A federal appeals court is about to hear oral arguments in a case that could invalidate the Affordable Care Act, which would imperil health care coverage for tens of thousands of people in Connecticut.

About 111,000 residents purchase their insurance through Access Health CT, the state’s health care exchange. Another 267,722 low-income adults have coverage through the ACA’s expansion of Medicaid, known as HUSKY in Connecticut.

A federal district court in December agreed with Texas and 19 other Republican state attorneys general that after Congress eliminated the ACA’s tax penalties for those who did not have health insurance as part of a federal tax overhaul, the entire health care law became invalid. The reasoning was that the “individual mandate” to purchase insurance could not be severed from other parts of the law, the district court judge ruled.

So the judge decided that the other parts of the ACA, including its subsidies to help people pay insurance premiums and out-of-pocket health costs and its expansion of Medicaid, was invalid, too.

That prompted a group of Democratic states, including Connecticut, who want the ACA to remain law to promptly appeal the decision in State of Texas, et al v. USA to the New Orleans-based 5th Circuit Court of Appeals. On behalf of the U.S. House of Representatives, Speaker Nancy Pelosi joined the Democratic states in defending the ACA.

“It’s entirely likely that whoever loses will ask the Supreme Court to review the case.”

MaryBeth Musumeci
Kaiser Family Foundation

The Democratic states and the Democratic House of Representatives are defending the ACA because the Trump administration has refused to do so.

“It is highly unusual for the federal government to not defend a federal law,” said MaryBeth Musumeci of the Kaiser Family Foundation program on Medicaid and the uninsured.

Instead of defending the ACA, the Trump administration agreed with the “red” states that the ACA is unconstitutional.

After assuming office in 2017, President Donald Trump forcefully prodded Congress to repeal the Affordable Care Act. There were not sufficient votes in the Senate to repeal the health care law, however, so opponents then looked to the courts, outraging the ACA’s Democratic defenders.

“The  president of the United States is going to send all his lawyers to court to argue that the entirety of the Affordable Care Act should be destroyed. Not piece by piece. Not over time. Overnight. All of it,” said Sen. Chris Murphy, D-Conn.

The 5th Circuit is not bound by the Texas court’s interpretation of the ACA and on Tuesday will consider the case anew.

Musumeci said there are  three main issues that the judges will consider — whether the parties have standing in the case to make the appeal, whether the tax penalty for those who don’t have insurance, now zero dollars under the new tax law, is constitutional, and whether the individual mandate can be severed from the rest of the ACA, leaving most of the health care law in place.

There is no deadline for the 5th Circuit to make its decision.

Meanwhile, Musumeci said, “it’s entirely likely that whoever loses will ask the Supreme Court to review the case.”

That means the legal battle over the Affordable Care Act is expected to drag on, and the ACA is likely to still be the law of the land in 2020, an election year. Enrollment in ACA policies through Access Health CT for 2020 would begin in October, with ConnectiCare and Anthem offering policies on the exchange.

‘Wreaking havoc on the health care system’

The parties from both sides of the case will argue before a three-judge panel, two Republican appointees and one Democratic appointee.

Supporters of the ACA are expected to argue that the end of the individual mandate does not affect the rest of the ACA.

They are likely to cite a Congressional Budget Office study that showed ending the mandate to purchase insurance has not thrown the insurance industry into a “death spiral” of increasing rates and plummeting enrollment. In fact, in the last enrollment period, the first without the mandate, insurance premiums hardly increased at all, and actually fell in some states.

Attorneys for Connecticut and other “blue” states will also argue that they stand to suffer substantial financial losses if the Affordable Care Act and the millions of federal dollars the law funnels to states disappear.

Last year, the state received about $1.4 billion in federal funding for the Medicaid expansion. Connecticut is also expected to receive $449.6 million this year in federal premium subsidies.

In a filing last week requested by the court that defended their legal standing in the case, the Democratic states said Oregon and Connecticut have received $432.1 million through an Affordable Care Act  program allowing states to fund care for disabled and elderly individuals at home or in their communities instead of in institutions.

Groups representing insurers, doctors, hospitals, seniors and consumers have overwhelmed the 5th Circuit by filing briefs in the case that say the ACA should continue to operate.

“Invalidation of the ACA—irrespective of the continued operation of the so-called individual mandate—would wreak havoc on the health care system,” wrote America’s Health Insurance Plans in its amicus brief.

Meanwhile a number of conservative organizations are backing the effort to end the ACA.

A brief filed by more than a dozen of those groups, including Gun Owners of America, Citizens United and the Conservative Legal Defense and Education Fund, said supporters of the ACA assume “the federal government has and should have authority to direct healthcare choices for Americans.”

“That view may be widely held today, but was unknown at the time the Constitution was adopted,” the conservative organizations wrote in their brief.

Attorneys for the Republican states, meanwhile, are expected to reiterate what they argued successfully in the lower court — that without the individual mandate, the whole health care law collapses.

“Since binding precedent confirms that the individual mandate is now unconstitutional, the remaining question is what other parts of the ACA remain,” the Republican states wrote in their brief to the 5th Circuit. “The ACA’s text answers that question explicitly: nothing. In multiple separate provisions, Congress stated its view that the mandate is ‘essential;’” without it, the rest of the law cannot stand.”

An end to the ACA in Connecticut

Repealing the ACA would have widespread impact in Connecticut, affecting not only the 111,000 people who buy insurance through Access Health CT, most of them with the help of federal subsidies, and the 268,000 residents who were covered under the ACA’s expansion of Medicaid.

About 14,000 young adults in the state could be kicked off their parents’ insurance plans, since the ACA requires employers to cover their workers’ children up to the age of 26. If the law were tossed out, employers would have to decide whether they wanted to continue providing the benefit.

And, according to the Kaiser Family Foundation, 522,000 adults in Connecticut have pre-existing medical conditions that could disqualify them from purchasing health insurance or force them to pay higher premiums if the law were struck down.

The Brookings Institution determined that 1.2 million people in the state would be subject to lifetime limits on health insurance if the ACA were overturned.

Connecticut law prohibits insurers from denying coverage to residents with pre-existing conditions in most of the policies sold here. But that protection, along with the state-mandated “essential health benefits” that all insurers in Connecticut must provide, is predicated on the existence of the ACA and would be vulnerable to repeal if the health care law no longer exists.

Murphy said Democrats made big electoral gains by running in support of the Affordable Care Act in 2018.

But now many of the presidential candidates, and the most progressive members of Congress, including Rep. Jahana Hayes, D-5th District and Sen. Richard Blumenthal, D-Conn., are now supportive of Medicare-for-all proposals that would establish a government-run, “single payer” health care system that would replace the ACA.

Murphy urged caution.

“I understand that our Democratic presidential candidates are going to naturally spend a bunch of time talking about their very big, bold plans for health care reform,” he said. “But if they do that at the expense of explaining to the American people what Donald Trump will do to our health care system and people with pre-existing conditions if he gets a second term, then it’s not time well spent.”

Last week, former Vice President Joe Biden, who is running to unseat Trump and has rejected the idea of a Medicare-for-all system, said he’d bring back the tax penalty for those with no insurance.

“Yes, I’d bring back the individual mandate,” Biden said during a CNN interview.

This story first appeared July 8, 2019, in The CT Mirror | by Ana Radelat and Jenna Carlesso