Overturning Affordable Care Act could cost Massachusetts billions
Tens of thousands of people at risk of losing health insurance
THE US SUPREME COURT heard arguments Tuesday in a case that could overturn the Affordable Care Act – with major economic and health insurance implications for Massachusetts. Two key justices – Chief Justice John Roberts and Justice Brett Kavanaugh – sent signals that they were not inclined to throw out the entire law, but uncertainty over what the court will do has many health care leaders in the state on edge.
“Clearly, getting rid of the Affordable Care Act during a global pandemic would be devastating for people,” said Amy Rosenthal, executive director of Health Care for All, a Massachusetts nonprofit that aims to make health care accessible. “It would jolt our health care system at a time when we really need stability.”
The case involves 18 Republican-led states, led by Texas, which are claiming that the individual mandate requiring everyone to purchase health insurance is unconstitutional. The Trump administration sided with the Republicans. (As of 2019, Congress eliminated the financial penalty for not buying health insurance, but the mandate remains in place.) The states say if the individual mandate is unconstitutional, the rest of the law should also be struck down.
The Democratic-controlled House and a group of Democratic-led states, including California and Massachusetts, are defending the Affordable Care Act.
While the Supreme Court upheld the individual mandate in 2012 in a 5-4 vote, the composition of the court has changed, with two Trump-appointed justices – Kavanaugh and Amy Coney Barrett – replacing justices Anthony Kennedy and Ruth Bader Ginsburg. Kennedy voted to strike down the mandate in 2012 and Ginsburg voted to uphold it.
In theory, if the court strikes down the Affordable Care Act, president-elect Joe Biden could attempt to reinstate it, but that would require legislation. The makeup of the Senate is still uncertain but there is a good chance Republicans, who have generally supported repealing the health care law, will retain control.
“A Biden administration would have a route to restore coverage but it’s a challenging path and it would have to go through the House and Senate as the original Affordable Care Act did,” said Audrey Shelto, president of the Blue Cross Blue Shield Foundation of Massachusetts.
There are two main areas in which the court case has major implications for Massachusetts: rates of health insurance coverage and federal financial reimbursements.
Massachusetts instituted universal health insurance – with an individual mandate and an employer mandate – under Republican Gov. Mitt Romney in 2006. The Affordable Care Act, however, expanded the pool of people eligible for subsidized insurance coverage. It opened up MassHealth to anyone who is low-income, rather than only children, the elderly, or those who are disabled or pregnant. It also provided additional subsidies to buy health insurance for people earning between 300 and 400 percent of the federal poverty level (between $65,160 and $86,880 for a family of three).
To incentivize states to expand their Medicaid programs, the federal government agreed to pay a large portion of the costs.
The federal law also created new protections not included in Romneycare, including guaranteeing coverage for people with pre-existing conditions, allowing anyone under age 26 to stay on their parent’s health plan, eliminating lifetime coverage caps, and requiring coverage of preventative care without copays.
This is mostly because 360,000 people who now have MassHealth under the expanded eligibility provisions would lose it. Many would be able to buy health insurance privately, through the state exchange and possibly with state subsidies. Some would get employer-sponsored coverage. But 28 percent of those people would become uninsured, according to the foundation.
The uninsured individuals are most likely to be low and moderate income adults without children who lose MassHealth coverage but cannot buy insurance through the state health care exchange, either because they can’t afford it or because they aren’t eligible. They could be, for example, people earning between 300 and 400 percent of the federal poverty level or those offered employer-sponsored insurance that they cannot afford.
Another huge impact for the state is financial. According to the report, Massachusetts would lose $2.1 billion a year in federal money compared to current funding levels. Even if Massachusetts can restore the federal funding arrangement it had after 2006, state spending would have to increase by $988 million to maintain 2006 levels of coverage. Rosenthal noted that finding that kind of money will be difficult with a state budget already dealing with the consequences of COVID-19 and the resulting economic shutdown.
If Massachusetts is not able to restore its 2006 universal coverage and the health insurance subsidies that came with it, the impact would be far greater. The Blue Cross Blue Shield Foundation estimates that 422,000 Massachusetts residents would lose health insurance – leading to an uninsured rate of 12 percent compared to 4 percent today – and Massachusetts would lose $3.3 billion in federal money. The uninsured in that case would include people who became newly eligible for MassHealth under the Affordable Care Act and anyone currently buying subsidized insurance on the state-run exchange.
The ability to revert to Romneycare depends on a waiver Massachusetts negotiates with the federal government, which would determine things like federal subsidies. Shelto said a Biden administration will likely be more willing than the current Trump administration to negotiate a waiver that lets Massachusetts resume its former program.
But Rosenthal noted that in addition to the issue of federal subsidies, many of the ACA protections – like letting young adults stay on a parent’s health plan –– were not included in the Massachusetts reform. “It’s not as simple as saying we would revert back to the days of the 2006 law,” Rosenthal said.
Gov. Charlie Baker, a Republican, has advocated against efforts to repeal the Affordable Care Act. Baker spokesman Terry MacCormack said, “Thanks to nation-leading bipartisan health care reform, Massachusetts continues to protect access to care at the state level, and the administration will continue to take steps to ensure all residents have access to the health care coverage they need.”
Health care leaders in the state said the effort to overturn the ACA could not come at a worse time, as the country battles the impact of a global pandemic. Andrew Dreyfus, president and CEO of Blue Cross Blue Shield Massachusetts – the state’s largest insurer and a separate entity from the foundation – said the ACA is particularly vital to ensuring that newly unemployed workers are eligible for affordable insurance coverage. “The public conversation now should be about expanding coverage – not disrupting it,” Dreyfus said.
Lora Pellegrini, president of the Massachusetts Association of Health Plans, which represents most of the state’s other health insurers, said insurers are worried that Massachusetts would lose billions of dollars in federal money to fund Medicaid expansion and provide subsidies and tax credits. “This would result in thousands of individuals losing health insurance coverage during an unprecedented pandemic,” Pellegrini said.
Several experts note that these potential losses are a worst-case scenario. Justin Lowe, legal director of Health Law Advocates, a legal services agency focusing on health care for low-income consumers, said part of the case hinges on “severability”— whether if the individual mandate is ruled unconstitutional, the justices must strike down the rest of the Affordable Care Act.
During oral arguments on Tuesday, Roberts and Kavanaugh, each appointed by a Republican president, appeared to lean against striking down the entire law. It is presumed that the court’s three liberal justices would also take that view. If the individual mandate is struck down but not the rest of the law, Lowe said, “I don’t think health care would look all that different than it looks today.”
Lowe said if the entire law gets wiped out, “health care as we know it in this state and throughout the country will cease to exist.” But he suggested that given the real-world ramifications of that, it is possible that even if the court strikes down the law, the justices will delay the effect of that decision to give Congress and the president time to act.Joshua Archambault, senior fellow on health care policy at the conservative-leaning Pioneer Institute, warned against “fear-mongering.” In the short-term, Archambault said, “Our regulations and laws are not going to radically change.” He said Massachusetts is likely to continue to maintain its own exchange, mandate, and Medicaid expansion, though there would be some transition period if the ACA is repealed. For Massachusetts, he said, “It becomes more about money than anything else.”
In the long-term, Archambault said, it will be up to Congress either to address the results of the court decision or, even without that, to fix continuing problems with the country’s health care. “There are lots of things we should be talking about…and the Supreme Court can serve as a distraction from doing the hard work that needs to happen,” Archambault said.