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The ACA will (apparently) survive because it is a plan in the New Deal tradition


[Written with Dan Skinner of Ohio University]

Exactly one week after Election Day, the Supreme Court heard oral arguments in California v. Texas, the most recent challenge to the ACA brought by numerous Republican Attorneys General and supported by the Trump administration. The case represents the latest conservative effort to get unelected judges to strike down the Affordable Care Act. The oral arguments, however, strongly suggest that the Court is mostly hostile to this challenge, with Chief Justice John Roberts and Justice Brett Kavanaugh indicating that they were disinclined to do what a Republican Congress refused to and even the Court’s other conservatives sounding largely unconvinced.  If these indications are correct and the ACA survives (although perhaps without the now vestigial “mandate,”) there might be a revival of familiar claims that the ACA was fundamentally a “Republican” plan. But the truth is the opposite: the ACA has proven durable because it is a popular law squarely in the progressive traditions of the New Deal and Great Society. If the now-repealed tax penalty for not carrying insurance is formally excised from the ACA, it severs the only remaining connection between the ACA and the Heritage Foundation plan to which it is so often inaccurately compared.

The latest challenge to the ACA presented two questions. The first is whether the ACA’s so-called “individual mandate” is now unconstitutional because as part of its 2017 tax cut Congress set the tax at $0. The 5th Circuit Court of Appeals held that because the Supreme Court’s 2012 decision upholding the ACA justified the mandate as an exercise of the federal tax power, it is now unconstitutional. The second question is whether the mandate is “severable” from the remainder of ACA if it is held unconstitutional or whether the entire statute, including its historic Medicaid expansion and the provisions guaranteeing the issue of health insurance to people with pre-existing conditions, would have to be struck down. 

Because the mandate has been effectively eliminated, it is the severability question that is now by far the most important. Supporters of the ACA have rightly feared that the ACA could be overturned by a Court that has a 6-3 Republican majority, and given the success the legal arguments have enjoyed among Republican judges in the Circuit and District Courts these fears were not irrational. President Trump saying in a 60 Minutes interview that “it’ll be so good if [the Court] end[s]” the ACA did little to allay fears that the Court would take healthcare away from more than 20 million people. Given that striking down the guaranteed issue provisions alone would be devastating for millions of Americans, especially disabled and other Americans with medical histories and chronic conditions that make them expensive to insure, concern about these lawsuits was well justified. 

Today’s oral argument suggests, however, that Trump will not get his wish. Justice Kavanaugh declared that “I tend to agree…that this is a very straightforward case for severability under our precedents, meaning that we would excise the mandate” (without impacting other provisions within the ACA). Even more strikingly, Chief Justice Roberts suggested that Republican members of Congress probably wanted the Court to strike down the ACA when it zeroed-out the mandate, he dismissively concluded “that’s not our job.” If Congressional Republicans wanted the ACA ended, in other words, it was their responsibility, and a majority of the Court appears unwilling to do their dirty work.

            But wherever the court ultimately lands on the ACA, there is a broader history worth considering. The Court deciding the fate of the ACA on the technical question of “severability” provides an opportunity to finally dispense with an oft-repeated but fundamentally untrue narrative: namely that the ACA is at base a “conservative” idea. Even some strong liberal supporters of the ACA, like the Nobel Prize-winning columnist Paul Krugman, have suggested that the ACA is fundamentally modeled on ideas put forth by the Heritage Foundation in 1989. 

But the Supreme Court’s likely conclusion that the mandate is easily servable from the rest of the ACA should act as a powerful reminder that it is the individual mandate alone that has any common ground in Republican healthcare policy preferences. Apart from the mandate, the ACA and the Heritage Plan are radically different. The ACA used a combination of the Medicaid expansion, subsidized and regulated individual markets, the preservation of employer-provided insurance, and tough new regulations of the insurance industry (including guaranteed issue and minimum coverage requirements) to try to make comprehensive healthcare coverage available to as many people as possible. The Heritage Plan was based on the opposite premise — that comprehensive health insurance is a bad thing. It sought to effectively end Medicare, Medicaid, and employer-provided coverage and replace them all with skimpy catastrophic plans that would fail to cover many common procedures and leave large amount of out-of-pocket expenses for individuals.

Even the one point the ACA and the Heritage Plan had in common, the mandate, was a source of controversy within the Democratic Party. In the 2008 primaries, Hillary Clinton strongly defended the mandate as essential to avoiding the kind of “death spiral” that occured in Washington state when it required insurers to guarantee the issue of insurance to all applicants without requiring people to have insurance, resulting in young, healthy people exiting the market and escalating increases in premiums. Eventual Democratic nominee Barack Obama disagreed, suggesting that a tax penalty for not carrying health insurance would be politically unsustainable.

Obama was roundly criticized for pandering to voters and quickly reversed course once he was elected. But it turns out that the 2007 version of Obama had a point. While the potential for a death spiral is real, it is possible to keep relatively young people in healthcare markets using the carrot as well as the stick. And since Republicans have effectively repealed the mandate, this is exactly what has happened. There has not been a death spiral, in part because the generous subsidies (especially at the lower ended of the spectrum of eligibility) make health insurance a good deal for many individuals. If the Congress wants to broaden coverage, it would be much better to do so by some combination of expanding public insurance programs and offering more generous tax credits to people who purchase healthcare on private markets than by restoring the mandate, which has always been by far the most unpopular part of the ACA.

            And getting rid of the mandate will have the additional positive effect of severing any last link between the ACA and Republican healthcare initiatives. Both a Republican Congress and President and now most likely a Republican Supreme Court have refused to return to the status quo ante for the same reason the centerpiece welfare programs of the New Deal and Great Society have endured — the ACA is effective and popular.

While we agree with critics on the left that American health insurance policy remains substantially inferior to the genuinely universal programs of other advanced liberal democracies, from this point of historical clarity we can better appreciate just how much the ACA has done to improve American health care. By far the most consequential part of the ACA was the expansion of Medicaid up to 138% of the federal poverty level. This brought health care access to millions of Americans. Similarly, few Americans know that the ACA includes important and innovative provisions that provide new support for improving the American health professions workforce, especially in rural and underserved areas. Nor do most Americans know that the ACA took major steps toward requiring that well-capitalized non-profit hospitals actively work to improve the communities in which they are located. And in highly relevant news, it requires that vaccines be made available free during a pandemic.  

None of these have anything to do with the mandate, and it is appropriate for the Court not to interfere with them. And if the mandate — which Republicans falsely claim is the linchpin of the 906 page law – is finally dead, it’s time for Democrats to defend the bill for what it is: a major, even if incremental step toward achieving what Democrats have long championed: a better, more efficient, and more equitable health care system. And we should also be clear that the replacement plan long promised by Donald Trump is never going to appear, for the simple reason that despite the myth of the “Heritage Plan” Republicans do not actually support comprehensive health reform measures. The ACA looks like it had dodged another bullet — but voters in the special Senate elections in Georgia on January 5th should remember that if they want the ACA made more generous rather than consistently undermined, the best remedy is a Democratic Senate.

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