States in the Obamacare lawsuit are biting the hand that feeds them

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Obamacare is precarious yet entrenched as 2019 approaches. Even many of the GOP-led states seeking to knock it down in court would be in a real bind should they succeed.

Of the 20 states involved in a high-profile Texas-led lawsuit arguing the Affordable Care Act is unconstitutional, nearly half have already accepted its extra dollars to expand their Medicaid programs or are moving that direction. States don’t have to expand Medicaid under a 2012 Supreme Court decision, but most have found it advantageous because the federal government foots most of the bill.

These states — nine in total — would suddenly be facing a much larger expense for hundreds of thousands of low-income earners newly enrolled in Medicaid under the ACA, should last week’s decision by U.S. District Judge Reed O’Connor rolling back the entire health-care law ultimately stand.

They include Louisiana, North Dakota and West Virginia, along with Arizona, Arkansas and Indiana, three states that expanded Medicaid but with some modifications. In three other states — Maine, Nebraska and Utah — voters approved ballot initiatives adopting expansion.

Yet these states are asking the courts to overthrow not just Obamacare’s protections for people with preexisting conditions – the part of the lawsuit that has gotten the most attention — but also the entire sweeping law, which is now firmly a part of the country’s health-care ecosystem eight years since its passage. More than 12 million people have become eligible for Medicaid since ACA passage, while another 11 million have enrolled in the ACA’s federally subsidized private marketplaces.

“God help us all, because the dark age is not that far from us again,” said Sen. Joe Manchin (D-W.Va.). “It will be worse than before because there won’t be the money to help rural clinics and hospitals.”

Developments in the past week — including the court ruling and slightly lagging marketplace enrollment figures released yesterday by the Trump administration — underscore the political divides dogging Obamacare even though Republicans in Congress and at the state level have embraced some of its major components.

Nearly 8.5 million people signed up for 2019 plans in the 39 states using the HealthCare.gov website (the other states run their own marketplaces), per figures from the Centers for Medicare and Medicaid Services. Enrollment was just 4 percent less than a year ago, due to a last-minute rush that suggests consumers were undeterred by the court ruling, our Washington Post colleague Amy Goldstein reports.

“After lagging by about 11 percent most of the six weeks of open enrollment — a shortened period adopted by the Trump administration a year ago — the more than 400,000 who selected coverage during the final week actually exceeded the year before,” Amy writes.

CMS Administrator Seema Verma seemed unperturbed by the reduced enrollment numbers, saying they merely show new GOP and administration policies to roll back some ACA requirements on insurers and consumers are working.

But if the entire law gets scrapped by the Supreme Court ( we should note, the case still has a long way to go in the legal system), it will quickly become clear the ACA — for whatever its faults — has extended benefits to Americans they’ve now come to expect. Despite their persistent rhetoric against the law, Republicans have found it politically necessary to embrace big parts of it, including its protections for people with preexisting conditions — and, in some states, its Medicaid expansion.

Case in point: West Virginia. Its Republican attorney general, Patrick Morrisey, has joined the lawsuit against Obamacare even though the state embraced its Medicaid expansion, growing its enrollment in the program by nearly one-third.The federal government covers more than 90 percent of the cost of the newly eligible enrollees.

When I asked Morrisey’s office about what striking the ACA would mean for Medicaid recipients, his office provided a statement praising O’Connor’s ruling and discussing premium hikes in the marketplaces — but didn’t mention Medicaid.

“Our nation must move beyond Obamacare, innovate, provide more choices to consumers, and attack the skyrocketing premiums that have caused such pain and hardship on West Virginian and American families,” the statement said.

In some cases, the decisions by state attorneys general to join the anti-ACA lawsuit has put them at odds with their governor. Louisiana’s Democratic governor, John Bel Edwards, moved quickly to expand Medicaid when he took office in 2016. Nearly half a million people have enrolled in Medicaid since then, growing the state’s program by 27 percent.

Edwards hasn’t hidden his disdain for Louisiana Attorney General Jeff Landry (R), who has called the law an “unconstitutional overreach.” Edwards issued a critical statement after last Friday’s decision.

“This was a short-sighted lawsuit, to say the least,” Edwards said in a statement. “I intend to vigorously pursue legislation to protect individuals with pre-existing conditions from losing their health insurance and ensuring the working people of our state aren’t penalized because of this decision.”

 

What to expect after whirlwind ACA ruling

https://www.healthcaredive.com/news/what-to-expect-after-whirlwind-aca-ruling/544527/

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.

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.

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.

 

 

 

 

Health Law Could Be Hard to Knock Down Despite Judge’s Ruling

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Could a federal judge in Texas be the catalyst that finally brings down the Affordable Care Act, a law that has withstood countless assaults from Republicans in Congress and two Supreme Court challenges?

On the morning after Judge Reed O’Connor’s startling ruling that struck down the landmark health law, legal scholars were doubtful.

Lawyers on both sides of previous A.C.A. battles said the reasoning behind this one was badly flawed, notably in its insistence that the entire 2010 law must fall because one of its provisions may have been rendered invalid by the 2017 tax overhaul legislation. Had Congress meant to take such radical action, they said, it would have said so at the time.

Legal experts also noted that the Supreme Court, where most people believe the case is headed, historically has been reluctant to strike down federal laws, particularly those that have become ingrained in the lives of millions of citizens.

For now, the ruling is unlikely to affect the more than 23 million people who get health coverage through the insurance marketplaces set up by the law and the expansion of Medicaid in 36 states. The Trump administration immediately said — despite the president’s gleeful tweets hailing the decision — that it would continue to enforce the law until the appeals process plays out, which could take more than a year. That will ensure that the American health care system, which has been operating under the law for more than five years, will not be thrown into immediate chaos.

Judge O’Connor, who was appointed by George W. Bush to the Federal District Court in Fort Worth, has ruled against laws supporting immigration, transgender and Native American rights. Conservative lawyers are known to choose his district to file cases, hoping he will fire opening salvos that propel their issues through the court system.

The crux of Judge O’Connor’s decision centered on the health law’s requirement that most people have health coverage or pay a tax penalty.

That tax penalty was effectively eliminated when Congress reduced its amount to zero in the tax legislation enacted last year. And once the tax penalty no longer stood, the so-called “individual mandate” was unconstitutional and the entire law had to fall, the judge reasoned in accepting the argument of the 20 states that brought the lawsuit challenging the legislation.

But an array of legal experts said that argument was unsound. Jonathan H. Adler, a conservative law professor at Case Western Reserve University in Cleveland, called that position “simply nonsensical” and said the judge’s conclusion was “hard to justify” and “surprisingly weak.”

He and others pointed to the fact that even though Congress erased the tax penalty, it did not touch the rest of the sprawling health act. A longstanding legal doctrine called “severability” holds that when a court excises one provision of a statute, it should leave the rest of the law in place unless Congress explicitly stated that the statute could not survive without that provision.

In this case Congress’s intention was particularly clear, legal experts said.

“Congress amended one provision of a 2,000 page law and did not touch the rest of the law so it is implausible to believe that Congress intended the rest of the law not to exist,” said Abbe R. Gluck, a health law expert at Yale Law School.

Judge O’ Connor also cited congressional intent, focusing on language from the 2010 law, which underscored the significance of the individual mandate to the entire act. But he largely ignored the 2017 congressional action. In essence, legal scholars said, he looked to one congressional view and not the more recent one.

And in so doing, he opened the door for House Democrats to intervene in successive appeals. On Saturday aides to Representative Nancy Pelosi, who is expected to become the next speaker of the House, said she would move quickly to notify the Trump administration that House Democrats intended to step in to defend the law in the case.

As the legal showdown plays out, efforts to protect the A.C.A. are also underway in the courts. Earlier this year the state attorney general of Maryland sued the Trump administration for attempting to gut the act. The case is pending.

Nicholas Bagley, a health law expert at the University of Michigan, suggested that Judge O’Connor may not yet be done with the case. In a series of tweets on Saturday, Mr. Bagley noted that the judge had not yet addressed a handful of central issues in the suit, nor had he issued a final ruling indicating whether the act should fall immediately. Judge O’Connor could indeed hold onto the case before an appellate court takes it up.

But if he lets the case move forward, a likely timeline, according to many legal experts, is that the case will be taken up by the United States Court of Appeals for the Fifth Circuit in New Orleans this spring. If the Fifth Circuit upholds Judge O’Connor’s decision, the Supreme Court is likely to agree to hear the case in its term that starts in October 2019, with a decision in 2020. If the Fifth Circuit overturns the judge’s ruling and upholds the law, there is a good chance the Supreme Court would decline to even take the case, legal scholars said.

One law professor, Ilya Somin of George Mason University, criticized parts of the opinion, but said he was “a bit less confident about the outcome” because “the history of A.C.A.-related litigation is filled with surprises and failed predictions by experts.”

Among the observations flying about was the notion that the Supreme Court only rarely strikes down federal laws, and it is particularly reluctant to do so when the laws have been in place for years and affect millions of people. In fact, Chief Justice John G. Roberts Jr. wrote in his 2012 opinion upholding the health care law, that the court should err on the side of sustaining federal laws.

“As between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid,” he wrote, quoting Justice Oliver Wendell Holmes Jr., “our plain duty is to adopt that which will save the act.”

The five justices who voted to uphold the law in a landmark 2012 case, including Justice Roberts, are all still on the court.