What’s at Stake as the ACA Hangs in the Balance?

Last month, as COVID-19 cases in the U.S. soared and the presidential election took center stage, a legal challenge to the Affordable Care Act (ACA) came before the U.S. Supreme Court.

When the arguments were said and done, many supporters of the ACA were left optimistic that the decade-old legislation would survive the legal challenge. But the case, California v. Texas, reminds us how far we’ve come since the ACA was passed 10 years ago — and how vast the impact would be if the law were to be overturned.

A new resource from CHI lays out key provisions of the ACA and implications for health coverage in Colorado if the law were repealed in full.

What’s Up for Debate?

Playing offense is the state of Texas, which — along with 17 other states and two individuals — argues that the entire ACA needs to be struck down. They assert that the ACA became unconstitutional when Congress set the penalty for those who don’t have insurance (“the individual mandate”) to $0 in 2017.

Arguing in defense of the ACA is a group of 21 other states, led by California. They argue that the zero-dollar individual mandate is not unconstitutional, and even if it were, that small piece of the ACA can be separated — or “severed” — from the rest of the act.

There are several questions before the Court:

Do parties on both sides have legal standing? In other words, do they have the right to be arguing this case in the first place?

If so, is the individual mandate unconstitutional?

And if the individual mandate is unconstitutional, can it be severed from the rest of the ACA? Or would the entire ACA need to be struck down with it?

A decision is expected by June 2021. Depending on the justices’ answers to these questions, we expect to see one of three outcomes: 1) the ACA will remain intact; 2) the individual mandate will be deemed unconstitutional, but the rest of the ACA will remain untouched; or 3) the entire ACA will be repealed.

Option 3 is probably the least likely outcome, but for many stakeholders, it is also the most concerning. The ACA is a far-reaching piece of legislation that, over the course of the past decade, has dramatically changed many aspects of our health care system. What would its repeal mean for Coloradans?

What’s at Stake – and What’s Not – in Colorado?

It’s hard to overstate the breadth and magnitude of the impact if the ACA were to fall.

The ACA has touched nearly every aspect of our health care system. For example, it established provisions that improve quality of care and help keep patients safe from preventable errors and infections. It created the Center for Medicare and Medicaid Innovation, which funds initiatives that reexamine how we provide and pay for care, including the Colorado State Innovation Model (SIM). It opened a pathway for the FDA to approve a new type of drug (“biosimilars”), and it ensures that employees have a private space to breastfeed at work. Even the calorie information listed on your local fast food restaurant’s menu — that’s from the ACA, too.

But of all the ways that the ACA has changed health care in the United States, for most of us, our health insurance coverage is probably the most important.

A new resource from CHI examines the impacts to Coloradans’ health coverage if the entire ACA were repealed.

In short? The impact would be extensive — and complicated.

If the Supreme Court rules to repeal the ACA, the number of uninsured Coloradans under age 65 is projected to double.

Colorado’s uninsured population would grow from 484,000 to 966,000 adults under 65, as people became ineligible for Medicaid and got priced out of the individual market. An estimated 20% of all Colorado adults under 65 would be left uninsured. People of color and people with lower incomes would bear the brunt of the impact.

A repeal of the ACA would also mean the loss of substantial federal funding for the state and its residents.

Under the ACA, more people are eligible for Medicaid, and the federal government pays for most of the cost of their coverage. The federal government also provides subsidies to people who earn less than 400% of the federal poverty level but earn too much to qualify for Medicaid. If the ACA were repealed, both of these funding streams would dry up.

In total, federal funding for Coloradans’ health care would decrease by an estimated 47%, from $6.3 billion to $3.3 billion — one of the largest potential reductions in funding in the nation. Without these federal dollars, it would be nearly impossible for the state to sustain the current level of coverage and financial assistance.

Other measures that protect consumers are also on the line.

For instance, the ACA bans insurers from imposing annual or lifetime limits — caps on the amount they will cover for a patient in a given year or over the patient’s lifetime. Before the ACA, it was not uncommon for people who required expensive care to go into debt or declare bankruptcy in order to access the care they needed. If the ACA were repealed, we could expect a resurgence in those stories.

On the bright side, the state of Colorado has some protections in place that would shield Coloradans from other major changes to their coverage.

Colorado legislators and regulatory officials have effectively written aspects of the ACA into state law over the years. This guards against some changes at the federal level.

For instance, Colorado state law guarantees that young adults can stay on their parents’ health plans until they are 26 years old, just as the ACA does.

Like the ACA, Colorado protects people with pre-existing conditions from being denied coverage or charged higher rates on the basis of their medical histories.

Older Coloradans’ premiums can’t be more than three times higher than younger Coloradans’ premiums, just as the ACA stipulates.

And the 10 “essential health benefits” that must be covered by private insurers under the ACA — things like prescription drugs, preventive services, and mental health care? Those are all required by Colorado law, too.

Many states do not have these protections in place and would be subject to even more extensive impacts if the ACA were repealed.

What’s Next?

The Supreme Court is expected to announce a ruling by early summer at the latest. In the meantime, there’s no shortage of work to be done.

The ACA was not a silver bullet. Ten years after the law’s passage, too many Coloradans remain uninsured, saddled with high premiums and out-of-pocket costs, and unable to access the care they need. And in recent months, the pandemic has placed our health care system under unprecedented stress and left thousands of Coloradans to navigate a public health emergency without jobs, health insurance, or any guarantee of economic security.

The vulnerability of the ACA in this moment reminds us that both state and federal policy play a critical role in shaping our health care system — and, in turn, our health.

California v. Texas highlights opportunities for Colorado’s policymakers to shore up aspects of the system that might be vulnerable and to carry the torch forward where work remains.

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