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Covid Relief Laws Hint Congress Aimed to Keep Obamacare Alive

Oct. 30, 2020, 9:47 AM

Republicans may have hurt their own legal case against Obamacare by repeatedly expanding on and amending the signature health law since 2017, most recently in their response to Covid-19.

Relief legislation passed by the GOP-led Congress leveraged the Affordable Care Act’s framework to require health insurance companies to cover Covid-19 testing and vaccines. And a 2019 budget bill repealed three major taxes created by the law.

Those actions provide persuasive evidence in the high court fight threatening the health coverage of millions that Congress never intended to toss out the ACA in its entirety, some health law scholars say.

“You can’t build on the ACA’s protections for the Covid bills if the act doesn’t exist,” said Abbe Gluck, a professor of law and the founding faculty director of the Solomon Center for Health Law and Policy at Yale Law School.

The U.S. Supreme Court will hear legal arguments on the constitutionality of the law on Nov. 10. What Congress intended to do with the ACA is a central line of dispute in the high stakes case, and the pandemic has given supporters of the law a new opportunity to prove it was meant to stay.

Upending Obamacare could cause more than 20 million people to lose their health coverage, and more than 135 million people—which now include millions of Covid-19 survivors—to lose coverage protections for pre-existing medical conditions, according to the Center for American Progress.

Which Congress?

The coalition of mostly Democratic-led states fighting to save the ACA argue Congress never meant to invalidate the entire law when it dropped the tax penalty for those who fail to buy insurance down to $0 in 2017.

The group of Republican states led by Texas and the Justice Department, however, argue the mandate to buy insurance is now unconstitutional without that tax penalty and Congress never intended the ACA to function without it when it passed the law in 2010.

“The text of the statute and the history of the ACA in 2010 unequivocally shows the individual mandate was the crux of the entire design and concept of the Affordable Care Act,” said Robert Henneke, general counsel for the Texas Public Policy Foundation and lead counsel for the individual plaintiffs challenging the law.

Health law scholars, however, say that argument is invalid. Even though Republicans argue Congress didn’t intend the ACA to function on its own without the mandate, subsequent Congresses have acted as if the law was sticking around without it, they say.

“The Constitution does not permit an earlier Congress’s views to trump the views of a later enacting Congress,” Gluck said. “A later Congress has equal power to an earlier Congress and Congress is allowed to change its mind.”

Relying on Obamacare

In the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress expanded the ACA to require insurance companies to cover any Covid-19 vaccines within 15 days of being recommended by a scientific advisory body like the Centers for Disease Control and Prevention. Insurance companies previously had a year before they had to start covering a new vaccine without any cost-sharing, said Christen Linke Young, a USC-Brookings Schaeffer Initiative for Health Policy fellow.

The Families First Coronavirus Response Act, meanwhile, relies on the ACA to define who is “uninsured” and potentially eligible for Medicaid coverage of Covid-19 testing, according to John Cogan Jr., an associate professor of law at the University of Connecticut School of Law.

Congress went further in a 2019 budget bill, repealing the ACA’s tax on medical devices, the 40% “Cadillac tax” on high-cost employer-sponsored health plans, and a tax on insurers that offer fully insured health plans in the ACA marketplaces, the group market, or a public program.

The Cadillac tax wasn’t slated to take effect until 2022, but Congress repealed it in 2019. “That suggests they thought the law was sticking around,” said Katie Keith, a health law professor at Georgetown University.

The Patient-Centered Outcomes Research Institute (PCORI), which was authorized by the ACA, made a similar argument in a friend-of-the court brief to the Supreme Court. In 2019, Congress reauthorized PCORI, provided mechanisms for a decade of additional funding, and amended PCORI’s governing provisions—not through an ACA amendment, but as part of the omnibus 2020 budget agreement,” the nonprofit said.

This is evidence “Congress wanted PCORI to continue operating without regard to the fate of the individual mandate and associated provisions,” the group argued.

But Henneke said Congress’s beliefs about the ACA’s soundness in subsequent years aren’t material to the legal question before the court, which is whether an unconstitutional provision can be severed from the remainder of the law.

The Supreme Court has to look at whether the statute is unambiguous and if Congress would have enacted the law without the unconstitutional provision, he said.

The inquiry should stop at the first question because the ACA is unambiguous—it explicitly describes the individual mandate as “essential"—but, even if the Supreme Court proceeds to step two, the text of the statute and history of the ACA are clear that Congress wouldn’t have enacted the law in 2010 without it, Henneke said.

Five Votes Needed

Regardless of what Congress intended and when, some constitutional law scholars doubt the high court will wipe the ACA off the books.

“I don’t think there’s any real chance the entire law gets struck down,” Josh Blackman, a constitutional law professor at the South Texas College of Law Houston, said. “There really are not five votes in any case to strike down an entire statute.”

If there are, however, the court could put its ruling on hold for the year to give Congress time to come up with a legislative fix, Blackman said.

Justice Samuel Alito posed the idea when the court heard arguments in King v. Burwell, a challenge to Obamacare that was decided in 2015. Blackman doesn’t think it’s something the justices are apt to do, but “it can be done,” he said.

King v. Burwell challenged whether ACA tax credits for federal exchanges extended to states, not whether the ACA is constitutional, which is why law scholars don’t think the court would put a ruling that tosses out the entire ACA on hold.

“I think it’s a lot harder on a constitutional question to say, ‘This is a constitutional violation but we’ll just hold off on having a ruling go into effect for six months,’” Keith said. “They could do it, but I think this is a different enough challenge.”

The consolidated cases are Texas v. California, U.S., No. 19-1019 and California v. Texas, U.S., No. 19-840.

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

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