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What’s next for health care reform after the Supreme Court rejects ACA’s most recent challenge

In the foreground is a handwritten sign, reading "Save the ACA." The Supreme Court building is in the background.
The Supreme Court has pushed back three challenges to the Affordable Care Act. AP Photo/Alex Brandon

The U.S. Supreme Court upheld the Affordable Care Act for the third time on June 17, 2021, this time in a case called California v. Texas. With seven justices holding that the states and individual plaintiffs lacked standing to sue because they failed to show that they had suffered a direct injury, the Court delivered its strongest defense of the law to date. The key parts of the previous decisions had been 5-4 and 6-3, respectively.

This result was not unpredicted. Indeed, as I wrote in November, legal experts called the arguments brought by the states and individual plaintiffs challenging the ACA “weak” and “ridiculous.”

And, as I noted at the time, the oral arguments suggested that the Court’s key swing votes were largely skeptical of the challengers’ legal arguments. What was more potentially surprising about the 7-2 final result were the votes of Justices Clarence Thomas and Amy Coney Barrett, as they joined Chief Justice John Roberts, and Justices Stephen Breyer, Elena Kagan, Brett Kavanaugh and Sonia Sotomayor in voting to deny the challenge.

Specifically, the litigation centered around whether the individual mandate penalty – the fine an individual must pay for not carrying health insurance – was made unconstitutional when Congress “zeroed out” the monetary penalty in 2017. Two individual plaintiffs and a group of states led by Texas argued that they were injured as a result of the now-unenforceable mandate, and that the mandate – now, arguably, no longer a tax because it was not revenue-generating – could no longer be upheld as constitutional. But the Court found that the challengers had failed to state a cognizable injury and thus, lacked standing.

The decision’s biggest fireworks came from Justice Samuel Alito, whose strongly worded dissent was joined by Justice Neil Gorsuch. Alito found that the challengers did experience the type of injury required, agreeing with the argument that an unenforceable individual mandate penalty – upheld as a constitutional tax in National Federation of Independent Businesses v. Sebelius – was no longer justifiable, finding it both unconstitutional and not severable, or able to be excised, from the rest of the law. Alito’s opinion, which would have struck down the entire ACA, was cutting in its criticism, perhaps reminding Court watchers of the sharp dissents of the late Justice Antonin Scalia.

Indeed, even though this legal challenge was weaker than previous ones, the ACA still did hang in the balance – with 21 million people at direct risk of losing their health insurance, and millions more at risk of losing protection against preexisting condition discrimination.

As a health law professor who studies and writes about the ACA and health reform, I think it is worthwhile to look ahead to what comes next now that the newest challenge has been laid to rest.

President Barack Obama is surrounded by onlookers as he signs a document. Joe Biden, Nancy Pelosi and a young Black boy in a vest and tie are part of the crowd.
President Barack Obama signs the Affordable Care Act in 2010. AP Photo/J. Scott Applewhite

An inflection point

The summer of 2021 seems to present a very different political environment for the ACA. Now more than 11 years after President Obama signed the ACA, the law has experienced its most extensive period of sustained public support, according to the Kaiser Family Foundation, a nonprofit organization focusing on national health policy issues.

The first challenge to the ACA to reach the Supreme Court, National Federation of Independent Businesses v. Sebelius, was filed in 2010, with a decision in 2012. The complaint that would become King v. Burwell was filed in 2013, with a favorable decision for the ACA in 2015. This most recent challenge was filed in the spring of 2018.

But the germination of these legal challenges took place during a very different political era for the ACA. Indeed, until 2017, the ACA struggled to gain public support. But since early 2017, more Americans have supported the law than have opposed it, and the trendlines are unmistakable. As of May 2021, 53% of Americans supported the ACA and 35% opposed it.

In short, it remains an open question as to whether there is the political will to continue to seek a judicial remedy to destroy a law that seems to be increasingly popular. One would think that the law may finally be here to stay. But given the frequency with which opponents of the ACA have resorted to the courts, one can never be sure.

To the states

Instead, it seems like the focus of health reform over the remainder of the first half of President Joe Biden’s term will be on whether the administration can finally persuade the 12 remaining “holdout” states to expand their Medicaid programs, granting health care access to millions more Americans. Two other states — Missouri and Oklahoma — have voted to expand Medicaid but have not yet implemented Medicaid expansion.

The biggest prize is Texas, which, according to a study, could cover up to 1.2 million uninsured individuals through Medicaid expansion. But the Texas House rejected an expansion effort earlier this year. Additionally, with expansion, Florida could cover more than 800,000 people, and Georgia, more than 600,000.

Through the COVID-19 relief bill, the Biden administration sweetened the deal for states to expand their Medicaid programs by increasing federal funding. While it seems that those efforts may have initially resulted in some shifts in these states, and in others the efforts have drawn a “mixed response,” no state has yet moved to expand the program as a result.

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An equipoise?

At the same time, it would appear that some of the more progressive health reform goals — such as “Medicare for All,” or even a government-run public option — are not part of the Biden agenda. According to reporting in early June 2021, the federal public option “has fallen off the national radar and will be difficult to revive without a major push by the White House.” Nonetheless, Nevada, Colorado and Washington state have now established their own public options.

Instead, the Biden administration is working to bolster and broaden the ACA’s subsidies for private insurance, which is having positive effects on the number of Americans covered under the ACA.

All of this seems to suggest a health reform equipoise at the moment. Perhaps the ACA’s most turbulent decade is behind us, and, instead, policymakers will be working to bolster its coverage and plug its holes. Nonetheless, if we’ve learned one thing over the last 11 years of following American health care reform efforts, it is that what happens next is often hard to predict.

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