Approximately 18% of the U.S. economy, the largest in the world, is represented by the health sector, which suggests that there always will be something occurring within that domain that will prove to be newsworthy. Typical stories in the media and relevant topics in policy discussions revolve around the central issues of cost, quality, and access. The last item is guaranteed to continue to attract significant attention as long as there are any individuals in this country who lack health insurance coverage.

The Patient Protection and Affordable Care Act was signed into law by President Barack Obama on March 23, 2010. Usually referred to as either the ACA or Obamacare, this key piece of legislation has been in the news since its various provisions began to unfold. Its enactment was supported wholly in Congress by Democrats in both legislative chambers, without a single Republican vote. That outcome alone essentially assured that the years ahead would be marked by strenuous efforts to repeal and replace its most important features either in whole or in part. Republicans came close to repealing the ACA in 2017 when they were the majority in both the House and the Senate and President Donald Trump occupied the White House, but the attempt did not meet with success, albeit by a close margin. Failure in Congress did not mean that opposition fervor would be diminished, however, as repeal efforts then shifted to the judicial arena.

Repeal Of the Individual Mandate Penalty Set The Stage For Repeal Of The ACA

As part of a successful attempt to overhaul U.S. tax law aimed at energizing the economy, Republicans were able to zero out the individual mandate penalty in 2017. Once that happened, they insisted that a mandate stripped of its penalty for not purchasing health insurance meant the provision no longer was enforceable and could not be considered as being constitutional. Because the mandate is viewed as being such an essential component of the Affordable Care Act, eliminating it led to a claim that the entire law now should be struck down. A federal district court in Texas subsequently declared the ACA invalid in December 2018.

Twenty-one Democratic attorneys general and the House of Representatives then appealed this ruling to to the Fifth Circuit. That court partially affirmed the district court in 2019 in a 2–1 decision, agreeing that the mandate absent a penalty is unconstitutional. Significantly, this narrow majority ruling did not include what should be done with the ACA as a whole. Instead, the case was remanded back to the Texas district court for a more complete severability analysis. A main issue awaiting resolution is whether the mandate can be severed from the ACA, leaving the rest of the law to continue to be constitutional. Meanwhile, the Democratic attorneys general have appealed the ruling by the Fifth Circuit to the U.S. Supreme Court. Whether it will accept the case and deal with it in 2020 is unknown at this juncture.

PCORI Remains In Effect While Some ACA Taxes Are Repealed

The Patient-Centered Outcomes Research Institute (PCORI) was established by the ACA to promote comparative effectiveness research to assist patients, clinicians, purchasers, and policymakers in making informed health decisions. Although it enjoyed widespread support from the time of inception, detractors viewed it as a politically-driven program with attendant dangers associated with central planning. During 2019, there was some opposition to reauthorizing PCORI. Instead, the Institute enjoyed bipartisan support and its funding was reauthorized for 10 years as part of appropriations legislation described on page three of this issue of the newsletter.

That same appropriations package affected the ACA in other important ways. Members of Congress fully repealed the health insurance tax beginning in 2021, along with the so-called Cadillac tax on beneficiaries who have expensive insurance policies, and the medical device tax beginning in 2020. Repeal of the medical device tax always enjoyed bipartisan support because many states have companies affected by it. A potential downside is that these taxes were intended to cover the costs of expanding health insurance coverage under the law. It is estimated that repealing them will result in the loss of approximately $400 billion in revenue over the next ten years.

return to dec 2019 - jan 2020 trends

HEALTH REFORM DEVELOPMENTS

Repeal Of the Individual Mandate Penalty Set The Stage For Repeal Of The ACA

PCORI Remains In Effect While Some ACA Taxes Are Repealed

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