Experts fear ‘chaos’ if Obamacare suspended
Texas judge considers request by 20 states
A federal judge in Texas is weighing a request by 20 states to suspend the Affordable Care Act (ACA), a move that could lead to “chaos” in the health insurance market, some industry experts worry.
The states filed a lawsuit in February to have the health care act – also called Obamacare – declared unconstitutional. In arguments held last Wednesday, lawyers for the Republican-led states did not back off on their request for a preliminary injunction suspending the entire law.
At a minimum, the states asked Judge Reed O’Connor to strike down in their states the parts of the law that prohibits health insurance companies from refusing to cover people with preexisting health conditions or charging them higher rates.
If either happened, the 16 Democratic attorneys general who have intervened in the case, including those in Minnesota and Illinois, would likely seek a stay.
“The market would just be in chaos,” said Karen Bender, an actuary and president of Snowway Actuarial and Healthcare Consulting in Little Suamico, near Green Bay, Wisconsin, one of the states that has asked the judge to suspend the ACA.
Marty Anderson, chief marketing officer for Security Health Plan in Wisconsin, said the same.
“There would be chaos in the entire insurance market across the nation,” Anderson said. “That is the only way to describe it.”
The states in the lawsuit are Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wisconsin.
A preliminary injunction or final ruling declaring the health care act unconstitutional would affect more than
the roughly 17 million people who have gained health insurance through the law, and the people with health conditions.
It would affect the following: children under the age of 26 who are covered by a parent’s health plan; the pricing for health insurance sold to small employers; and out-of-pocket costs of prescription drugs for some people covered by Medicare. Health insurers could also impose annual and lifetime limits on coverage, eliminate annual caps on outof-pocket costs and charge young women higher rates than young men.
“I don’t know how you would administer this if you had an injunction,” Bender said. “Look at all the things that would have to change administratively.”
At the same time, the open-enrollment period for health insurance sold to individuals and families who don’t get health benefits through an employer begins Nov. 1.
What happens next?
In a news release when the lawsuit was filed, Wisconsin Attorney General Brad Schimel took credit with Texas Attorney General Ken Paxton for taking the lead in the lawsuit filed by 18 state attorneys general and the governors of Maine and Mississippi.
The lawsuit was filed with Wisconsin Gov. Scott Walker’s approval.
The Wisconsin Department of Justice did not respond when asked why the states are seeking preliminary injunctions and what happens if an injunction is granted.
In a written response, the Wisconsin governor’s office said Walker has asked the Office of the Commissioner of Insurance to come up with a variety of plan options based on possible outcomes in the case.
The options include drawing on the Trump administration’s new regulations for short-term and association health plans, and issuing emergency orders to ensure the stability of the market. The governor’s office noted that insurers must renew someone’s coverage regardless of his or her health status.
The states’ request for an injunction nonetheless baffles some people in the industry.
“I don’t understand what the end game is,” said Anderson of Security Health.
Amicus briefs opposing the lawsuit were filed by the American Medical Association and by physician groups for family physicians, internists, pediatricians and psychiatrists.
The American Hospital Association, the Catholic Health Association and other hospital groups as well as America’s Health Insurance Plans, the trade group for health insurers, also filed briefs opposing the lawsuit.
An amicus brief supporting the lawsuit was filed by Citizens United, Conservative Legal Defense and Education Fund and other conservative groups, including Gun Owners of America.
Mandate in question
In their lawsuit, the state attorneys general contend that because Congress eliminated the tax penalty for not having health insurance, the mandate to have insurance is no longer constitutional, Katie Keith, a lawyer and health care consultant, has written in her blog on the law for Health Affairs, a policy journal.
They further contend that the mandate is essential to the other provisions in the ACA and therefore the entire law must be declared unconstitutional.
The Trump administration has partially sided with the states, agreeing the mandate that people have health insurance now is unconstitutional.
The administration also contends the law’s provisions that bar health insurers from denying coverage or charging people more based on their health cannot work without the mandate and must be struck down.
Pre-existing conditions targeted
The protections for people with preexisting health conditions are the most popular provision in the ACA and have support across party lines.
The Trump administration did not ask for a preliminary injunction but did ask the judge for a declaratory judgment that the provisions on pre-existing health conditions are invalid beginning on Jan. 1. A ruling in the administration’s favor is likely to be appealed but still would cause turmoil in the insurance market.