One of the central questions of the 2020 Presidential campaign was posed last week before the Court of Appeals for the Fifth Circuit, in New Orleans, to a lawyer for the Trump Administration, who didn’t even pretend to have an answer. A three-judge panel was hearing the appeal of a ruling by Reed O’Connor, a Texas district-court judge, that the Affordable Care Act, or Obamacare, was unconstitutional in its entirety—an opinion that the Administration has endorsed. O’Connor had ordered that the government cease implementing or enforcing all aspects of the A.C.A., including its protections for people with preëxisting conditions, its ban on lifetime caps, its expansion of Medicaid and coverage for young adults on their parents’ plan, and its support for the treatment of addiction. The order could cost tens of millions of people all or much of their coverage, and throw the health-care system, which accounts for a fifth of the economy, into chaos. But O’Connor, in what Judge Jennifer Elrod, of the Fifth Circuit, described with no apparent irony as a “modest” act, had stayed his own order, pending appeals. Here, now, was the first appeal. So, if the stay is lifted, Elrod asked, “What’s the government planning to do?”
As the lawyer, August Flentje, struggled to answer (“This is a very complicated program—multifaceted, obviously”), it became clear that Republican opposition to the A.C.A. remains a project of blind destruction. One of President Trump’s few health-care initiatives, on drug prices, fell into disarray last week, with one measure defeated in court and another abandoned. Otherwise, he has mostly complained that Democrats want to extend care to, among others, undocumented people. His almost pathological need to undo President Obama’s legacy can be added to the mix; the restraint sometimes said to characterize conservatism can be subtracted. And there is a growing conviction among the A.C.A.’s opponents that the current Supreme Court, given the addition of Neil Gorsuch and Brett Kavanaugh, will back them up.
They may be right; the threat that this case, Texas et al. v. United States, presents to Obamacare should not be underestimated, especially as it is likely to reach the Court in the heat of the 2020 campaign. The case was brought by twenty states whose most distinct common quality is their redness. Maine and Wisconsin dropped out of the suit after the 2018 midterm elections, when their Republican governors were replaced by Democrats. When the Trump Administration declined to defend the law, a group of mostly blue states—currently twenty-one—got permission from the district court to do so. They were joined by a lawyer for the Democratic-controlled House of Representatives. When Kurt Engelhardt, another of the appeals judges, pointedly asked that lawyer why the Senate hadn’t sent someone to defend the law, he replied that the Senate “operates differently.” It is, after all, led by Mitch McConnell, not Nancy Pelosi.
The complaint concerns the so-called “individual mandate.” When the A.C.A. was enacted, in 2010, it directed every American to get insurance or face a penalty, which was calculated on a sliding scale (and dropped altogether for low-income people; other groups, such as prisoners, were exempt). The constitutionality of the mandate was the subject of an earlier challenge to the A.C.A., but Chief Justice John Roberts wrote an opinion classifying the penalty as a tax, which Congress has the power to levy. Trump’s 2017 tax package, however, reduced the penalty to zero. For the A.C.A.’s opponents, this led to a wild surmise: if the mandate had survived because the penalty was a tax, the absence of a tax might make the mandate unconstitutional. That point might seem academic—constitutional or not, the mandate is, for all practical purposes, already gone, now that there is no penalty for ignoring it. But Texas et al. makes a far more radical claim: The phantom mandate is not only unconstitutional but “inseverable” from the rest of the law. If it is invalid, then all nine hundred and six pages of Obamacare are also invalid.
This argument is as senseless as it is ruinous. It’s like saying that the 2017 tax bill was a stealth total repeal of the A.C.A., something that even leading Republicans denied at the time. And yet at least two of the judges, Elrod and Engelhardt, appeared inclined to accept it. The main issue for them seemed to be just how much of Obamacare to trash.
On that question, too, the Administration has been erratic. Initially, it argued that the court should invalidate only certain provisions, such as preëxisting-condition protections—a major feature that Trump has elsewhere claimed to like. Then, in March, the Administration said that it agreed with the Texas ruling: burn it all. Two months later, though, it argued that, while every word of the law was invalid, any relief that the lower court granted should be limited to damages suffered by Texas and the other states, without defining what those damages might be. This led to utter confusion in the oral arguments: Would there be different versions of the law for different states? Which provisions might the government want to keep? (“You would leave in place the calorie guides?” Judge Elrod asked.) Flentje, the Justice Department’s lawyer, told Elrod that, really, “things don’t need to get sorted out until there’s a final ruling”—that is, from the Supreme Court.
Obamacare has reduced the number of uninsured Americans by twenty million and, while the system is imperfect, premiums are more manageable than is often reported. But, as the Texas case suggests, it can still all be undone. And there is much more to do; the United States has not achieved universal coverage. All the Democratic Presidential front-runners share that goal, but they have what are sometimes sharply diverging proposals for getting there. Vice-President Joseph Biden, Mayor Pete Buttigieg, of South Bend, and former Representative Beto O’Rourke, of El Paso, want to build on the A.C.A. and make Medicare available to all as a public option, alongside private insurance. Senator Bernie Sanders, of Vermont, has a Medicare for All bill that aims to displace private insurance, and in most cases make it unlawful, leaving a public option as the only real option. Senators Elizabeth Warren and Kamala Harris have signed on to Sanders’s plan, although Harris has at times tried to downplay the impact on private insurance.
The next Democratic debates, which will be held on July 30th and 31st, may sharpen the candidates’ positions or further polarize them. The Democrats need a plan to protect Americans’ health coverage. And they need a plan to win in 2020. Those might even be the same thing. ♦
Ruling finds employers can’t withhold contraception coverage, in fresh blow to administration’s deregulatory push
A federal appeals court unanimously upheld a lower court decision blocking a revised set of Trump administration rules allowing employers with religious or moral objections to opt out of providing their workers with birth-control coverage.
The ruling late Friday by the Third Circuit Court of Appeals is a blow to the administration, which had prioritized weakening an Obama-era mandate requiring employers to offer free contraceptive health coverage to their employees—a top concern for Catholic and antiabortion groups. The court’s decision, which applies nationwide, makes it much less likely that the administration will be able to fashion an exemption acceptable to the courts.
A spokeswoman for the Department of Health and Human Services didn’t immediately return a request for comment. The agency is expected to appeal the ruling to the Supreme Court.
The Trump administration’s rules, issued in November by the DHHS, would have exempted a broad swath of employers from the mandate contained in the Affordable Care Act. Those rules represented a second attempt by Trump officials to create such an exemption, after a first set was blocked in 2017.
Judge Patty Schwartz, writing for the court, said the Affordable Care Act plainly states women must be provided preventive health services. “Nowhere in the enabling statute did Congress grant the agency the authority to exempt entities from providing insurance coverage for such services,” she wrote.
That makes birth control another realm in which courts have halted the Trump administration’s deregulatory agenda. The administration has lost more than 90% of lawsuits brought over its deregulation efforts, according to New York University School of Law’s Institute for Policy Integrity.
“Yet another court has stopped this administration from sanctioning discrimination under the guise of religion or morality,” said Louise Melling, deputy legal director at the American Civil Liberties Union.
The Obama administration issued the birth-control mandate in 2011 as part of its broader implementation of the Affordable Care Act.
In response to court challenges by some Catholic employers that object on religious grounds to most forms of birth control—along with other religious employers with specific objections to emergency contraception—Obama health officials created a workaround allowing female workers whose employers objected to covering contraception to obtain it directly from insurers.
Religiously affiliated employers, however, considered that insufficient because the insurance plans they sponsored were still being used as a vehicle for providing birth-control coverage.
The Trump administration’s changes sought to exempt them from the requirement completely. The administration also added moral objections to religious ones as grounds for an exemption.
The Federal Communications Commission on Wednesday unanimously voted to move forward with plans for a $100 million pilot program to promote telemedicine services.
The FCC voted to adopt a notice of proposed rulemaking for a program dubbed the Connected Care Pilot.
“The future of healthcare is connected care, and this is the future that I want the FCC to support,” agency Chairman Ajit Pai said at an open meeting Wednesday. “The $100 million budget we propose for the Connected Care Pilot program is a smart investment for us and for the country.”
Unlike existing FCC healthcare programs, such as the agency’s Rural Health Care Program, the proposed pilot would focus on projects that connect patients with healthcare services directly and outside of a hospital.
With the vote, the FCC formally proposed the Connected Care Pilot and said it plans to seek public comment on what kinds of healthcare and broadband service providers should be eligible for the program, as well as what goals and metrics the program should set and how the agency should gather data during the program.
Telemedicine has provided benefits for patients with diabetes, opioid dependency and post-traumatic stress disorder, among other conditions, Carr said during the meeting. He cited data from the U.S. Veterans Affairs Department, which found a remote patient-monitoring program had reduced days of inpatient care by 25% and hospital admissions by 19%.
The VA’s remote patient-monitoring program cost $1,600 per patient, compared with $13,000 per patient for traditional care, Carr said.
“Given the significant cost savings and improved patient outcomes associated with these pilots, we should align public policy in support of this movement in telehealth,” Carr said, adding that data from the FCC’s Connected Care Pilot will likely be able to help inform future policies to promote telemedicine. “It’s the healthcare equivalent of moving from Blockbuster to Netflix.”
Providers largely expressed excitement about the program last year, though some warned the FCC needed to establish more detailed metrics for success. The FCC is seeking feedback on what metrics and data to collect as part of its upcoming request for comment on the program, according to its notice of proposed rulemaking.
“There are many ways to pitch the benefits of broadband, but (I’m) hard-pressed to think of one more powerful than telemedicine,” Pai said at the meeting.
Despite the unanimous vote, commissioners did raise some concerns.
FCC Commissioner Michael O’Rielly questioned budgeting for the program. As written, the proposed Connected Care Pilot would be funded by the Universal Service Fund, a fund managed by the FCC that collects fees from telecommunications companies. The FCC uses these contributions to subsidize services for low-income and rural areas.
O’Rielly said that the FCC has not proposed including the Connected Care Pilot within any of the Universal Service Fund’s existing programs.
“However, $100 million in funding must come from somewhere,” he said, suggesting the program will result in telecommunications companies being asked to pay larger contributions to the USF. “I appreciate Commissioner Carr for the work on the (Connected Care Pilot), and look forward to more discussions raised in context of the larger USF.”
Democratic front-runner Joe Biden on Monday unveiled a health plan that’s intended to preserve the most popular parts of Obamacare — from Medicaid expansion to protections for patients with preexisting conditions — and build on them with a new government-run public insurance option.
Biden would also empower Medicare to directly negotiate drug prices, allow the importation of prescription drugs from abroad and extend tax credits to help tens of millions of Americans buy lower-priced health insurance.
The plan — which the campaign says will cost $750 billion over a decade, to be paid for by reversing some of the Trump administration’s tax cuts — is less transformative than the “Medicare for All” proposal advanced by Sen. Bernie Sanders (I-Vt.) and supported by some other Democrats, which would effectively do away with private insurance and shift all Americans to government-run health coverage.
“I understand the appeal of Medicare for All,” Biden said in a video posted Monday morning. “But folks supporting it should be clear that it means getting rid of Obamacare. And I’m not for that.”
Progressives have argued that Democratic candidates should aim for Medicare for All because it protects the party from starting with — and settling for — a more incremental compromise. Democrats and former President Barack Obama previously supported a public option that could compete with private health plans before dropping it as part of negotiations around the Affordable Care Act.
On a call with reporters on Sunday, campaign staff stressed that Biden wouldn’t settle for a watered-down compromise as president and that his plan would help 97 percent of Americans get health coverage. Nearly 5 million Americans in states that haven’t expanded Medicaid would get premium-free access to Biden’s new public option, for instance.
“We’re starting with the Affordable Care Act as the base and going to insist on the elements that we sought last time,” said a senior Biden campaign official. “And we’ll get them this time.”
Biden’s public option plan drew fire from Republicans and health care industry lobbyists who said that the proposal went too far.
The Biden administration also would allow all shoppers on the individual insurance market to qualify for premium tax credits, which are currently capped at four times the federal poverty level, or nearly $50,000 for an individual. Undocumented immigrants would be newly allowed to purchase coverage in the ACA marketplaces, although they wouldn’t be eligible for federal subsidies, a campaign official said.
Speaking with reporters, campaign staff slammed the Trump administration’s efforts to strike down the ACA in court and also addressed Biden’s differences with rival candidates. Biden on Friday suggested that there would be “a hiatus of six months, a year, two, three” that would put patients at risk if Democrats pursued Medicare for All — a claim that Sanders swiftly attacked as “misinformation.”
In response to POLITICO’s questions, Biden’s campaign said the former vice president was emphasizing the need for immediate action.
“We can’t afford the years it will take in order to write and maybe pass Medicare for All,” a spokesperson wrote in an email. “A stop in progress is unacceptable. That’s why the Biden Plan builds on Obamacare and works toward achieving universal coverage as soon as possible.”
Health policy experts said that Biden’s coverage plan appears to be more politically feasible than Sanders’ proposal.
“Building on the ACA is the quickest way to get more people insured and improve affordability, while not taking on any powerful health industry group or disrupting coverage for those who already have it,” said Larry Levitt, executive vice president of health policy for the Kaiser Family Foundation. But incremental improvements to the ACA would leave “an inefficient and costly health care system in place,” Levitt added, preserving high prices and high deductibles for the roughly 160 million Americans with employer-based health coverage.
But even Democrats’ incrementalist approaches face deep opposition from a well-funded health industry opposed to expanding government-backed health insurance.
“Vice President Biden’s proposal for a new government insurance system through a ‘public option‘ would undermine the progress our nation has made and ultimately lead our nation down the path of a one-size-fits-all health care system run by Washington,” said Lauren Crawford Shaver, executive director of the Partnership for America’s Health Care Future, in a statement released Monday morning. Shaver— whose group includes dozens of major associations, including hospital lobbyists— pointed to studies that hospitals would lose revenue if Medicare was expanded.
Republicans also attacked Biden’s plan, resurrecting arguments used to bash the ACA. “Obamacare 2.0: Because it worked so great the first time,” tweeted RNC spokesperson Elizabeth Harrington, pointing to the troubled rollout of the online insurance marketplaces, government coverage mandates and other implementation challenges.
Meanwhile, some Wall Street analysts were skeptical of Biden’s public option proposal, arguing the policy was flawed.
“We suspect that provision is unlikely to be implemented, as it would allow employers to ‘dump’ the highest cost patients into exchanges,” wrote Raymond James in an investor’s note Monday morning.
Biden also announced new ideas to combat the nation’s high drug prices. Pointing to lessons learned from his signature cancer initiative — which announced on Monday it was suspending operations because of Biden’s campaign — the former vice president says he’ll have the Department of Health and Human Services establish an independent review board that will link the price of new specialty drugs to the average price in other countries. His plan also calls for capping most drug price increases at the rate of inflation.
Meanwhile, Biden would seek to expand access to abortion and contraception, reiterating his recent calls — like those of other Democratic candidates — to enshrine Roe v. Wade in federal law and restore federal funding for Planned Parenthood.
Biden’s plan also takes aim at health care providers, suggesting that he’ll try to tackle problems like unexpected large medical bills and health care market concentration, although the details released by the campaign are sparse. Biden also would double investment in community health centers, arguing that the centers help reach underserved populations.
Campaign staff said Biden would soon announce additional proposals to combat gun violence, improve rural health and address other health care initiatives.
Shares of major health insurers and other healthcare companies surged July 11 after the Trump administration yanked a plan to curb drug rebates. The healthcare rally helped push the Dow Industrial Average to 27,088 — its highest close ever.
UnitedHealth Group led the Dow to its all-time high, according to The Wall Street Journal. UnitedHealth climbed 5.5 percent July 11 to $261.16 per share.
Shares of major pharmaceutical companies, including Merck, Pfizer and Eli Lilly, lost ground on July 11, hampering the Dow’s climb, according to TheStreet.
“Pharma is getting absolutely shellacked,” Jamie Cox, managing partner for Harris Financial Group, told TheStreet. “I think being in the crosshairs of both parties in advance of an election year is definitely not a good place to be. It’s the one area where Democrats and Republicans can agree-they can beat up on pharma and there’s no negative repercussions.”
The S&P 500 also reached a record July 11, trading 0.2 percent higher. In the S&P 500, Cigna jumped 9.2 percent to $175.34 per share, while shares of CVS Health climbed 4.7 percent to $57.97. However, pharmaceutical companies and biotechnology firms broadly declined, according to The Wall Street Journal.