Experts: ACA likely safe from large-scale legal attacks after latest Supreme Court win

Gavel court room lawsuit judge
The Affordable Care Act survived its third massive legal challenge Thursday. Several legal experts say it is likely the last legal broadside the law could face. (Pixabay)

The Supreme Court’s decision to preserve the Affordable Care Act (ACA) for a third time likely spells the end of broad legal challenges to the healthcare law, several experts say.

The court ruled 7-2 on Thursday in the case California v. Texas that a lawsuit from more than a dozen red states did not have standing to move forward. If the lawsuit were successful, the entire law could have been struck down.

Experts say that while large challenges to the law are likely dead, lawsuits over other parts of the ACA are on the horizon.

“I think this marks the end of the broadside challenges to the ACA,” said Nicholas Bagley, a law professor at the University of Michigan, in an interview with Fierce Healthcare. “I could be mistaken, but the court has had three opportunities to consider constitutional and legal challenges to the law as a whole and has turned them away each time.”

The court ruled in 2015 in the King v. Burwell case against a challenge to the law’s authority to dole out tax credits to most states. It also ruled in 2012 in the NFIB v. Sebelius case that the individual mandate was constitutional as long as it was considered a tax.

In the latest ruling, the court decided that the red states did not have standing to bring a lawsuit surrounding the individual mandate. The red states argued in the lawsuit initially filed in 2018 that the individual mandate was unconstitutional since the 2017 tax reform law reduced the penalty for violating it to zero.

The states also argued that if the mandate was unconstitutional, the entire law should go with it.

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The justices did not take up the issue of whether the mandate was severable from the rest of the law. The majority of justices decided that the red states did not prove they were harmed by the individual mandate penalty being zeroed out, since the federal government can’t enforce it.

The tenor of the oral arguments back in November likely sent a message to ACA opponents as well, experts said.

“They seemed annoyed they were hearing another ACA case,” said Nicole Huberfeld, a law professor at the Boston University School of Public Health, referring to several justices during oral arguments. “The court doesn’t want to hear these ACA cases.”

That tenor and the nearly unanimous ruling could also send a message to opponents of the law, even though Justices Neil Gorsuch and Samuel Alito dissented from the majority.

The cases can sometimes be “as much about politics as they are about the law,” added Michael Kolber, a partner with law firm Manatt Health. “A 7-2 decision with several Trump appointees in the majority signals to some litigants and some policymakers and some politicians the direction the court is going on these cases.”

But that doesn't mean the law is safe from legal challenges—they just may become more narrow.

For instance, a new lawsuit making its way through the federal court system called Kelley v. Becerra would tackle the part of the ACA that requires health plans to cover certain preventive services without any cost-sharing requirements.

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The ACA set up the U.S. Preventive Services Task Force to determine the services that all insurers must cover. The lawsuit challenges the constitutionality of the preventive care coverage requirement and argues it is driving up costs for insurers.

The lawsuit is before federal Judge Reed O’Connor, who sided with the red states in California v. Texas.

Bagley said the lawsuit is “very serious,” but it only applies to parts of the law that require no cost-sharing for preventive services such as vaccines. It does not get rid of the entire law.

“If you got rid of it, then it would be significant,” he said. “The public health consequences of allowing insurers to impose costs on preventive services are real, but it is not a full-frontal assault on the ACA as a whole.”