Editor’s Note: Editor’s note: This story originally published on September 21, 2020. It has been updated with additional information ahead of oral arguments.
The future of the Affordable Care Act is once again in jeopardy.
Though his time in the White House is limited, President Donald Trump now has a better chance of fulfilling his longstanding promise to kill the landmark health reform law, but in the courtroom instead of Congress.
The Supreme Court is scheduled to hear oral arguments Tuesday in a case brought by a coalition of Republican state attorneys general and the Trump administration, who argue the law’s individual mandate is unconstitutional, and the entire law must fall.
If the court wipes away Obamacare, it would have a sweeping impact on the nation’s health care system and on the lives of tens of millions of Americans – not only for the roughly 20 million people who’ve gained coverage on the Affordable Care Act exchanges and through the expansion of Medicaid to low-income adults. The law is also what allows parents to keep their children on their health insurance plans until age 26 and obtain free mammograms, cholesterol checks and birth control.
But one of its most popular provisions is its strong protections for those with pre-existing conditions, including barring insurers from denying coverage or charging higher premiums based on people’s health histories. Nearly 54 million Americans – or 27% of non-elderly adults – have pre-existing conditions that would make them uninsurable in the individual market prior to the law, according to the Kaiser Family Foundation.
“The implications of the court case could stretch far and wide,” said Cynthia Cox, director of Kaiser’s Program on the ACA. “Virtually every American has been affected in some way by the Affordable Care Act.”
And as the coronavirus pandemic and resulting economic downturn grip the nation, the Affordable Care Act serves as the safety net for the millions of Americans who’ve lost their job – and their health insurance along with it. Just over 11 million people were unemployed in October, up from 5.8 million in February.
Current official data on enrollment increases has yet to be released, but a recent Families USA tally of state data shows that 4.3 million people have enrolled in Medicaid since February, and the numbers are likely to balloon further in the near future.
And nearly half a million Americans turned to the federal Obamacare exchanges after losing health insurance coverage in the first five months of 2020, up 46% from the same period last year, according to federal data. Sign ups surged in April and May.
Plus, some states that run their own exchanges have also seen higher-than-usual activity during special enrollment periods this year.
An estimated 700,000 people have or will select Affordable Care Act plans this year after losing income and access to job-based coverage due to the pandemic, according to an Urban Institute analysis from July.
A majority of Americans, regardless of party, want the law’s protections for those with pre-existing conditions preserved, according to Kaiser. As for the law itself? The answer is split along party lines. A majority Democrats and independents want to retain it, but more than three quarters of Republicans would like it overturned.
Here’s what else is at stake:
The Affordable Care Act has had the greatest impact on the individual market, which was largely unregulated prior to the health reform law.
In addition to banning insurers from basing coverage on people’s medical histories, the law ended the practice of insurers imposing annual or lifetime caps on benefits, and it also placed limits on annual out-of-pocket spending. It mandates that insurers provide more comprehensive benefits, including medication, maternity and mental health. It prevents insurers from charging women more and restricts premiums for older folks to no more than three times those of young adults.
Obamacare set up health insurance exchanges to allow Americans to shop for individual policies and created federal subsidies so low- and moderate-income enrollees could buy plans for less than 10% of their income. It also limits the deductibles and co-payments for lower-income policyholders.
About 11.4 million people signed up for coverage on the marketplaces for 2020, down from a high of 12.7 million in 2016. Several million more purchase individual plans outside of the exchanges. They cannot apply for subsidies but receive all of the other benefits.
Many consumers, however, have not been happy with the changes the Affordable Care Act wrought – particularly because they caused premiums to spike. Many middle class Americans who don’t qualify for subsidies have dropped their coverage, saying it’s now unaffordable.
The Trump administration has sought to undermine the law by broadening alternative coverage options – such as short-term health policies – that don’t have to adhere to all of Obamacare’s provisions, particularly those protecting people with pre-existing conditions. As a result, many of these plans have lower premiums.
Trump signed an executive order in September that says it’s US policy to protect people with pre-existing conditions, but administration officials didn’t specify how that would be enforced if the Affordable Care Act is overturned.
Before Obamacare, most Medicaid enrollees were low-income children, pregnant women, parents, the disabled and the elderly.
The health reform law opened up the program to low-income adults with incomes of up to 138% of the poverty threshold – currently about $17,600 for a single person – in states that opted to expand their Medicaid programs. The provision allowed more low-income parents to enroll and provided a new pathway for adults without dependent children to gain coverage.
So far, 38 states and the District of Columbia have expanded Medicaid or passed ballot measures to do so. Roughly 12 million Americans have gained coverage under this provision, according to Kaiser.
The federal government paid 100% of the costs of the expansion population for the first three years and slowly lowered the reimbursement rate to 90%, where it will remain.
The Affordable Care Act has meant lower premiums, deductibles and cost-sharing for the more than 60 million senior citizens and disabled Americans enrolled in the program.
The health reform law made many changes to Medicare. It slowed the growth of payment rates to hospitals and other providers, reduced payments to Medicare Advantage plans and improved benefits for enrollees.
Under Obamacare, Medicare beneficiaries receive free preventative benefits, such as screenings for breast and colorectal cancer, heart disease and diabetes.
And the Affordable Care Act helped close the gap in Medicare’s drug coverage and was on track to completely eliminate it by 2020. (The Bipartisan Budget Act of 2019 accelerated the timeline to 2019 for brand-name drugs.)
But the law did result in higher costs for more affluent beneficiaries. The law initially froze the threshold for the Medicare premium surcharge at $85,000 for individuals and $170,000 for couples, so more people became subject to it. That freeze has now been lifted so the thresholds are updated annually. They are currently at $87,000 for individuals and $174,000 for couples.
The Affordable Care Act also added a premium surcharge on drug coverage for higher-income enrollees.
Obamacare requires that companies with at least 50 employees provide affordable insurance to their staffers who work more than 30 hours a week.
This mandate didn’t have a major impact on the 150 million-plus workers who are insured through their jobs. Most larger employers already offer coverage for full-time workers. However, setting the bar at 30 hours a week prompted some employers to extend coverage to more of their staff, since many companies had considered that threshold to be part-time.
Also, the law allows children to remain on their parents’ plans until they turn 26. This has proven to be one of the more popular Affordable Care Act provisions and has helped lower the uninsured rate of this age group.
Workers also no longer have to pay for contraceptives and preventative screenings, such as colonoscopies and mammograms. The law requires these be provided free of charge.
The Affordable Care Act also prohibits employers from imposing annual or lifetime limits on benefits and caps out-of-pocket spending.
Obamacare also had an impact on employees who work at companies with fewer than 50 workers. Insurers can no longer ban workers with pre-existing conditions or ask them to pay more. The law requires plans to cover an array of benefits, including maternity, mental health and prescription drugs. And it limits insurers from charging older workers premiums more than three times those of younger workers.