HERE WE GO AGAIN: The fate of the #ACA & healthcare coverage for up to 34 million Americans could be decided THIS MORNING (UPDATE)

UPDATE 5/17/21: (sigh) Never mind...again. There were several opinions announced this morning but the ACA case wasn't among them...again. The Sword of Damocles continues to dangle.

UPDATE 5/21/21: Annnnnnd the Supreme Court website now shows more decisions to be announced this Monday, May 24th...here we go again (maybe)...

UPDATE: 5/24/21: (sigh) Never mind...again. There were two opinions announced this mroning but the ACA case wasn't among them...again. The Sword of Damocles continues to dangle.

UPDATE: 5/25/21: Annnnnnnd the Supreme Court website now shows more decisions to be announced this Thursday, May 27th...

UPDATE 5/26/21: Never mind.

UPDATE 5/27/21: (sigh) here we go again...again...again...

UPDATE 6/01/21: Never mind.

UPDATE 6/02/21: And again...

UPDATE 6/03/21: Never mind.

UPDATE 6/04/21: And again (both Monday the 7th and Thursday the 10th are scheduled Opinion Days)

UPDATE 06/06/21: Make that over 31 million people...and potentially as many as 34 million.

UPDATE 06/07/21: Never mind. The next Opinion Day is Thursday, June 10th.

UPDATE 6/17/21: AND THAT'S THAT: THROWN OUT FOR LACK OF STANDING!

The current session of the Supreme Court of the United States runs through the end of June.

This means that unless they decide to punt until the next session, a final SCOTUS decision on the insane, absurd, inane GOP-brought, GOP-supported “Texas Fold’em” lawsuit to strike down the entire Patient Protection & Affordable Care Act will happen by then.

As it happens, this just went up an hour ago:

Supreme Court sets Monday as an opinion day. Obamacare, Philly foster-care and Fannie-Freddie all in the potential mix, starting at 10.

— Greg Stohr (@GregStohr) May 13, 2021

This doesn't guarantee that the ACA lawsuit will be announced on Monday...but every day which it isn't announced increases the odds that it will be on the next opinion issuance day.

As a reminder, there’s four different possible ways it could go when they do so, ranging from completely harmless to utter and complete disaster:

• 1. THEY COULD RULE THAT THE CASE HAS NO MERIT AND/OR THAT THE PLAINTIFFS HAVE NO STANDING AND THROW THE WHOLE DAMNED THING OUT.

This is what they should do. It’s an idiotic lawsuit in the first place which never should have made it past the first federal judge...and yet, just like King v. Burwell, here we are.

• 2. THEY COULD RULE THAT THE INDIVIDUAL MANDATE ITSELF IS UNCONSTITUTIONAL WITHOUT AN ACTUAL MANDATE PENALTY ATTACHED TO IT, BUT THAT IT’S COMPLETELY SEVERABLE FROM THE REST OF THE ACA.

If this happens, it would be mildly irritating, but effectively harmless: The ACA would no longer have even a hypothetical “individual mandate” requirement at the federal level (ironically, CA, DC, MA, NJ & RI have all since reinstated their own individual mandate penalties at the state level).

However, the ACA already effectively doesn’t have a federal mandate penalty now, and hasn’t since January 1, 2019, and it’s been chugging along for the past 2+ years with minimal damage. Zeroing out the federal penalty did cause ACA policy premiums to spike around 6-8% or so (roughly $580/yr per unsubsidized enrollee)...but for the most part that just caused ACA subsidies to spike accordingly, costing taxpayers perhaps an additional $5 billion per year or so. Otherwise...that’s about it.

This is the key to the entire case as well as the defense: The plaintiffs claim that the ACA can’t possibly function without the penalty...and yet here we are. If this happens, it would amount to the status quo, and all would be pretty much well.

I see this as the most likely scenario, especially since It would also give the conservative Justices “cover” since it would finally eliminate the single most “philosophically offensive” part of the ACA to Republicans, even if only symbolically.

The only downside to this ruling is that it would set a bad precedent for “severability” in future court rulings, but that would probably just mean Congress/legislatures would have to be extra careful to include clauses in every paragraph of every bill saying “Oh, this subsection is severable. Oh, this one is severable as well...”

• 3. THEY COULD RULE THAT THE MANDATE IS UNCONSTITUTIONAL AND THAT THE ACA PROVISIONS DIRECTLY RELATED TO IT HAVE TO GO AS WELL.

This would lead to perhaps the strangest situation: On the upside, major parts of the ACA like Medicaid expansion, closure of the Medicare Part D “donut hole” and so forth would remain in place, as would the financial subsidies for ACA exchange enrollees...but the ACA’s patient protections such as Guaranteed Issue, Community Rating, Essential Health Benefits, caps on out of pocket expenses, and the ban on annual/lifetime coverage limits would all be GONE.

In other words, insurance carriers would be able to go back to medical underwriting for major medical policies...which means they could once again deny coverage of people with pre-existing conditions (PECs), or charge those with PECs exorbitantly higher rates, or simply refuse to cover the particular condition itself (like cancer, for instance).

Not only would this be devastating for as many as 130 million Americans, it would also be a logistical and actuarial nightmare for the insurance carriers and the government due to how the ACA’s subsidies are structured.

The ACA’s subsidy formula is based on the “benchmark Silver plan” available on the ACA exchange...that is, the 2nd lowest-cost plan available. However, the pricing of exchange plans (Bronze, Silver, Gold & Platinum) are all based on the assumption that everyone of a given age living in a given geographic region will be charged the same amount regardless of their medical condition, gender, etc.

Once you bring back medical underwriting, there is no benchmark plan to base subsidies on. The “2nd lowest-cost Silver” plan for one 30-yr old might be 5x higher than for another...or 50x higher (seriously, there was a case in Iowa a few years back of a teenager with a rare form of hemophilia whose medical claims amounted to $1 million per month).

This could potentially lead to a situation where someone’s official premiums were set at $50,000/month...but with them receiving $49,800/month in subsidies, which would be insane.

This was actually the original “solution” which then-US Attorney General Jeff Sessions (remember him?) was seeking in the early days of the lawsuit, which was kind of strange...but it became irrelevant the following spring, when new AG William Barr changed his mind and decided to ask for the entire law to be struck down, “root and branch” as Mitch McConnell used to put it.

• 4. THEY COULD RULE THAT THE ENTIRE ACA IS UNCONSTITUTIONAL AND STRIKE THE ENTIRE LAW DOWN.

THIS IS THE NIGHTMARE SCENARIO.

If this happens:

• Medicaid expansion for nearly 20 million people: GONE.
• Financial subsidies for ~12 million ACA exchange enrollees: GONE.
• Basic Health Plan coverage for nearly a million people in Minnesota and New York: GONE.
• Discrimination against coverage of ~54 - 130 million people with pre-existing conditions: BACK.
• Charging women more for the same policy simply because they’re women? BACK.
• Charging older Americans 5 to 6 times as much as younger Americans? BACK.
• Requirement that policies cover at least 60% of medical expenses: GONE.
• Requirement that policies cover maternity care and mental health services: GONE.
• Adult children being allowed to remain on their parents plans until age 26: GONE.
• Annual and lifetime limits on healthcare coverage claims? BACK.
• Requirement that policies cover preventative services at no out-of-pocket cost? GONE.
• Financial help to reduce deductibles and co-pays for low-income enrollees? GONE.
• A hard cap on out-of-pocket expenses? GONE.
• The Medicare Part D “donut hole” being closed by the ACA? REOPENED.

Yes, that’s right: Even the estimated ~1.65 million people who’ve JUST enrolled for expanded ACA subsidies via the American Rescue Plan would see those subsidies yanked away, in many cases before they even receive their first tax credit.

• So, what can President Biden and Congressional Democrats do about it?

Well, there’s three things they could THEORETICALLY do to #MootTheSuit...but each would be problematic for different reasons:

• a) Pass a simple bill changing the federal mandate penalty to an amount higher than $0.00.
• b) Pass a simple bill clarifying that the mandate is separate from the rest of the ACA.
• c) Pass a simple bill striking out the underlying mandate language itself.

The problem with b) and c) is that they can’t be done via reconciliation; they would have to pass the Senate via regular order, which of course means...you guessed it...overcoming the filibuster.

That leaves #1, which a lot of people thought could be done with just 51 votes via reconciliation process, since that’s exactly how the GOP managed to change the penalty to $0 in the first place.

HOWEVER, in the most painful of ironies, I’ve since been told that it wouldn’t be enough to simply restore the penalty to a nominal amount like $1.00 because that wouldn’t impact the budget enough. Apparently it would have to be restored to a larger amount. How much? I’m not sure, but let’s say at least $100 or more.

Of course if they’re gonna do that, they might as well just restore it to the $695/person which it was in the first place.

This leads to another potential problem: First, actively restoring the penalty to the original amount could potentially be seen by SCOTUS as an “admission” that the case has merit in the first place. After all, the logic goes, why would they go through such lengths to reset the penalty unless they agreed that having a $0 penalty presented a problem?

I agree that reasoning seems specious at best, but that’s what I’ve been told by a few legal scholars, so who the hell knows?

• NOW, LET’S SUPPOSE THE WORST-CASE SCENARIO DOES HAPPEN. WHAT COULD DEMOCRATS DO THEN?

Well, believe it or not, U of M law professor & ACA expert Nicholas Bagley says that it’s possible that they might be able to take action (i.e., one of the 3 options above) after the ruling comes out, even if it has immediate effect:

When the Supreme Court declares a law unconstitutional, all it's saying is that it won't enforce the law. The executive branch goes along with that declaration, usually willingly. But the law still remains on the books. So adding a $1 mandate should still do the trick, even if the decision takes immediate effect.

But lots of people share your intuition: that what the Supreme Court does is "strike down" laws. And that intuition is REALLY strong. So if Dems were to say, "Well, we're adding a $1 penalty, that should fix it," they'd get pummeled over that. And I could imagine a skittish Manchin or Sinema not wanting to go along with that.

Of course, Bagley told me this before we knew that a “$1 penalty” wouldn’t be enough, but the point is that they could theoretically save the ACA even after the ruling was given, which I didn’t realize was doable.

As for his point about Manchin/Sinema “not wanting to get pummeled” over something like that...well, I’m pretty sure allowing healthcare coverage to be ripped away from nearly 10% of the population in the middle of a global pandemic and NOT doing anything to stop it when they could will get them “pummeled” a lot worse.

In any event, cross your fingers and pray that SCOTUS goes for #1 or #2 above.

(There’s also a couple of other possibilities, such as SCOTUS kicking the case back down to the circuit court level or whatever, but I’ve been told by several legal experts that this is extremely unlikely at this juncture.)

So tune in on Monday morning. If it isn't announced then, The Sword of Damocles will continue to dangle over the entire nation’s head for another 1 - 44 days...