Gabriel Perna | November 11, 2020
On Tuesday, November 10, the Supreme Court heard the California v. Texas case that will determine the fate of the Affordable Care Act and the millions who rely on it for health insurance. The early reaction was widespread: multiple Justices appeared to be signaling that they would not overturn the ACA.
“Like the previous challenges to the Affordable Care Act decided by the Supreme Court, this case will generate a lot of interest and concern. But we do not believe that the Supreme Court is likely to change the core individual market reforms under the Affordable Care Act,” Oscar Health CEO Mario Schlosser told Health Evolution.
What the Justices said
Justices Stephen Breyer, Elena Kagan, Sonia Sotomayor, and Brett Kavanaugh, as well as Chief Justice John Roberts asked questions that many media outlets interpreted as suggesting that they will leave the ACA in place.
“It does seem fairly clear that the proper remedy would be to sever the mandate provision and leave the rest of the law in place,” Kavanaugh said during the hearing. Roberts added to Texas Solicitor General Kyle Hawkins (who argued the ACA was unconstitutional): “I think it’s hard for you to argue that Congress intended the entire act [to] fall if the mandate were struck down, when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the act.”
If those five justices vote to uphold the ACA, it would be enough to keep it in place. A few hours after the Court argued on the law, President-elect Joseph R. Biden Jr. said that the attempts to make the law unconstitutional were “simply cruel and needlessly divisive” and called the consequences a matter of life and death for many Americans. Vice President-elect Kamala Harris added that getting rid of the Affordable Care Act will be a backward step and strip people of pre-existing conditions.
The Court is made up of three judges (Justices Kavanaugh, Neil Gorsuch, Amy Coney Barrett) appointed by President Trump, who supports any efforts to end the law. While the proceedings may have provided us clues about how the Court will decide, it will not be publicly known until June of next year.
How two health plan CEOs are expanding
Uncertainty about the ACA’s fate hasn’t stopped ACA insurers from moving forward on plans for 2021.
In June, Oscar Health, a tech-driven insurance company, announced that it will be expanding individual and family plans to 18 states and 47 markets in 2021. The company also announced a collaboration with health system MercyOne to offer individual and family plans through the ACA marketplace in the state of Iowa.
“We are often asked to respond to attempts to weaken or repeal the individual market, and we have always said that we don’t expect there to be an impact on our business. Thus far, we have been proven right. The individual market remains healthy, despite challenges to it over the years,” Schlosser said.
Schlosser added that because Oscar Health built everything in-house, the New York-based company can take advantage of new opportunities and respond to changes very quickly. He said this was demonstrated by how quickly Oscar stood up its COVID-19 risk assessment and testing site locator in March.
Schlosser is not alone in projecting confidence over the fate of the Supreme Court case. In a webcast hosted by University of Pennsylvania Leonard Davis Institute of Health Economics, Allison Hoffman, Professor of Law, University of Pennsylvania Carey Law School, said that the case was weak because states would have to prove there was actual harm done to them through the ACA by imposing the individual mandate. The problem is the penalty for the mandate is zeroed out.
“The Supreme Court could look at this and say, ‘No one has been harmed by a law that has no penalty and this case has no grounds to stand on.’ They could toss it out on those procedural grounds,” said Hoffman. Another panelist, Mark Pauly, Bendheim Professor, Department of Health Care Management, and Professor of Business Economics and Public Policy, The Wharton School, said “the smart money is [the Supreme Court] won’t throw out the ACA.”
In fact, Centene is progressing toward the future despite the ACA’s uncertain future, much like Oscar. Centene CEO Michael Neidorff said during a recent earnings call that he was confident the law would be upheld.
“I don’t believe that when push comes to shove they really want to put all these people during the height of a pandemic on the street with no insurance,” Neidorff said. Centene has plans to expand marketplace health insurance plans in 400 new counties across 13 states in 2021.
Their confidence was mirrored by several other legal experts. Dean Rosen, partner at Mehlman Castagnetti Rosen & Thomas, says he doesn’t think the suit is strong enough to strike down the whole law.
For Schlosser and Oscar Health, regardless of the consequences of this case, the company will continue to focus on ensuring its members have access to affordable health care coverage. His advice echoes a collaborative tone that has become more commonplace as the health industry has fought the COVID-19 pandemic.
“My comment to other health care leaders is more than advice – it’s a call for collaboration,” Schlosser said. The health care system as it exists today has a longstanding history of complex regulations and processes that won’t change overnight. We need to work together to unearth every opportunity, down to the hyperlocal level, and implement new strategies that prove the value of enabling innovation that reduces costs and improves outcomes.”