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States are Preparing for an Invalidation of the ACA

November 26, 2019

By the end of 2020, a group of 5th Circuit Court judges is expected to make a decision to either invalidate the Affordable Care Act as unconstitutional or uphold it. Given the severity of this decision, the ruling could face legal challenges and end up in the Supreme Court. 

 

If the ACA is indeed terminated, it's going to cause complete chaos in the healthcare market. The Trump administration has acknowledged this issue and stated that it will stay a ruling to overturn it and leave the law in place until a new solution is created and approved. 

“Eliminating the ACA would be a major step backward for the millions of people who gained affordable health care coverage this decade,” John Holahan, Institute Fellow at the Urban Institute, said earlier this year. “Without access to the ACA’s health and financial benefits, more low- and middle-income people would face higher financial burdens and less access to necessary medical care.”

Some states will see a more distinct impact, and many of them are stating to take precautions that will diminish the blow and uphold some of the ACA's protections. 

“States should certainly be thinking about contingency plans,” Nicholas Bagley, a professor at the University of Michigan law school told the Wall Street Journal. “Coming up with reasonable contingency plans will take time.”

How could states possibly prepare for such a blow? Continue reading to learn more about their tactics. 

 

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1. Protecting Pre-existing Conditions

Pre-existing conditions are among the top concerns in regards to the ACA repeal. Understandably so, because without protecting, those with pre-existing conditions could be looking at unreliable and expensive healthcare. At least 13 states have taken steps to ensure protection. 

2. State-level Individual Mandates

The Trump administration's move to reduce the fine for not having health insurance to $0, essentially eliminating the individual mandate, is what set the current legal challenge into motion. Though residents may not face a federal penalty for not having insurance, they may face some consequences at the state level. 

3. Protecting Essential Health Benefits

The ACA specified ten necessary health benefits insurance plans would be required to cover. However, exemptions were made for short-term health insurance plans. As the Trump administration has extended the allowed duratio of such plans, states have stepped up to either ban the plans or ensure essential health benefits are protected. 

4. Public Options

Public option is essentially a state-run alternative to private health insurance. A public option was actually considered as a provision in drafting Obamacare but didn't make the final cut. In the event that the ACA markets go away, a public option would still provide a state-funded alternative to those who would lose coverage. 

5. Prohibiting Annual or Lifetime Limits

Insurers used to have an ability to impose yearly or lifetime limits on how much it would pay out for covered benefits, beyond which the member would be on the hook for all expenses - but the ACA put an end to that. The ban did not apply to non-essential health benefits or to grandfathered health insurance plans. 

6. High-risk Pools

Prior to the implementation of the ACA, many states operated "high-risk pools" to subsidize coverage for high-risk individuals who would otherwise be turned down for health care coverage. The ACA created a national high-risk pool in 2010 with fewer restrictions than many of the state-level programs. If the ACA were repealed, it would lead to a resurgence of such risk pools. 

 

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