Whatever Became of the ACA?

If you’re thinking it went away under a new administration, think again. It will be with us for at least another year.

By Jeff Spencer

Since the 2016 election, and with the name on the door of the Oval Office changing, the status and future of the Affordable Care Act has remained uncertain. Between “repeal-and-replace,” “skinny repeal,” “repeal and replace later on,” something that could be described as “repeal and then see how the re-election goes, do something then, but we’ll just play it by ear,” not to mention the recent tax bill, and even more recent litigation coming out of Texas, it’s easy to get lost.

I thought I’d try my hand at providing a short run-down on where the ACA stands and what it all means for individuals and companies. The first thing to remember is that, so far, the ACA remains almost entirely in place as it was prior to the current admin-istration. Pre-existing conditions must still be covered by individuals’ private insurance plans, annual caps are still illegal, companies with more than 50 full-time employees must offer health insurance, and your teenager can remain on your plan until they’re 26.

What IS Different But that’s not to say some things haven’t changed. It’s no secret that theadministration has taken a very active role in either repealing the ACA, or undermining its enforcement. From reducing the time window in which people can sign up for coverage under the health-care market-place to loosening restrictions on short-term health plans (which rarely meet normal ACA regulations, such as coverage for pre-existing conditions, higher premiums based on age or gender, and often raise premiums on health-care plans in ACA marketplaces), things are in flux at the margins. Policy wonks may remember that back in 2012, the Supreme Court of the United States upheld the individual mandate and, as such, the entirety of the ACA, on the grounds that the individual mandate amounted to a tax on those who did not have health insurance and therefore fell under Congress’ Article 1, Section 8 powers to tax and spend.

That, however, changed in 2017 when Congress passed the Tax Cuts and Jobs Act, which reduced the individual mandate penalty for noncompliance down to zero dollars, but did not eliminate the individual mandate altogether. Because of this (but not coincidentally), litigation in the form of Texas v. Azar was brought, challenging the constitutionality of the ACA in its entirety. In December 2018, a federal district court judge in Texas sided with
this argument and ruled the entirety of the ACA unconstitutional.

Prior to this lawsuit, the current administration appeared to be building up steam toward another attempt at repealing the ACA. However, due to the Texas v. Azar decision, it was decided to postpone that new attempt until after the 2020 elections, when the president predicts his own re-election as well as a renewed Republican majority in both chambers of Congress.

That’s not to say all is quiet on the western front. Although congressional action may not happen for at least another year or so, the Department of Justice filed a letter with a federal court agreeing with the decision of Texas v. Azar and are asking the courts to throw out the entirety of the ACA. With legislation as widely impactful as the ACA, throwing it out entirely would shake up the entire insurance in-dustry, millions would lose insurance, or cover-age for pre-existing conditions, and popular state programs, such as Medicaid expansion or support for biosimilars, would end.

While the Texas decision is likely to be repealed (and with elections in 2020 that could determine the control of the entire federal government), much remains up in the air regarding the future of the ACA. As of right now, I advise everyone to stay the course in terms of health insurance.

If you are currently subject to ACA regulations on health care for your employees, continue forward as if you expect nothing to change, at least until something actually does change. We are nowhere near done hearing about the
ACA, but for now (minus the individual mandate tax), the 2010 law remains in effect for 2019.

About the author

Jeff Spencer, a 40 Under Forty honoree in 2006, is senior vice president for employee benefits at Holmes Murphy & Associates in Kansas City. 

P  | 816.857.7800

E | jeffspencer@holmesmurphy.com