Despite Health Care Debate, Don't Expect ACA Relief

Parties take positions with the 2020 elections in mind

Stephen Miller, CEBS By Stephen Miller, CEBS April 3, 2019
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The U.S. Justice Department recently gave its support to a district court ruling that the Affordable Care Act (ACA) is unconstitutional, a case that is expected to eventually be heard by the U.S. Supreme Court. Within days, House Democrats introduced a bill to defend and strengthen the ACA.

These moves, political analysts say, indicate that President Donald Trump and the Democrats are positioning themselves for the 2020 presidential and congressional elections. In the meantime, employers must stay compliant with all ACA coverage and reporting requirements.

Targeting the ACA

On March 25, the Justice Department agreed with a controversial ruling last December by Judge Reed O'Connor of the federal district court for the northern district of Texas. He ruled in Texas v. United States that the ACA should be struck down entirely. O'Connor's decision, which does not absolve employers from complying with the ACA, said that because Congress eliminated as of Jan. 1, 2019, the individual-mandate tax penalty on people lacking ACA-compliant health coverage, the ACA "can no longer be sustained as an exercise of Congress's tax power."

The suit against the ACA was filed last year by a group of Republican state attorneys general and others opposed to the statute. The appeal is being led by Democratic state attorneys general.

O'Connor allowed the law to stand while his judgment is under appeal to the 5th U.S. Circuit Court of Appeals in New Orleans, which is expected to issue its decision later this year. Democrats, who now have a majority of seats in the U.S. House of Representatives, are expected to file a brief with the 5th Circuit in support of the constitutionality of the ACA.

Whichever way the circuit court rules, the losing side is likely to file an appeal to the Supreme Court.

That appeal, however, may not go before the Supreme Court until 2021, "and there's an election in 2020, so who knows which party will be in control" of the presidency and federal government at that time, said health benefits consultant Richard Stover, a principal in the Secaucus, N.J., office of HR advisory firm Buck.

[SHRM members-only toolkit: Complying with and Leveraging the Affordable Care Act]

A Democratic Response

On March 26, the Democratic leadership of the House introduced new legislation to strengthen and expand the ACA—the Protecting Pre-Existing Conditions and Making Health Care More Affordable Act of 2019—and posted a one-page summary.

The bill "is devoted to reversing changes made by the Trump administration since 2017," wrote Katie Keith, a former research professor at Georgetown University's Center on Health Insurance Reforms and a contributor to the Health Affairs blog.

She noted that the legislation would stop the administration from enforcing its 2018 rules to expand the availability of health care coverage that is incompatible with the ACA. Access to association health plans, through which small employers can avoid some of the ACA's coverage requirements that apply only to the small-group market, would again be limited. On March 28, a federal district court in Washington, D.C., struck down the rule, and the administration is expected to seek a stay of the ruling and appeal the decision.

The Democrats' bill would also halt the administration's go-ahead for short-term plans that don't comply with all of the ACA's consumer protections, such as coverage for pre-existing conditions. Any substantially similar future guidance by the administration that would allow insurers or employers to provide coverage that is not fully compliant with the ACA would be barred, as well.

The proposed legislation also would:

  • Expand the availability of ACA subsidies to people in additional income brackets.
  • Make ACA premium tax credits more generous.
  • Restore full funding to annual initiatives to promote insurance enrollment through the ACA marketplace and pay "navigators" to help people enroll.
  • Rescind recent guidance that gave states more flexibility to modify ACA coverage requirements.

But, Stover said, if the House passes legislation to protect the ACA, "the Senate won't hear it, and the president certainly wouldn't sign it. From a legislative standpoint, it's hard to envision Congress enacting any kind of legislation with a split House and Senate and a president opposed to keeping the ACA."

If the House passes legislation to protect the ACA, 'the Senate won't hear it, and the president certainly wouldn't sign it'. 

Democrats, nevertheless, are also holding hearings on various ACA issues that could spur them to introduce additional legislation.

Forward to 2020

As they did in the 2018 congressional elections, Democrats "plan on making health care a campaign priority" in 2020, said James Klein, president of the Washington, D.C.-based American Benefits Council, which represents benefit plan sponsors.

Speaking March 25 at the MetLife National Benefits Symposium in Washington, D.C., Klein summed up the Democrats' strategy this way:

  • Protect the ACA in the short term.
  • Create a larger role for government in the long term.

Some congressional Democrats and most of the party's announced presidential candidates now support some version of "Medicare for all." This could mean either they favor a fully government-paid health care system that prohibits private and employer-sponsored health insurance except for supplemental coverage (as under the Medicare for All Act, which is endorsed by more than 100 House Democrats), or a system that permits private insurance but allows more people to buy in to Medicare.

Medicare for all "excites the Democratic base but hands the Republicans a campaign [opportunity]," Klein said, since most voters favor access to private and employer-sponsored health coverage.

The preference for private and employer-sponsored health insurance was shown in a telephone poll of 800 voters conducted on election night last November for the American Benefits Council. In discussing the survey results, Klein noted that when asked which source they trust to provide high-quality health care coverage, voters responded:

  • An employer plan (48 percent).
  • The individual health care market (20 percent).
  • A federal government plan (15 percent).
  • A state government plan (10 percent).

In the same poll, 71 percent of respondents said they support "cooperation and compromise from both parties" as their favored approach to passing health care legislation. Just 16 percent favored legislation developed only by Democrats, while 10 percent wanted to see legislation only by Republicans.

Despite the voters' clear preference, don't expect Washington to embrace a bipartisan approach to health care anytime soon, say political analysts.

Republican Dissent

As part of their platform for 2020, a growing number of Republicans in Congress want to focus on health care steps such as increasing cost transparency to encourage competition among health care providers. Some congressional Republicans see the court challenge to the ACA as a distraction, The Wall Street Journal reported. They fear that the administration's support for overturning the ACA could strengthen the Democrats' charge that Republicans want to deny coverage to people with pre-existing conditions and scuttle other popular consumer protections that the ACA put in place.

Given that Democrats control the House, President Donald Trump tweeted on April 2 that Republicans would wait until after the 2020 election to hold a vote on a replacement for ACA—with the hope that the GOP would retake the House and keep the Senate, and that he will be re-elected. "Republicans will always support pre-existing conditions," he added.

 Visit SHRM's resource page for the Affordable Care Act

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