Overturning the Affordable Care Act during a Pandemic

By: Gordon Chan

The case to overturn the Affordable Care Act (ACA), now called Texas v. California, is scheduled to be considered by the Supreme Court on November 10, just 7 days following the presidential election. The ongoing litigation challenges the ACA’s individual mandate, which requires citizens and residents of the United States to have qualifying health insurance. Those who do not have health insurance must obtain it or pay a financial penalty to the IRS. The individual mandate survived a Supreme Court challenge in 2012, when it was upheld as a constitutional exercise of Congress’ taxing power. However, the Tax Cuts and Jobs Act of 2017 reduced the penalty for not having health insurance to 0. Hence, the law’s constitutionality has been challenged by a number of Republican state attorneys general and other plaintiffs, who claim that the penalty for individual mandate no longer produced revenue for the government and was therefore no longer constitutional.

During the ongoing litigation, the ACA remains in effect. Even so, the possible implications of overturning the ACA during Covid-19 will have complex and far-reaching consequences for the American healthcare system. 

Who is Challenging the ACA?

A group of 18 states, led by Texas, supporting the anti-ACA lawsuit include Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansa, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia (Fig. 1)

Impact of Covid-19 Pandemic on Coverage

The ACA’s reforms affect nearly everyone in some way, and a court decision that invalidated the ACA would have complex and far-reaching impacts throughout the health care system. Since the Covid-19 pandemic began to unravel in March, over 44 million jobless claims have been filed as of June 11. Widespread layoffs amid the pandemic threaten to cut off millions of Americans from their employer-sponsored insurance (ESI). Consequently, the need for coverage of Covid-19 diagnostic testing and treatment has significantly raised the importance of health insurance.

Prior to the ACA, people who have recently lost their jobs would have limited options to obtain health insurance. Those who remain uninsured would receive fewer basic clinical services and would be more likely to experience worse health outcomes. However, thanks to the ACA, many of these newly unemployed Americans who were insured through their employers are able to purchase health insurance through the individual health insurance marketplace. Ten years after the implementation of the ACA, over 5.6 million Americans have purchased coverage in the individual health insurance market. Among older adults ages 50-64, the rate of uninsured dropped 5% between 2013 and 2018. And among ages 18-49, the uninsured rate fell from over 22% in 2013 to less than 14% in 2018 (Fig. 2). If the ACA is reversed during the pandemic, over 23.3 million people would stand to lose coverage and become uninsured.

Health Disparities: Gaps in Coverage

During the ongoing pandemic, job loss has been concentrated among Hispanic and Black workers and workers in service industries. Following the timeline of the deaths of black U.S citizens at the hand of police brutality and corruption, the country’s attention to structural racism has intensified. Racial disparities in policing mirror structural racism in many other systems, including healthcare. In this context, the ACA has played a major role in reducing racial disparities in health insurance coverage. Based on a Kaiser Family Foundation (KFF) analysis of American Community Survey data for the non-elderly population, coverage increased for all racial and ethnic groups following the enactment of the ACA. Among the Black population, the uninsured rate fell from 19.9% to 10.7% between 2010 and 2016 (Fig. 3). With greater access to insurance, and lower out-of-pocket expenses, people are more likely to get medical care and have better health outcomes over the long-term.

Beginning in 2017, and continuing in 2018, coverage gains reversed and rose from 20.7% to 11.5% respectively. Yet despite the large coverage gains for people of color under the ACA, gaps in insurance coverage remain. Between 2010 and 2018, Black people remained 1.5 times more likely to be uninsured than Whites. Looking ahead, the direction that coverage moves in going forward has long term implications for disparities in health access and health outcomes.

Looking Ahead

The ACA provides an invaluable safety net for individuals who have recently lost their jobs due to Covid-19. The Covid-19 pandemic has caused more than 200,000 deaths and there have been over 7 million confirmed cases in the United States. In the current context of the ongoing health crisis, overturning the ACA would be a devastating blow to millions of Americans whose lives are already being disrupted by the economic and health crisis. The very virus that brought about record high unemployment is the same agent that makes greater access to health insurance imperative.

The court ruling against the ACA comes to a head on November 10, this time without Justice Ruth Bader Ginsburg to protect the law. A groundbreaking legal icon, Ginsburg voted to uphold the law in 2012, along with 3 other liberal justices and Chief Justice John Roberts. Without her, the situation becomes more complex. Almost nothing is certain right now except that a ruling against the ACA would be a catastrophe to millions of Americans.