What the New Court Ruling Striking Down the ACA Means for Your Health Insurance
Consumer Reports has no financial relationship with advertisers on this site.
Consumer Reports has no financial relationship with advertisers on this site.
Just as the sign-up window for individual health insurance for 2019 is closing, a legal ruling is creating new uncertainty about the future of the Affordable Care Act (ACA) and could potentially upend health insurance for millions of Americans.
In a long-awaited decision, a judge in Texas declared late Friday that the ACA is unconstitutional. The ruling was a response to a lawsuit brought earlier this year by a group of Republican state attorneys general.
The ruling will have no immediate impact on the health insurance markets and is expected to have a long legal road ahead.
Still, the timing couldn’t be more confusing for the millions of people who buy their own health insurance on the exchanges created by the ACA, commonly referred to as Obamacare. Saturday (midnight PST) is the last day to choose a health insurance plan for 2019, and there is usually a surge of signups as the deadline nears.
Consumer Reports says that people who need healthcare from the exchanges should continue to sign up today before the deadline, and that those with employer-sponsored healthcare also should not worry because the ruling in the short term does not affect their coverage.
The attorneys general in the lawsuit argued that because the ACA's "individual mandate"—which requires most people to have health insurance or pay a fine—is no longer in effect, the entire healthcare law tied to it should be thrown out.
The elimination of the penalty for not buying insurance was a provision in the Tax Cuts and Jobs Act signed into law at the end of last year.
President Trump tweeted his support for the judge’s decision, but the White House also issued a separate statement saying “We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place.”
Late Friday, California Attorney General Xavier Becerra, who is leading a coalition of Democratic state attorneys general fighting the lawsuit, vowed to quickly challenge the ruling.
As of December 8th, 4.1 million people signed up for plans sold on the 39 federally-run HealthCare.gov exchanges. That’s down about 12 percent from the same time last year. Enrollment is lagging for a number of reasons, including the fact that there is no longer a penalty for not buying insurance, and because high premiums make insurance difficult to afford for people who don’t get financial assistance. The strong job market also means more people are getting insurance through work.
Still, misunderstandings about the law can dampen enrollment and the latest news is likely to sow more confusion. A recent survey by the Kaiser Family Foundation found that one in four people who are uninsured or buy their own health insurance don’t know when open enrollment ends and only one-third of people know that Congress got rid of the penalty for not having health insurance.
Widespread Impact If the ACA Is Killed
While the court ruling against the ACA will have no immediate effect on the health insurance markets, if the ACA is eventually overturned, health policy experts say it could have major ramifications for everyone with health insurance, not just those who buy their own.
“If this Texas decision on the ACA is upheld, it would throw the individual insurance market and the whole health care system into complete chaos,” says Larry Levitt, a senior vice president at the Kaiser Family Foundation, a non-profit research organization focused on healthcare policy issues.
That’s because the ACA, which was signed into law in 2010, made enormous changes to how health insurance works in the U.S. In addition to creating marketplaces where Americans can buy individual health insurance and get income-based subsidies to reduce premiums, the ACA also allows states to expand Medicaid coverage to a larger group of people with support from federal funds. Some 36 states and Washington, D.C. have expanded Medicaid, including four states for the first time starting next year.
The ACA also requires insurers to guarantee health insurance coverage to all people regardless of their health status and cannot charge people more based on a preexisting health condition or gender. It limits how much more older people can be charged for coverage compared to younger people. It banned annual and lifetime caps on how much your insurance will cover. It allows children to stay on their parents’ health insurance until age 26. And it mandated that a host of preventive care services be provided for free.
Lesser known parts of the law including requiring restaurants to include calorie counts on menus and mandating background checks on all nursing home staff.
The ACA Could Survive
The eventual outcome of this legal challenge is far from clear. The merits of the argument to strike down the whole ACA have been questioned by both conservative and liberal legal experts, who say when Congress acted to remove the penalty, it did not want to get rid of the rest of the ACA. The lawsuit has been criticized by many in the healthcare industry, from medical professionals to health insurers.
And though the Justice Department last June said it supported parts of the lawsuit, it didn’t agree that the whole healthcare law should be thrown out.
Nicholas Bagley, a University of Michigan law professor who specializes in healthcare policy, says he doesn’t think it’s likely the ACA will be overturned, though how the Trump Administration reacts while the lawsuit is pending is always a wildcard.
“Bottom line: Nothing changes for now, and nothing will change for some time to come,” Bagley says.
More from Consumer Reports:
Top pick tires for 2016
Best used cars for $25,000 and less
7 best mattresses for couples
Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2018, Consumer Reports, Inc.
