Texas District Judge Reed O’Connor shook the healthcare world late last Friday when he ruled the Affordable Care Act is unconstitutional.
But it could be years before we get a final verdict on that case, according to legal and policy experts who cautioned against jumping to extreme conclusions.
On Monday, 17 Democratic attorneys general asked O’Connor to enter a stay in his decision and a final judgment, and indicated they intend to appeal the case to the Fifth Circuit Court of Appeals as soon as possible.
The Democratic AGs are being led by California's Xavier Becerra. On Wednesday, 11 health organizations from the Golden State, including Blue Shield of California, announced their opposition to the decision (and their "full-throated support" for efforts to appeal it).
The case could well make it to the Supreme Court after that, but probably not until at least its 2020 term, said Georgetown University law professor Katie Keith on a webinar sponsored by the Alliance for Health Policy on Wednesday.
The Fifth Circuit is known as a conservative court, but it could overturn O’Connor’s decision on any number of grounds, Keith added. For instance, the Fifth Circuit has been known to take a hard line on standing. It could say the attorneys general had no grounds for bringing the case in the first place, citing its prior decisions, she said.
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Although “conventional wisdom” says the Fifth Circuit would overturn the District Court’s decision and the Supreme Court would deny the case a writ of certiorari on appeal, Keith said she believes it will reach the SCOTUS. Until then, “we might be living in a little bit of limbo," she added.
And as other legal analysts have noted, Keith reminded the audience that O’Connor issued a declaratory judgment, not an injunction, which means the ACA remains in effect. The U.S. Department of Health and Human Services has confirmed this.
That’s not to say the district court’s decision is without consequence in the near term. In Congress, expect “very political conversations, a lot of allegations, [and] screaming and yelling,” said Rodney Whitlock, Ph.D., vice president of health policy at ML Strategies, on the webinar.
In other words, the decision won’t spur any meaningful legislation. Theoretically, Congress could invalidate the decision by passing “a law that speaks to severability” or by raising the individual mandate penalty to $1 or more. But with Republicans still in charge of the Senate and the White House, the chance either of those bills would come to fruition is essentially nil.
Still, looking toward 2020 and beyond, Democrats know “holding Republicans’ feet to the fire [over this] might be of some value,” Whitlock said.
Meanwhile, “Republicans will talk about their vision of healthcare, but it will be less spurred by Texas v. Azar.”
On the market side, plans will proceed under the status quo for 2019, said Elizabeth Carpenter, senior vice president at Avalere Health. But depending on what course the case takes, there could be less marketplace stability—and higher premiums—in future plan years.
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When insurers submit their rates for 2020 and beyond, they may ask themselves, “What world am I operating in?” she said.
Rates could also vary widely by state; those with their own patient protections would likely fare better than ones that are entirely reliant on the future of the federal law, Carpenter noted. If the entire law is struck down, the industry could respond in a “spectrum” of ways, Keith added.
“I think lawyers could have their own holiday party thinking through what on earth that would look like,” she said.