the ACA’s tax penalty but nothing else, Congress “made the judgment that it wanted the insurance reforms and the rest of the ACA to remain even in the absence of an enforceable insurance mandate,” wrote law professors Jonathan Adler, Nicholas Bagley, Abbe Gluck and Ilya Somin. Bagley and Gluck are supporters of the ACA; Adler and Somin have argued against it in earlier suits. “Congress itself — not a court — eliminated enforcement of the provision in question and left the rest of the statute standing. So congressional intent is clear.”

It could end up in front of the Supreme Court right in the middle of the 2020 election.

Depending on what happens at the appeals court level, the health law could be back in front of the Supreme Court — which has upheld the health law on other grounds in 2012 and 2015 — and land there in the middle of next year’s presidential campaign.

Democrats are already sharpening their rhetoric for that possibility.

“President Trump and Republicans are playing a very dangerous game with people’s lives,” Senate Minority Leader Chuck Schumer told reporters on a conference call Monday.

Murphy said he is most concerned that if the lower court ruling is upheld and the health law struck down, Republicans “won’t be able to come up with a plan” to put the health care system back together.

“Republicans tried to come up with a replacement plan for 10 years, and they couldn’t do it,” he said.