On Tuesday, July 9th, a panel of federal judges in New Orleans questioned attorneys defending the Affordable Care Act signaling that the U.S. 5th Circuit Court of Appeals may throw out at least part of the 2010 law.
That would set the stage for another showdown before the Supreme Court, which has twice in the last decade been called upon to rule on the landmark law, often called Obamacare.
Such a ruling could also prolong uncertainty over the fate of health coverage for tens of millions of Americans who depend on the law for health insurance and other protections, including the ban on insurers turning away consumers who have pre-existing conditions.
Two judges, both appointed by Republican presidents, focused more on why the law should remain in effect after Congress in 2017 scrapped a tax penalty against people who didn’t have health insurance. That provision was once deemed essential to the law’s program for guaranteeing Americans insurance.
The tax penalty proved to be crucial to upholding the law because the judges concluded that because of the tax penalty, Obamacare can be sustained.
Now, in the current case, Texas and 17 other states argue that the requirement is no longer constitutional because the tax penalty has been eliminated and therefore, the whole law must be invalidated.
If successful, the Texas lawsuit would strip millions of American of their current health plans through the Affordable Care Act and effect seniors in the Part D prescription drug programs.
That would assure that healthcare will once again be front and center on the campaign trail as Trump seeks reelection next year.
There will be a back and forth battle between the states that participate in the Federal Marketplace and those that have their own State Marketplace. Any state that operates under the Federal Marketplace is run by the Federal government while those states that operate their own marketplace oversee operating their own It is these State Marketplaces that will potentially challenge the dismantling of Obamacare. This can be seen firsthand with the states of Pennsylvania and New Jersey announcing that they want to create their one State-Based Marketplace.
The most important piece to keeping the law in place is the tax penalty. The tax penalty essentially forced Americans to purchase healthcare through Obamacare. Without that important piece, it is very difficult to uphold the law since Americans can choose to purchase Obamacare or not and there is no consequence for those who don’t.
What is also important to keep in mind is that by eliminating the tax penalty, this allowed Americans who couldn’t afford Obamacare to purchase healthcare through other means such as short-term medical or even cost-sharing plans. It also allowed thousands of Americans who had doctors that didn’t take Obamacare plans to seek refuge elsewhere for coverage. There are plenty of plans out there that provide coverage for pre-existing conditions for basic medical expenses such as office visits, prescriptions and lab work.
Even though Obamacare may not be upheld in the end, that doesn’t necessarily mean that millions of Americans will be without coverage. There will be plenty of options available and the healthcare industry is constantly growing and creating new insurance vehicles and alternatives to Obamacare.
