Benefits Buzz

Supreme Court to Hear ACA Case in November

Posted on August 26th, 2020

A date is finally set for the Supreme Court of the United States (SCOTUS) to once again rule on the constitutionality of the Affordable Care Act (ACA). Oral arguments are expected to be heard on November 10, 2020, just one week after the presidential election.

The lawsuit has been working its way through the court system for a couple of years. A group of Republican attorneys’ generals have been leading the efforts in an attempt to strike down the constitutionality of the ACA. Their claim is that the lack of a federal Individual Mandate penalty invalidates the entire ACA, and a federal district judge in Texas sided with them in 2018. After going through a round of appeals, the lawsuit now finds its way to SCOTUS.

The underlying argument is that the Individual Mandate is intertwined with so many crucial parts of the ACA, that without it, the law cannot sustain. It is important for things like preserving guarantee issue of coverage and covering pre-existing conditions without any waiting periods. If people are not incentivized/penalized to purchase health insurance, then it makes it much more difficult for other provisions to successfully work. There will not be enough good risk to offset the bad risk, so the lawsuit alleges.

The federal penalty for failing to have health insurance was reduced to $0 as part of the Tax Cuts and Jobs Act. The change to the Individual Mandate took effect in 2019. Prior to then, the penalty was $695 or 2.5% of household income, whichever was greater. There were exemptions from the penalty that could apply for things like financial hardships or religious objections. Technically the Individual Mandate is still effective. It’s just the penalty has been zeroed out.

The Trump administration has elected not to defend the ACA. Instead, a group of Democratic attorneys’ generals are leading the efforts to defend the constitutionality of the ACA. Their claim is that the Individual Mandate is severable from the rest of the ACA. They don’t believe it to be as crucial to the law as Republicans have claimed. Furthermore, they argue the ACA is more important than ever with a national pandemic amongst our society.

This will be the third time that SCOTUS will be issuing a ruling on the constitutionality of the ACA. They upheld the law the previous two times.

 

Have a question about the Affordable Care Act?

 

Tag Cloud

Archives

Enter Your Email