The U.S. District Court for the Northern District of Texas will soon decide a case brought by 20 Republican attorneys general that seeks to undo the entire Affordable Care Act (ACA). If successful, the case would cause more damage than the “repeal and replace” bills that galvanized Americans’ attention last year.
Invalidating the ACA would eliminate the law’s pre-existing condition protections, all subsidies for low- and middle-income Americans, Medicaid expansions that 31 states and Washington, D.C. have already implemented, and hundreds of other provisions that underpin today’s health care system. These clear and devastating consequences should be front and center as the court rules on this case.
In the 2017 Tax Cuts and Jobs Act, Congress set the penalty for failing to comply with the ACA’s individual mandate to $0 beginning in 2019. The attorneys general claim that this change means that the ACA’s mandate is not a tax, and therefore is no longer constitutional. But the attorneys general don’t end there. They argue that the mandate cannot be separated from the rest of the law, so invalidating the mandate means the entire law must be struck down. The Trump administration agrees that the mandate is unconstitutional — but argues that the court should invalidate “only” the law’s critical protections for people with pre-existing conditions.
We are economists, so we cannot address the legal questions. But we know what would happen if the court eliminated the ACA’s protections for people with health problems or invalidated the law entirely. The Urban Institute estimates that 17.1 million more people would become uninsured in 2019, a 50 percent increase in the number of uninsured.
A decision for the plaintiffs would go beyond coverage losses. The ACA is complex and touches virtually every area of health care. Consumers and providers have relied on it for over eight years. Invalidating the law would eliminate extensions of coverage for those with employer insurance or Medicare, including preventive services with no cost-sharing, dependent coverage for young adults, and closure of the Medicare “donut hole” that lowers prescriptions costs for seniors. It would throw the Medicare payment system into chaos and would require states to change the systems they built for determining Medicaid eligibility. It would damage a broad swath of the American economy.
Eliminating pre-existing condition protections alone would drag the individual insurance market back to when coverage was extremely costly or altogether inaccessible. Estimates suggest that between 50 and 129 million Americans under age 65 have a pre-existing health condition — that’s a population larger than the combined residents of California, Texas, Florida, New York, Pennsylvania and most of Illinois. If the ACA’s protections were voided, individual market insurers would charge very high premiums or refuse coverage altogether, leaving millions of people with serious conditions without access to affordable care.
Eliminating “just” the pre-existing condition protections, as the Trump Administration advocates, would also make it impossible to simply implement individual market subsidies, which make premiums and cost-sharing affordable for 8 million low- and middle-income people. Without the insurance regulations requiring standardized pricing, it would become prohibitively costly to determine the second-lowest priced plan for each applicant, and thus nearly impossible to compute a subsidy. Eliminating pre-existing condition protections, as the Trump Administration argues, would push many people with health needs out of the market and is tantamount to eliminating assistance that has made health coverage affordable for millions of Americans.
It is disingenuous to conclude that a law as broad as the ACA cannot stand without the individual mandate penalties. And, because insurers across the country are already agreeing to sell policies in the ACA marketplaces in 2019, we know that protections for people with pre-existing conditions can also continue without the mandate. An injunction of all or part of the law would cause far more extensive and unnecessary damage, much of it to modest income families and the sick.
Blumberg is an Institute Fellow at the Urban Institute’s Health Policy Center. Glied is the dean and professor of public service at New York University.