Judge Reed O’Connor’s unexpectedly sweeping ruling calling the Affordable Care Act unconsitutional late Friday sent shock waves rippling through the healthcare landscape.
The ruling, which will almost certainly be appealed (likely up to the U.S. Supreme Court), would effectively wipe out Medicaid expansion, pre-existing condition protections and could affect a number of hospital payment reforms.
But the decision faces a lengthy appellate process, along with attacks from the left and right alike.
What happens immediately?
The ruling doesn’t have much immediate impact, as it was a declaratory judgment and not an injunction to stop the ACA. The Trump administration confirmed Friday night that the law would stay in place during appeals.
Still, President Donald Trump himself celebrated on Twitter in the early hours of Monday morning.
The DEDUCTIBLE which comes with ObamaCare is so high that it is practically not even useable! Hurts families badly. We have a chance, working with the Democrats, to deliver great HealthCare! A confirming Supreme Court Decision will lead to GREAT HealthCare results for Americans!
— Donald J. Trump (@realDonaldTrump) December 17, 2018
Not all of the administration officials echoed the tone, however, as CMS Administrator Seema Verma tweeted a message of reassurance Friday night, confirming that the exchanges would stay open through Saturday as previously planned.
The recent federal court decision is still moving through the courts, and the exchanges are still open for business and we will continue with open enrollment. There is no impact to current coverage or coverage in a 2019 plan.
— Administrator Seema Verma (@SeemaCMS) December 15, 2018
A day later, however, Verma returned to script, tweeting “Obamacare has been struck down by a highly respected judge.”
Critics decried the timing of the ruling, which dropped on the penultimate day of an already-lagging open enrollment season for 2019. Kaiser Family Foundation put enrollment in the individual market at 17 million in 2016, 15.2 million in 2017 and 14.2 million as of Q1 2018.
Saturday dawned with potential confusion for tens of thousands of Americans looking to enroll at the last minute. The Justice Department had asked O’Connor to hold off on the ruling so that it didn’t affect 2019 enrollment on Healthcare.gov until after enrollment ended Saturday.
He issued his decision one day before. But it’s unclear what effect the ruling will have, if any, on 2019 insurance.
Republicans were in a bind with the timing as well, along with the mounting popularity of the ACA.
In 2018, as protections for pre-existing conditions took center stage in the midterms, Republicans changed tack and hedged their language around the ACA, promising to protect Americans’ coverage despite dozens of attempts at repealing the entire law.
Which players will see the biggest impact?
The decision Friday evening sent ripples through Wall Street with major dips for hospitals and insurers. HCA stock dropped more than 5%, Cigna and Humana each fell 4%, Centene took a 7.5% hit and Molina dropped as much as 13%. Some stocks recovered later Monday morning.
Leerink analysts called Monday a buying opportunity for managed care organizations, along with WellCare and HCA.
While the law touches nearly every aspect of American healthcare, some players will take bigger hits than others.
Hospitals, especially those who serve a disproportionate number of ACA-insured patients, don’t need the further stress on their bottom lines.
America’s Essential Hospitals president and CEO Bruce Siegel called the ruling a “profoundly troubling development,” adding that “the crushing rise in the number of uninsured patients likely to follow this decision, absent a higher court’s reversal, will push [hospitals] to the breaking point.”
Health systems are “deeply disappointed” with O’Connor’s decision, said Rick Pollack, CEO of the American Hospital Association. “The ruling puts health coverage at risk for tens of millions of Americans, including those with chronic and pre-existing conditions, while also making it more difficult for hospitals and health systems to provide access to high-quality care.”
Multiple provider groups urged a stay in the decision until it moves through the appeals process.