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Supreme Court to hear oral arguments this morning to determine validity of Affordable Care Act

The severability issue of the individual mandate is where "the rubber hits the road," says AHIP Attorney Pratik Shah.

Susan Morse, Managing Editor

This morning the Supreme Court will hear oral arguments over whether the Affordable Care Act is valid without the individual mandate.

The legal battle pits 18 Republican-controlled states and the Trump administration against the attorneys general of 20 Democratic states over the legality of the ACA due to whether the law is severable from the mandate to buy health insurance or face a tax penalty.

The line of argument is whether the ACA is severable from the individual mandate. 

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"My take is, the severability issue is where the rubber hits the road," said Attorney Pratik Shah, who filed a friend of the court brief on behalf of America's Health Insurance Plans.

AHIP and others in support of keeping the ACA believe the law is severable from the individual mandate. 

"The Supreme Court construed the individual mandate to be a choice," Shah said. "That's the backdrop under which Congress made the amendment. Congressional intent is clear: the zeroing out of the mandate's tax penalty was not intended to invalidate the ACA."

The plaintiffs successfully argued before a district court in Texas that the law is inseverable from the mandate and tax penalty. An appeals court sent the case back to the district court.

The GOP argument is based on a decision by the Supreme Court eight years ago. In 2012, the Supreme Court ruled that the ACA was valid due to Congress's ability to apply a tax penalty to individuals who did not get insurance coverage. Congress does have the power to tax, SCOTUS said. But it does not have the power to force people to buy health insurance.

The vote in 2012 was 5-4.

The Supreme Court now has a 6-3 conservative majority since Justice Amy Coney Barrett's appointment to the court last month.

A decision is expected by the end of the Supreme Court's term in July 2021.

Attorney Victoria Ferrara of the Ferrara Law Group said she does not expect a ruling will be fast-tracked. 

Neither will the justices be influenced by the results of the presidential election, though a Biden Administration could file briefs in favor of the ACA prior to a ruling.

But both Ferrara and Shah said they do not believe the justices will be eager to end insurance for 20 million Americans who are covered under the ACA, especially during a pandemic when many have lost their jobs and employer-based insurance.

"The law strongly supports upholding the ACA. It's hard for me to believe that either Congress or the Supreme Court would have an interest in setting aside the ACA, to take away health insurance during a pandemic," Shah said.

The first issue the justices must decide is whether the plaintiffs have standing, according to Ferrara. 

"My hope is they won't get too far with it because of the issue of standing," said Ferrara, who is concerned with how the law's demise would impact women. As the founder of Worldwide Surrogacy, Ferrara specializes in reproductive law.

Texas argues individuals were harmed and that the state was harmed because the ACA costs the state more money because more people signed up for Medicaid coverage.

"There is some talk the original court in Texas made a faulty ruling when it came to standing," she said. 


At stake is insurance for 20 million people, compensated care for providers and payers who have gone all-in on selling plans in the ACA market.

AHIP has looked at whether removing the individual mandate would disrupt insurance markets.

In 2010, that issue may have been an essential component of the ACA, Shah said, but by 2017, when Congress amended the ACA tax penalty to zero, that relationship was no longer the same. 

ACA insurance markets are stable and enrollment numbers did not drop in a material way to affect the stability of the markets. Insurers in the ACA market have expanded their market reach. They are not hedging the results of a ruling going into the 2021 enrollment season. 

"Things will be the status quo until court rules," Shah said. "But if it gets rid of the ACA, that will be dramatically disrupting to everyone, including insurance companies, patients and providers."


Providers also support the ACA as giving coverage for millions, which supports better health outcomes and results in less uncompensated care.

Twitter: @SusanJMorse
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