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President Trump’s war against Obama-era policies has been waged on a number of fronts including the Paris Climate Agreement and the Iran Nuclear Deal. One of Trump’s most vigorous battles has been the repeal of the Affordable Care Act, a comprehensive health care reform law aimed at expanding access to insurance through levying a deterrent tax on those who did not purchase health care coverage. The act has been highly contentious since its enactment, and the legality behind its provisions remains a hotly debated issue in politics to this day.
The Affordable Care Act (ACA), also known as Obamacare, was signed into law in 2010. ACA’s objectives were divided into three primary goals: Provide affordable health insurance to more Americans, expand the Medicaid program, and foster innovative medical care delivery methods. The ACA, in conjunction with the Health Care and Education Reconciliation Act of 2010, was phased in over the course of several years. It allowed the government to reduce healthcare spending without cutting any of the mandatory spending towards Medicare and Medicaid by reforming health care practices. In promoting the cost-efficiency of the act, Obama cited a study performed by the RAND Research Corporation which estimated that widespread use of electronic health records (EHR) could save the federal government $77 billion a year in healthcare spending. Section 4103 of the ACA facilitated this switch by giving preference and encouraging medical practices which use EHRs for their patients.
The act extended healthcare insurance to millions of uninsured Americans. By 2016 the uninsured population had roughly halved in size, with an additional 24 million people obtaining healthcare coverage. The increased coverage was due to two provisions within the ACA, Section 2001 expanded Medicaid eligibility and Section 1001 introduced radical changes to the individual insurance markets. They were funded through a combination of new taxes and cuts in Medicare payment rates. Reports from the Congressional Budget Office (CBO) found that the Affordable Care Act reduced the budget deficit and that any efforts to repeal the ACA would increase it. The CBO reported that repealing the ACA and eliminating insurance coverage provisions would not produce savings for the federal government due to a subsequent increase in other spending and revenue reductions. The ACA was constructed to maximize financial resources while providing necessary coverage to as many Americans as possible.
All citizens and legal residents were required to have health insurance under the ACA, and anyone without coverage was penalized with a fine. The ACA offered everyone the freedom to choose their preferred form of insurance from employer-based insurance, Medicare, expanded Medicaid, private insurance, and health insurance exchanges with possible subsidies. But the most popular mandates within the ACA included requiring insurers to accept all applicants without a surcharge based on pre-existing conditions and allowing children to stay on their parents’ health insurance until the age of 26.
Despite these benefits, the Affordable Care Act faced scrutiny before and after its passage through Congress. Political opponents deemed the ACA to be unconstitutional on a myriad of partial bases, and the Supreme Court granted certiorari to three cases against the ACA. National Federation of Independent Business v. Sebelius became a landmark case in determining the constitutionality of the individual mandate, the provision which imposed tax penalties on those who did not comply with purchasing health insurance.
The individual mandate system is a necessary component in ensuring that everyday Americans receive healthcare coverage. A study conducted by the Urban Institute found that the individual mandate would increase the insured population by 27.8 million. Expanding healthcare coverage would also cause uncompensated medical spending to fall from $70 billion to $27 billion. It would also stimulate the economy as spending by individuals would increase from $340 billion to $370 billion. In total federal spending on healthcare would rise 4.5 percent without the reform. The CommonWealth Fund reported that eliminating the individual mandate would cause premiums for most individual insurance markets to increase by 3% to 13%. Aside from the individual mandate’s positive economic implications, the system provides millions of Americans in need with coverage to protect them and their families in times of sickness and in health.
However, challengers posit that no enumerated power justified the mandate. The Commerce Clause of Article I, Section 8 of the Constitution simply allows Congress to regulate existing economic activity. The individual mandate was said to force people to engage in economic activity against their will. A federal lawsuit was filed, and Florida state’s Attorney General Bill McCollum brought the suit to the federal District Court for the Northern District of Florida the same day the act was signed into law. The suit claimed that the ACA violated the Commerce Clause (Art. I, Sec. 8, Cl. 1) as well as the Taxing and Spending Clause (Art. I, Sec. 8, Cl. 3) by exceeding Congress’ ability to tax. It also alleged that the ACA violated the Tenth Amendment by compelling states to follow federal regulations. Judge Roger Vinson ruled that the individual mandate exceeded the powers vested in Congress by Article I. Vinson also maintained that the mandate could not be “severed” from the Affordable Care Act, and thus struck down the entirety of the act.
The federal government appealed the decision, and the case went to the 11th Circuit Court of Appeals. The appellate court upheld that the individual mandate was unconstitutional but found the mandate to be severable, i.e., could be struck down without invalidating the remainder of the ACA. This decision eliminated the portions of the ACA which imposed taxes on those who did not apply for healthcare coverage, but retained the sections that reformed medical practices and required insurance companies to cover pre-existing conditions. The government then petitioned for the US Supreme Court to review the rulings. On June 28th the Supreme Court overturned the holdings of the Eleventh Circuit in a 5-4 decision. Chief Justice John Roberts wrote the majority opinion, which stipulated that the individual mandate did not fall within Congress’ Commerce Clause or Necessary and Proper Clause authorities. The mandate did not regulate existing commercial activity. Instead, Roberts said, it compelled individuals to become active in commerce through mandating that they purchase health care coverage. Roberts held that the individual mandate was a legitimate use of Congress’ taxing power under Article I, distinguishing the penalty as a tax. The Court also declared the cutting of Medicaid funding to states that refused to expand the ACA program to be a form of coercion, and deemed the expansion to thus be voluntary.
Despite the Supreme Court’s rulings, the Trump campaign pushed for further condemnation of the Affordable Care Act in a bid to secure a victory over Democrats and strip the central policies of the Obama administration. The Trump administration, along with 18 Republican state attorney generals, is once again challenging the ACA’s constitutionality in the case California v. Texas. In 2017, Congress passed a tax relief bill known as the Tax Cuts and Jobs Act. The individual mandate was essentially removed as the tax penalty was reduced to $0. This “zeroing out” of the penalty saved the federal government an estimated $300 billion but premiums increased for individual consumers. In February of 2018 Texas led a 19 state coalition in a federal lawsuit in the US District Court for the Northern District of Texas. They challenged the ACA’s constitutionality following the elimination of the tax, claiming that the individual mandate was a central provision in the ACA and its Congressional removal meant it could no longer withstand legal grounds. The US Department of Justice conceded, saying that certain provisions such as the protection of those with pre-existing conditions were contingent on the individual mandate and were therefore invalid. Additionally, the presiding judge, Reed O’Connor, held that the individual mandate was an inseverable part of the ACA whose removal made the entirety of the act unconstitutional. The Fifth Circuit Court issued its ruling on December 18th, 2019. In a 2-1 decision, the Court affirmed that the elimination of the individual mandate caused portions of the ACA to be unconstitutional.
With the ever-pervasive debates about healthcare, this decision will mark a political victory for either Democrats or Republicans but even more importantly, for the lives of millions of Americans. If the ACA were to be successfully stricken down, the amount of uninsured Americans would increase by 69 percent. This would cause a rise in uncompensated medical care by 74 percent, costing roughly $58 billion. Medicaid/CHIP coverage would exclude 15.5 million people and young adults would no longer be covered under their parents’ insurance until the age of 26. Insurance providers would be able to discriminate based on health status and either upcharge or reject coverage for those with pre-existing conditions. Those in certain work industries could be charged with higher premiums, insurers could reimpose cost sharing for preventative services, and medicare beneficiaries would also face higher prescription costs. The major changes following a possible elimination of the ACA would be disruptive and chaotic to the very systems that support the lives of millions of Americans.
The repeal of the ACA proves to have some benefits, although they are limited in number. The elimination would boast tax cuts with top 0.1% of income earners enjoying a cut averaging about $198,000. However, the tax cuts for those making $200,000 and above would cost the federal government about $30 billion in 2020. While the loss of coverage would jeopardize the lives of low and moderate-income Americans, those at the top would reap the benefits, further widening the wealth gap.
With the conservative majority in the Supreme Court and the newly elected Democrat Joe Biden, the decision is bound to spark dispute and conflict between the judicial and executive branches. A matter of life and death weighs in the hands of nine Supreme Court Justices and the battle for affordable healthcare coverage is far from over.