The Supreme Court once again upheld the Affordable Care Act, providing another lifeline to President Obama’s landmark legislation. This is the third Supreme Court opinion upholding the law.
The case, California v. Texas, was brought by the state of Texas, and joined by nineteen other states, to challenge the constitutionality of the individual mandate, a provision requiring most individuals to purchase health insurance. The individual mandate imposed a financial penalty for those who failed to purchase insurance.
Previously, the individual mandate was allowed as an exercise of Congress’ taxing authority. In the 2017 Tax Cuts and Jobs Act, the financial penalty was set to zero, leading to the current litigation. The plaintiffs in California v. Texas argued that when the financial penalty is reduced to zero, the individual mandate is no longer a tax, and therefore is unconstitutional. Further, the plaintiffs argued that the individual mandate was so closely linked to the entire Affordable Care Act that the entire law must be struck down.
The court sidestepped the key question of whether the individual mandate was constitutional. The Court held Texas does not have standing to bring their claim, meaning the plaintiffs could not show how they were harmed. Seven Justices agreed that there was no direct or indirect harm to the plaintiffs in state-operated medical insurance programs.
After more than a decade of political turmoil, the Affordable Care Act is set to be strengthened for the first time in several years. As part of President Biden’s American Rescue Plan, subsidies were expanded for individuals purchasing insurance in the marketplace. Insurance companies which initially fled the ACA exchanges are now returning, due to increased government aid. Democrats in Congress have introduced legislation to build upon the ACA with expansions to Medicaid and Medicare.
As part of President Biden’s COVID relief strategy, the President directed the Department of Health and Human Services to establish a broad special enrollment period, which extends through August of 2021. So far, more than 800,000 people have enrolled in the insurance marketplace during the special enrollment period.
To find out how the expansions in government aid may affect the insurance market and your business, reach out to the attorneys at Rock, Fusco & Connelly, LLC.