The potentially landmark Supreme Court case Texas v. California, which could ultimately determine the fate of the Patient Protection and Affordable Care Act, will not be officially decided until sometime in 2021. However, because oral arguments were made before the court in mid-November and a ruling isn't expected to come until April at the earliest, that leaves lots of room for interpretation and analysis among legal experts and scholars.
At issue is a three-pronged series of questions that the Supreme Court will look to answer. According to Benefits Pro, these include: 1) whether the plaintiffs even have a right to bring the suit in the first place, 2) whether the individual mandate is a reasonable use of taxation now that Congress has removed the tax penalty aspect of going without individual coverage, and 3) whether the individual mandate can be stripped from the law even as the rest of it remains intact.
The biggest issue here would be if the Supreme Court answers, yes, no and no, respectively. If the plaintiffs in the case are found to have standing, the Supreme Court would render a potentially landmark decision. If that decision includes the fact that the individual mandate is now unconstitutional, and that it cannot be separated out from the rest of the ACA, that would effectively make the bill and all its consumer protections null and void.
While it's difficult to say what the Supreme Court will ultimately rule, there were some potential indicators of how the individual justices feel based on the proceedings during oral arguments. However, just about any decision rendered — with the possible exception of dismissing the case for lack of standing — would potentially have a major impact on the health insurance industry and, indeed, the health care sector as a whole.
Of course, this case has garnered significant attention for its potentially seismic impact, and everyone seems to have a take on what the content of those oral arguments may indicate, State of Reform recently noted. Speaking at a recent industry conference, Francisco Silva, the general counsel and senior vice president of the California Medical Association, said that standing might be the biggest problem for the plaintiffs. He cautioned that standing here would mean the states bringing the suit would need to be able to prove they have suffered damages as a result of the individual mandate since the tax penalty aspect of it was repealed in 2017. Experts are divided on whether that was adequately proven, but it might be enough to dismiss the case altogether.
Beyond that, however, some of the political aspects of such a decision might have ended up being overblown. Silva added that two of the court's more conservative justices repeatedly expressed skepticism about arguments that the individual mandate could not be severed from the broader ACA. That is to say even if the plaintiffs have standing, to declare the entire law unconstitutional because of that one now-obsolete aspect of it might be viewed as throwing the baby out with the bath water, and create unnecessary chaos for health care providers and insurers alike.
A closer look at oral arguments
However, while it seems as though the future "death of the ACA" some predicted now appears less likely, there are some areas for concern, the law firm White and Williams LLP cautioned. For example, the likelihood of the Supreme Court dismissing the case for lack of standing is probably remote. That's because if the Court had viewed standing as a leading issue, it could have chosen to not even hear the case. On the other hand, given the back-and-forth between the U.S. District Court and the Court of Appeals, the Supreme Court may have simply wanted to step in and assert its overall authority before things got too far into the weeds, especially amid a pandemic.
At that point, severability is the issue and, again, justices who were not previously thought to be sympathetic to the ACA's constitutionality did seem to err on the side of being able to separate the individual mandate from the rest of the law's protections.
At the same time as all this is being considered, it's also worth noting that the U.S. will have a new president before the case is ultimately decided by the Supreme Court, and that could have a long-term impact on health care policy as well, according to a separate Benefits Pro report. With many experts seeing the ACA as likely to survive even if the individual mandate does not, President-elect Joe Biden may have a number of paths forward, including making changes to further strengthen the law, expand its protections and perhaps even set up a public option.
That, obviously, is all to be determined, but right now, experts seem to be proceeding under the assumption that the ACA is going to weather this latest challenge, even if it comes out looking a bit different than it did at the start of 2021.