Health Care in the Courts: Supreme Court Ruling on the Affordable Care Act

This is an unedited transcript.

0:06
Good afternoon, and welcome to another Alliance for Health Policy webinar. I will say at the outset, Happy Juneteenth National Independence Day. We wanted to bring you this webinar right off the heels of the Supreme Court ruling on the ACA. I should say the latest ACA ruling on the ACA. It is another June. The cicadas seem to have disappeared in Washington, we think. And there’s another court ruling to parse over, so thanks for joining us today.

0:36
I’m Sarah Dash, president and CEO of the Alliance, and for those of you who don’t know us, we are a non partisan non-profit, dedicated to advancing knowledge and understanding of health policy issues.

0:50
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1:11
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1:25
And finally, be sure to check out our website, all health policy dot org, where you can find background materials, including a resource list and an expert list, and recording of today’s webinar, as well as any background resources will be made available there soon.

1:40
So the Affordable Care Act is a landmark health policy package. Signed into law on March 2010, it has faced no shortage of political controversy and legal challenges over its 11 year history. one such case, Texas V California began when the Tax Cuts and Jobs Act of 2017 effectively eliminated the individual mandate, provision. It, since worked its way through United States, District Court, Court of Appeals, And now the Supreme Court. And today, I’m so pleased to be joined by an esteemed group of experts to help us understand what happened yesterday, and what are the potential future implications, not only in the legal sphere, but for healthcare coverage, and affordability writ.

2:17
Large: First, we will have joining us, Katie Keith. She is Principal at Keith Policy Solutions, LLC and an Adjunct Professor at the Georgetown University Law Center, where she teaches courses on the Affordable Care Act and LGBT Health Law and Policy. Katie is also an appointed consumer representative at the National Association of Insurance Commissioners, where she represents the interests of consumers in front of state insurance regulators from all 50 states next. We will be joined by Elizabeth Carpenter, who is Head of Advisory Services at Avalere Health, where she specializes in the implementation of the ACA.

2:52
Prior to joining Avalere, Elizabeth was a senior Advisor in the Health Policy Practice at McKenna, Lying and Aldridge, LLP, where she provided government affairs and public policy support to payers, providers, primary exchanges, and states on a wide range of health policy and political issues, and previously had a career on Capitol Hill. And, finally, we’ll be joined by Thomas Barker, who is a partner, at Foley Hoag, and co-chair of the firm’s Healthcare Practice Group. Prior to joining the firm, mister Barker served in a series of senior level positions at the Centers for Medicare and Medicaid Services, CMS at the US. Department of Health and Human Services, during the administration of President George W Bush, including as general counsel of a CMS counselor, to the Secretary of HHS and General Counsel of HHS. And so, we are going to launch today’s discussion by hearing from Katie Keith. Katie will provide past, present, and future legal timeline of this case, and maybe give us a little insight into what’s next, Katie?

3:54
Hi, Sarah. Thank you so much. Thank you for having us. I feel like there’s a group of three experts, has been able to do this multiple times. I feel, like, every year, we get together and talk about getting this way.

4:08
So here we are. So thank you for the opportunity. I think, you know, what the Alliance has been doing, on this case has been incredibly helpful to really explain it to certainly folks on the Hill, but also federal and state officials, and the media and other stakeholders. So thank you. It’s a great opportunity.

4:23
You know, just to even build on, what was, Sarah was saying, this lawsuit, and the very brief history really stems from the changes in the Tax Cuts and Jobs Act in December 2017. And then this lawsuit was filed by a coalition of Republican attorneys general led by Texas, and to individuals in Texas in February of 2018. So it’s been more than three years that we’ve been holding our breath, in terms of what the Supreme Court would do. And we have clarity as of yesterday. So the, the big news here is, that in a 7 to 2 decision, The Supreme Court fully dismiss this legal challenge, California versus Texas. They did so on, what we call standing, and I will give some highlights of that, but for folks who are very interested or want to get in the weeds on standing, happy to do that during the Q and A, or I did a longer post for Health Affairs that you can read up on your heart’s desire on standing.

5:19
But 72 a decision, vast majority of the court, I think, or sounding decision really saying that this group of state plaintiffs’, again led by Texas and the two individuals in Texas are not injured. And even if they weren’t heard, the entire individual mandate is what we call unenforceable. Essentially, it means there’s no reason this case should have been in court standing as a constitutional requirement. Really, we’re not supposed to use the federal courts to be issuing advisory opinions or, you know, you’re not supposed to have anybody can come to court and sue over something they don’t like. The courts under Article three are really there to resolve.

6:00
Genuine cases are controversies meaning there has to be a real dispute between the parties.

6:06
That matters here because anyone who comes to court and sues has to have an injury. It has to be fairly traceable to the person that you’re suing, and it has to be actually addressable by the court.

6:17
And so here, the Supreme Court was kind of focused on that test that I just laid out. They didn’t quite grapple with whether the Penalty list mandate imposes an injury, but they did say that it was not traceable to anything based on that the federal government was doing. And even a decision here to strike down the mandate wouldn’t actually redress the injuries that the two individuals in the States were saying.

6:39
They essentially said this penalty lusts mandate is unenforceable. The government can’t take any action against you if you don’t comply with it. Even if we were to strike down the mandate, Justice Breyer wrote, nothing would happen. And so this would essentially amount to an advisory opinion, which is not what the Federal court system is supposed to be used for. one of my favorite quotes from the decision is, Justice Breyer wrote, There’s no one and nothing to enjoin. There’s no behavior to stop here. This case, you know, in many ways, shouldn’t have made it this far.

7:11
And so, they one thing, I guess for this audience to that, that the lack of enforceability here really cut against both the individual plaintiffs and the state plaintiffs. But Justice Breyer and the court also took on the sort of lack of evidence for the state plaintiffs. You know, Texas and others had argued.

7:28
They are harmed by the penalty, less mandate, because more people, people will still want to comply with the mandate and will enroll in public coverage programs. So maybe Medicaid or the state employee health plan, that will lead to higher costs for Texas. The court said, maybe that would be a possibility, but they really agree with Californian, the house who were defending the ACA here, to say it wasn’t enough proof. And I think, especially for this audience, one key piece of this Texas had really pointed to a 2017 report from the Congressional Budget Office that had estimated that about four million people would continue to enroll in coverage, even without the penalty. The court here said that by itself is not enough. And I know I had I personally had concerns that if one CBO report was enough to give standing for this type of lawsuit, it really would have opened the door, and the floodgates. too many more types of this type of litigation.

8:20
So, I think, a good thing there, but Texas could have had standing, they just didn’t prove it, They didn’t give enough evidence to show that, actually, the, know, having no penalty is going to lead folks to enroll in greater numbers and Medicaid of state employee health plans. The court really recognize that there are other reasons why people would want to enroll in those programs and other benefits that are completely unrelated to the mandate itself.

8:44
one, last thing I want to say in terms of the actual decision is the Court did reject what experts have been referring to as the standing through and severability theory. And this is the idea that even if I’m not harmed from the individual mandate itself, I’m harmed from other parts of the Affordable Care Act.

9:02
The individuals’ had argued that they were harmed by, you know, the insurance market reforms that, you know, having to buy a plan that covers essential health benefits, drives up premiums. And I don’t like that the states had pointed to Medicaid expansion and the employer mandate, and all these other things that they believe harm them as standing. And they said, you know, those provisions are inseparable in their view from the mandate.

9:24
That should be enough to show the harm and show that we have standing to come to court challenge the individual mandate, and have those other parts of the law struck down.

9:34
The court really rejected that theory, particularly for the state plaintiffs. But I think it should apply to the individual plaintiffs’ as well. So I think, especially as this audience thinks about, you know, the next wave of Congressional reforms and how much we do an Omnibus legislation, these days, that theory would have been, I think, very challenging, if accepted by the court. And they did seem to rejected here. The takeaway being, you have to be harmed by the provision of the law that you’re challenging in court. If you’re not harmed by the mandate, there’s, there’s no reason for you to be citing these other things.

10:08
So, from here, what happens next? The Court was very clear, directed the district court judge Rito Connor to dismiss the lawsuit. So, this challenge is certainly on ice.

10:19
I would like to think. It will not come back. You know? The, the, the very small caveat there is Justice Alito, who dissented he was joined by Justice. Gorsuch. He practically invites me this challenge to be Refiled or other litigants to come forward. He really embrace that standing through and separate ability theory. So, you know, I never say never on ACA litigation but I would like to think that’s such a resounding victory, 72, even with a much more conservative Supreme Court than the prior two challenges that we’ve seen.

10:52
Really, I think it’s a clear indication that plaintiffs who want, who are expecting the Supreme Court to come in and make broad changes to the Affordable Care Act, should not waste their time on doing that.

11:01
I think they’ve made very clear after no three major challenges, and less than a decade that they did not have the appetite to make the broad changes that AC opponents in particular might want them to make.

11:12
So that I will maybe stop there on the Court. I know, even though I don’t think we’ll see, maybe, necessarily, the same types of big, legal, existential challenges and court, there’s a ton of ACA litigation out there that continues, and we can sort of get into that.

11:26
one thing I did at least want to flag up top, I said, even yesterday, the Court was scheduled for a conference, on whether it should take, here, insurance companies, appeals, over case for unpaid cost sharing, reduction payments. So, we could learn if they’ll take that case for next term, as soon as it’s Monday. So, on the data there issue in California versus Texas, they’re considering perhaps their next ACA appeal, so I look forward to the questions. I hope that was not too much, I’m standing. But thank you for having me. Say thank you so much, Katie. No, that’s great and I, if I can see you know, I can’t help it because we’ve been surrounded by the cicadas. I’m like, are they really gone, or they, or am I going to step on one like again? So now it’s, it’s very interesting to hear your, your forward thinking analysis, and thank you for that. That great, great overview. And we’ll have lots of questions, I want to remind the audience, and if you do have questions, just feel free to put them in the chat at any time, and we will do our best to address them during the broadcast. So now I’m going to turn it over to Elizabeth Carpenter who will discuss potential implications of the ruling for consumers and key industry stakeholders, I wasn’t …, thanks for joining us.

12:35
Thanks for having me, Anne.

12:38
Thanks for all the cicada talk, right.

12:40
Oh OK, I feel like I’ve been living this decade Yeah.

12:45
And Katie, things for recovering sort of the complexities associated with the case, then, you know, I, I personally am really interested to, see, I do wonder if the Affordable Care Act is one of these sort of domestic policy issues that we’re going to be seeing in the courts, you know, for years and years to come.

13:05
And I think we can all name a couple, other, similar issues.

13:10
But, when I think about stakeholder implications, you know, I really have been thinking about sort of what are the short-term implications of this decision, And then sort of what does this mean for the longer term future of the ACA. And for all, the people in the healthcare system who interacts with the law in one way or another.

13:30
So, in the short term, yeah, there’s no question, from a consumer perspective, that this, you know, creates sort of maximum stability, right.

13:40
There’s no questions about the future of coverage that people are enrolled in. Honestly, as we sort of head to the fall, there should be you know, relatively little confusion about where the ACA’s law are. Not right. So, from a consumer perspective and there really is sort of a big sigh of relief. And I think that theme, you’re feeling transfers over to the provider sector.

14:06
As we all know, you know, for better or for worse, sort of access to health care in this country, you know, really relies in most, if not all cases, on, on health insurance, right?

14:16
Especially if it’s going to be affordable and later, the pandemic and the struggles associated with provider sector, you know, over the past 18 months or so, I imagine also, providers are, like, OK, good, you know, we can, we can continue to see the people who are enrolled in coverage under the law from a plan perspective.

14:38
No.

14:40
Same sort of stability theme, of course, and plans who are participating in ECA markets, their bids were already do, and so, from that perspective, you know, deceives, all of us, a whole lot of chaos. And so, you know, there are many circumstances previously that I can think about this time of year, where we’re like, waiting for some kind of policy decision.

15:07
And, you know, there were questions from plans am I going to have to rebid, dice, or should I have submitted two bids. Am I going to pull out if a certain decision isn’t need?

15:19
And honestly, you know, that is something that no, we are not going to have to experience this year. And I think from a, from a stakeholder perspective, that means that we are likely to see sort of more plans participating in 20 22. Then we saw in 20 21. Similarly, we are more likely to see, the same way that we saw more plans participating in, 20 20, then, we saw in 20 19, and the Like, So, I’m, sort of, positive, positive momentum there.

15:55
As we look to the future, I would ask a couple of questions, one, sort of, we are anticipating a more competitive insurance market. What does that mean?

16:04
Right. We are expecting sort of more choices for consumers, which can be a good thing, and sometimes could add confusion to the market, so it will be interesting to see how that plays out.

16:16
Similarly, it will be interesting to see, you know, as we potentially see more entrants from a planning perspective into the Exchange market, sort of what are those products look like, what are the strategies of plans, and sort of how does that impact what stakeholders or consumers see as they shop for coverage.

16:36
And then finally, and I think this hopefully should be a good lead into what Tom is going to talk about, no. Then the question becomes, OK, sort of, what are the future of college see changes associated with the law? You know, what is the binding administration tried to do via regulation? For example, what does Congress do on issues like a public option? For example, you know, what happens to the temporary assistance approved as part of the American Rescue plan, right?

17:09
So, those are all questions, and, and, you know, a lot of those changes, sort of, on, on poll, you are positive for consumers, you know, potentially are very mixed for plans, based on, sort of, the devil is in the details, right.

17:29
But you kind of, follow that through and say, if no ACA changes, expansions of the law, are going to be made permanent, Congress, is likely going to try to pay for them, sort of, who’s gonna pay for them, government, consumers, other stakeholders. And so that sort of next phase of this discussion has many potential stakeholder implications.

17:53
And then I would just you conclude with sort of where, where he ended up, which is, you know, certainly. You know, there are other cases that we expect to see on the ACA with pretty significant SQL or implications. And I was reading about one the other day related to preventive services. And certainly, you know, that could have really broad implications, not just from the market, for all the stakeholders I just spoke to. So with that, I will pause and look forward to questions and hand things back to Sarah.

18:28
Great. Thank you so much, Elizabeth. And that was, that was a really great overview, I look forward to getting into more of those implications, And we already have an audience question on the Preventive Services case, Kelly V Sarah, so, we will also get into that in the Q and A But, first, I am now going to turn it over to Thomas Barker. Thomas.

18:50
Feel free to do that.

18:54
Thanks, Sarah, and thanks, everyone, for participating today. Good afternoon, or for those of you not on the East Coast. Good morning.

19:01
So I’m going to say a little bit about what I think Congress is likely to do next, in light of yesterday’s decision.

19:10
Are maybe just start off by saying that, as Katie said, you’d like to think that maybe this is the end of the legal challenges for the ACA. But I’m not sure that that’s the case. I think that there are, well, someone just mentioned that preventive services case.

19:26
And there are other cases that are, that are pending, but, but certainly, Yesterdays decision was a significant one, and it really does put an end, I think, to that, Constitutional challenges to the individual mandate, that was enacted as part of the APA, it’s part of the ACA.

19:46
Mean, it seems to be I’ll just say a little bit about what the options might have been for the court yesterday.

19:53
Think that those are good.

19:55
Decided that the case on the issue of severability whether or not the the individual mandate was separable from the remainder of the Act or I guess they could have invalidated the entire ACA but the decision wound up being a fairly narrow decision on the issue of standing, which is Katie mentioned, is a constitutional principle. So, I just wanted to make that point turning now to what I think might happen legislatively and I’ll also say a little bit about what I think might happen in the administration.

20:28
But just in terms of legislative, we, I mean it’s hard for me to see how the Republicans in Congress are going to going to be able to successfully make any significant changes to the ACA, at least in that in the near term. On the Republicans, even though the majorities, democratic majorities in Congress are very, very, very close, only a couple of seats in the house, 50, 50 tie in the Senate. It still seems to me that significant wholesale changes to the ACA by Republicans in Congress. Just that that doesn’t seem to me in the cards anytime soon. I mean, we’ll see what happens after the midterm elections next year.

21:10
But I just don’t see any significant changes being successful, again, because of the democratic majorities in Congress. And what would certainly be an uncooperative administration.

21:23
Becky said, I do think that the Republicans, in Congress, probably will be successful in blocking significant expansions of the ACA. So, it’s hard for me to see how, for example, a public option can pass.

21:41
It’s hard for me to see how any significant incentives for the states, the handful of states that have not taken up the ACA Medicaid expansion, it’s hard for me to see how Congress could take significant steps to increase the incentives, for example, to increase the F map for States that have not taken the Medicaid expansion so far. I think lowering the age of eligibility for Medicare, I can’t see how how backward pass in this, in this closely divided Congress.

22:11
So, I think on the Republican side, the success will come more from walking signet significant initiatives rather than repealing, overturning, or making significant changes to the ACA.

22:26
I will also just point out that the statements that you heard from Republican Leadership of the House and Senate yesterday in my view sort of seem to acknowledge that point. They didn’t, for example, call for repealing and replacing the ACA.

22:42
That seems to be it seems to be not as much of a calling card are not as much of a rallying cry, for Republicans in the house, as it was before.

22:57
I will also just point out that I think it’s possible that, in the next year, and you’re in an app before the midterm elections, I think it’s possible.

23:07
Republicans will try to come up with a larger overall vision of health care in the United States. Some leader McCarthy statement yesterday suggested that that may be what they’re trying to do.

23:18
I’ll just point out that Republicans historically have not been very successful in articulating a vision, an alternative vision for healthcare, but I think it’s, it’s possible that they’ll try to do that.

23:30
And I think you could divide that into both small war initiatives, like for example, high risk pools, more FQHCs, other initiatives that Republicans have historically supported. But I also think that, I suppose it’s possible that there could be a much larger vision that Republicans to come up with.

23:52
For example, taking the exchange subsidies in the enhanced F map for Medicaid, and turning those funds over to States to allow States to figure out their own solutions for uninsured individuals.

24:06
There were significant initiatives in the Trump administration with regard to transparency, and I think that might be a part of a Republican, larger package for healthcare reform.

24:17
What I called earlier, an alternative vision, or healthcare in the United States. So I suppose, but best possible, as well.

24:27
I just would note that Republicans historically, if not been successful in coming up with an alternative vision, we saw that right after President Trump took office when the repeal and replace the ACA was the rallying cry.

24:42
The Republicans weren’t really able to come up with a significant alternative vision. Um, we’ll see what happens over the next couple of years.

24:50
As as the midterm elections approach, as I said earlier, I really don’t think it’s likely that the Republicans in Congress are going to be able to successively make also revisions to the ACA, given the fact that they don’t have a majority in the house. And Senate, and that there’s an uncooperative administration.

25:11
The last point I’ll make is just what I think the administration is likely to do, that. Clearly you saw from President Biden’s Tweet yesterday that they certainly feel emboldened by yesterday’s decision, and the fact that it was a 7-2 decision, so, as Katie said, it was it was a significant resolving decision.

25:29
And you saw that President Biden’s Tweet yesterday afternoon after the decision came down.

25:35
I think that what the administration is likely to do is just continue what they’ve been doing, which is supporting the expanded subsidies that were enacted earlier this year, and the rescue, the American rescue Plan.

25:49
As President proposed in his budget, making those enhanced subsidies permanent.

25:55
Other, proposing other legislative initiatives to, to expand access to coverage through the exchanges, and also just administrative things that the agency that HHS can do to make access to a change, to change plans easier than, than it had been in the, in the Trump administration.

26:15
We saw that in the very early days, of the administration, when they, when they opened, they had an open enrollment period for exchange plants.

26:25
And I think we’ll continue to see that by the administration doing, doing things like that.

26:30
So again, just to sum up, on the Republican side, in the short term, I really cannot see anything significant happening that which that would seriously challenge any significant portion of the ACA.

26:46
On the democratic side, I think that you’ll see the administration continuing to ease implementation and access to coverage via exchange plans and but but nothing.

26:59
at the end of the day, nothing significant accompanying weight.

27:02
Lowering age of eligibility for Medicare, like like public option, I just don’t see those.

27:09
Those types of initiatives happening, and I guess I’ll just wrap up by saying we will see over the next year and a half as we approach the midterms, whether or not Republicans in Congress come up with an alternative vision for healthcare, that may happen. We’ll, just, we’re just going to have to wait and see over the next 18 months. So, Sarah, with that, I’ll turn it back over to you.

27:29
Great. Thank you so much time. That was a really great overview, So now I’ll invite Katie and Elizabeth back for some Q and A This was a terrific overview, all right. We’re all here, So, let me start. I want to kind of grouped by questions with first, You know, talking a little bit more about the legal aspects here. And then like the policy, and then, that’s the bigger picture questions here for you guys. So, just, you know, 1, 1 question just on on this case itself? we have already a question from the audience? And folks please to send in your questions? this is about the penalty itself and the unenforceable, penalty and implications.

28:08
And so, the person asks, know with a penalty, less or unenforceable mandate, is there any harm that would, is there any harm that would convert standing? Does that mean it would be a good strategy to keep the penalty at zero?

28:19
I remember, Katie, you know, earlier on, we talked about, you know, should Congress, like, raise the penalty to a dollar to sort of render the case moot? And, you know, and then a little bit more of a political question, but still kind of strategically dead Republicans shoot themselves in the foot by zeroing out or pushing to zero out. The penalty. In this case, Maybe, Katie. I’ll let you take that.

28:45
No.

28:46
So now basically are we at a point where the individual mandate and the enforceability is basically dad for the laptop.

28:55
That is my expectation fully, I think, you know, the mandate was the never loved provision, much hated, never loved version of the Affordable Care Act.

29:05
And so, you know, even, and maybe Tompkins speak to this more even after it was zeroed out in the tax cuts and jobs that you had President Trump, you know, saying they eliminated it, they got rid of it, all these things, you know. And it’s never been, I think there’s never been momentum except perhaps in a crisis that could have been set off by the court that didn’t come to pass any momentum, I think, to increase the penalty. And I actually have been worried now if you were to increase the penalty.

29:31
And even myself, I’ve been a little bit flippant in the past a dollar $5. I think if you were going to actually do that, you’d have to make it a real penalty. I don’t have a magic number, but you’d have to increase it much more.

29:43
If you think about the court now and how much it’s changed since 20 12, when that NFIB decision with the chief justice, you know, construing it as a tax, I don’t know if you were to look at this court now, if there would be the same level of support, even for his savings construction as a tax.

29:59
So the point there, I think things it is probably better to leave the mandate. A, there’s no sort of political support for increasing it. It’s clearly not harming anyone. If you look at the markets, which Elizabeth can talk about, everything is more than stable, you’re seeing increased enrollment. No, it doesn’t seem to be needed for any reason.

30:18
And, in fact, if you did put the penalty back in, there’s a chance that maybe one of these challenges really could come back, and you would have a different result from the Supreme Court that you saw on NFIB. So a long way of saying, I think we’re probably on solid ground, and I am not sure I’m not sure anyone is looking at the penalty right now. But I think it’s probably staying here.

30:40
Thank you. And I thought it was interesting, because I want to stick on this point because the whole point of the mandate and originally right was like, isn’t as an insurance risk mechanism, Right?

30:48
It was to prevent kind of moral hazard, right, of people buying insurance when when they got sick and to as a counter-balance to allowing coverage for preexisting conditions. That has seems like it has turned out not to be really the case.

31:06
But it was making me think yesterday about the Part D Enrollment Penalties and Medicare Part D where somebody enrolls late in the Medicare Part D Prescription Drug Program. There’s quite significant penalties if they didn’t have comparable coverage, and I’m just, so, what that made me, you know, whether you guys want to comment on Part D or not, my, what I was curious about, is, like, in general, the need to pool risk and insurance, and, you know, kind of manage that, like, doesn’t go away. So, do you have thoughts on, you know, how, like future health policymakers deal with that challenge? And maybe I’ll save Elizabeth or Thomas wants to jump in on that one.

31:47
Yeah, I mean, I’m happy to start. I think why?

31:50
No, I don’t wanna say the mandate has gotten a bad rap, right?

31:54
Obviously there is the, the, there is fraught with political challenge, but from a policy perspective, I think the effectiveness of the mandate was somewhat hamstrung by the sort of design of the mandate, right?

32:08
And if you make like a pure financial tradeoff, the mandate versus purchasing insurance and we did these analyzes sort of in the early days of the ACA, it just wasn’t there.

32:20
Right, and so people were sort of financially better off in some cases. Not necessarily if they had a major health event, but just from a month to month basis paying the penalty, and so the mandate wasn’t really enough to drive behavior. And what we’ve seen is that what has really been effective at driving behavior right is the level of premiums subsidization.

32:44
And, you, know, again, started very, early on. You can see that people, sort of, on the lower end of the income scale, you were getting those more robust. Subsidies were absolutely coming to the market and as sort of the subsidies sort of way. And so did participation and where people were making this, this mandate tradeoff Now, I think that at the same time, you know, there definitely was instability is sort of in this market, in the early days, and you saw some plan say, hey, like, this is not for me, right?

33:14
Both because certainly, the value was not there that some people had anticipated, and with that lack of value volume, we’re certainly some riskiest issues.

33:25
Now, I think what you’re seeing now is that, you know, things have settled out a level, and you know, the size of the market is the size of the market, but at the same time, there’s a much better understanding of who’s going to come and when and why. And now that you industry has a better sense of what that looks like. I think you’re gonna see even more plan and say, hey, you know, let me get my toe back into the water.

33:51
I’ll just add to that.

33:53
Hmm.

33:54
That it’s important to, first of all, agree with Elizabeth, but the penalty was not very anyway and so that the mandate wasn’t really much of a mandate in the first place.

34:07
I also think it’s worth pointing out where the idea of the mandate came from, which was the Massachusetts health care law when Governor Romney and got the Massachusetts legislature to enact health care plan.

34:20
Be in a mandate was a significant feature of that.

34:23
And Sarah also point out that the, the concept of penalty for not having coverage, You’re right, that it appears in poverty, but there’s actually also, or P weighted penalty, and that goes back to the, I think, to the 19 sixties to the enactment of Medicare. And so, the concept of a penalty for not having coverage and enrolling late, It’s been a feature of the American healthcare system for 50 years.

34:49
Yeah.

34:50
And Tom, maybe I’m, if you could enlighten us. But has have any of those ever been challenged in the past, like, those late enrollment penalty and Medicare at least?

35:00
Not, to my knowledge. No, I mean, I know, I remember during the implementation of Part D.

35:06
In 2005, and 2006, there was, uh, there was a fair amount of political controversy around the late enrollment penalty. But I don’t, I’m not aware, and there were also traditional challenges to the party, but not to the way to go.

35:22
All right, thanks. All right.

35:25
Well, let’s let’s keep moving forward because there’s a couple of questions already about some of the additional cases that might that might sort of … or or at least be be brought that are isa related.

35:39
So, one being on the Kelly VB staircase. You know, and Thomas, if you could maybe start here.

35:49
This, this case suggests that the coverage of preventive services in the ACA should be struck down due to non delegation and the appointments clause on decisions regarding preventive services. And share a little bit more about what that cases about and that what you think the outlook is.

36:07
I think I’m familiar with that case because I’ve been looking at the data in the context of the vaccines which obviously are the big issue now because of those the FDA EUA score for … vaccines.

36:24
And I do, if I’m understanding the non delegation issue, correctly, it’s, it’s the role that it plays in recommending vaccines.

36:31
And I think that it is not A It’s not a laughable challenge.

36:40
At the end of the day, I would be very, very surprised if the if the courts were to invalidate the preventive services, the zero.

36:51
Deductible and co-pay for preventive services. I’d be surprised if backup struck down, but I did so.

36:58
It’s a, it is it is A I think it’s a fair challenge, in the sense that it’s, I don’t think it’s going to get laptop for essentially is what I’m saying.

37:11
And, Sarah, I can weigh in on that, too. So, there have been you know, if you think about all the litigation to the birth control mandate, the contraceptive mandate, it’s all the same statute so that we’ve seen but this case, this Kelly Case. first, it’s pending before Judge Read O’Connor, who’s the same judge who was no overturned fully yesterday by the Supreme Court and has, you know, he has ruled on.

37:35
So, so many of the ACA cases I often devote an entire blogs to cases pending before generated O’Connor so, you know, it’s a case before him and I am pointing that out because I do think he’s, I think he’s going to strike down the preventive Services mandate and then the question will be what will the Fifth Circuit do because that’s where that would appeal to. And if the FITT’s are similar to what we just saw in California versus Texas, what will the Fifth Circuit do, and then will the Supreme Court have to step in?

38:02
I do think, Tom, I agree with Tom. This is a closer case And it’s a closer case. In part because of the Supreme Court’s decision on the contraceptive mandate, last term, in a case called Little Sisters of the Poor versus Pennsylvania, where Justice Thomas wrote that decision that was over a challenge to Trump Era Rules They upheld the Trump era roles, but Justice Thomas suggested this idea that the way the Preventive services mandate is written.

38:29
it sort of defers to recommendations made by public health professionals. So, it does, you know defers to the recommendations of the US Preventive Services Task Force that defers to HRSA.

38:39
These the idea there that Congress doesn’t want to go in and rewrite preventive services guidelines every time there’s a change in evidence. So, they defer to the experts. This has huge implications certainly for this very important provision but across the entire healthcare spectrum. So, the idea of non delegation is that Congress should be, it should not be deferring to those other entities. It should be writing these laws and provisions itself.

39:02
If you think about how much Congress does this in the healthcare context, didn’t even just think about the No Surprises Act. The surprise medical bill legislation that passed in December, and how much is deferred to the federal government or, you know, even preventive services to some outside entities.

39:18
It has huge implications that can really rock the health care system.

39:22
And so even non delegation doctrine that was cited in striking down Oklahoma, Medicaid managed care, we’re seeing it across the board.

39:29
And last thing I’ll say on this, clearly, I can I get all amped up about non delegation doctrine. But I do think folks on the Hill in particular should be thinking about this. And there are multiple challenges on this front. It’s not just this Kelly case.

39:42
There’s another separate case in Texas, before a district court there, and a lot of it’s being driven by the prep, certainly the birth control mandate part of preventive services. But there was a recommendation by the Preventive Services Task force to cover a pre-exposure prophylaxis, which is an HIV prevention medication.

39:59
And you have folks making no sort of religious objection claims, to cover the coverage of prep and contraceptives. And even HIV testing and STD testing. And that’s why they’re challenging the preventive services mandate as unconstitutional under this doctrine. So there’s a lot to unpack there.

40:16
I think it’s really, really important but if non delegation doctrine really does take off in the courts, I think the healthcare world isn’t for a world of hurt. To be quite honest. Millimeter. Hm, That’s interesting.

40:27
But, yeah, Yeah. Elizabeth, go ahead. I want to hear your thoughts on that.

40:31
No, I was just gonna say, I mean, if Congress can’t punch the hard decisions to somebody else. Like when are they ever going to be able to agree on anything. I mean, if you take that off the table, I would just also say, you know, the, the preventive services case in particular, right, if you think about it, sort of broadly, You know, this is a Case that really potentially, you know, expand this to be sort of the traditional employer sponsored insurance market, which is sort of an interesting and new dynamic and raises all kinds of questions.

41:08
I mean, there’s, there’s all kinds of investment that’s gone on in Prevention, whether that be and sort of, innovation Related to prevention, as you talked about prep. Screening and the Way, Right? But then, there’s also this question, or if that went away, you know, sort of, how does the market react? Right? Like, does an employer suddenly want to say, Oh, wait, you know, I’m not covering your call and ask you with no cost sharing or your vaccines. So, there’s there is just some real real complexity here. And when you talk about provisions of the ACA that had sort of the widest reach, this is really one of them.

41:48
So I expect that, there’s going to be a broader group of stakeholders following this case then maybe even, know, some of these prior cases where, Yeah, there was like a lot of noise about the Boise and going where I think many people felt like, that was the most likely outcome. But on this one, you know, there are just really potential wide ranging implications that brings sort of new groups of stakeholders into the debate.

42:15
That’s helpful, And, I mean, just to be clear, it means that the alternative as if Congress can’t, like you said or delegate to, I’m a different body of, you know, appropriate experts, if you will, I mean, what happens, I mean, they, they have to then get even more in the weeds. Or Tom, you know, you, your general counsel at HHS. I mean, how does that even then work in like a rulemaking process? Or what does that imply for, than a future role for like a CMS or HHS?

42:47
It really would, I don’t want to maybe paralyzes too much about too strong a word, but it really slow down the ability of the agency to undertake its most basic, basic responsibilities. I’ll just give an example.

43:04
The Supreme Court’s aligned a decision from two years ago, which was a decision that really forced the agency to go through notice and comment rulemaking for a lot of decisions that it did not previously have to go through notice and comment rulemaking for.

43:21
And that is really, this isn’t just in the Medicare program, but it has really made it difficult for CMS to undertake its most basic responsibilities and so, Oh.

43:33
literal expansion of the non delegation doctrine to make these most basic decisions, decisions that actually have to be made by Congress would really just slow everything down, both what the agency does and how the agency implements implements policies.

43:54
Great. Thank you. I just want to ask one more about the risks corridor in terms of sort of additional cases that might come up or actually rather I am.

44:02
Sorry, I meant the Katie, you had brought up the cost sharing reduction payments lawsuit. I just want to just throw in a little bit because it seems like that has a little bit of a different flavor to it in terms of like who the plaintiffs are, what the concerns are Can you maybe elaborate a little bit on that and sort of share?

44:25
How do you see that playing out?

44:27
Sure. It’s, it is related to a supreme Court decision, onerous corridors, which is why that’s on your brain, Sarah. That was decided last term and so the idea here.

44:37
I mean some of this relates to, you know, sort of so-called ACA sabotage, both the risk corridors cases in the CSR cases, no cost sharing reductions or for lower income people. They get their supposed to be paid directly from the federal government to the insurance companies. And then insurance companies offer sort of plans with lower out of pocket costs for those who qualify.

44:57
President Trump following there have been lawsuits about this, going back millennia, including a lawsuit initially filed by then speaker John Boehner. So I will spare you that, But President Trump following the failed kind of ACA repeal efforts in 20 17, directed HHS to shut off those payments to insurance companies. So insurance companies are still required to offer those plans with lower out of pocket costs, but they weren’t getting any money. In response, a lot of them did what we call silver loading. They kind of looked at the premium tax credits to other ACA subsidy and ramp those up to cover whatever they were going to lose on the cost sharing reductions. And so that’s what makes it a little bit different from the risk corridors case. In that case, the Supreme Court, that was an 8 to 1 decision, if I’m remembering correctly, said. Yeah, insurance companies are owed this money even though there’s no, there was no appropriation. They’re still paid, and they were awarded, a little bit, over $12 billion.

45:50
Insurance companies have cited that decision to say, we’re also these unpaid cost sharing reductions. The statutes do look very similar. And so they’ve gone to Sue the question here.

46:01
And what the appellate court said was, yes, you are owed those unpaid dollars, but we recognize that you also got some offset when you increased premiums, and got higher premium tax credits. So we’ll make you whole, but we’re not going to give you sort of a windfall or a double recovery, you don’t get to raise premiums, capture more subsidies here, and then go to court and Sue for everything you’re owed. And so the the insurance companies are the ones who have appealed, they have to the Supreme Court. And, you know, Paul Clement, who was a Supreme Court advocate, who actually won the risk quarters case, is, you know, on all those briefs, that really framing it as kind of a statutory interpretation question. We’ll see, you know, it takes the votes of four Justices on the Supreme Court to hear a case. And like I said, they were supposed to have considered at yesterday at their conference.

46:47
Maybe we’ll hear on Monday and maybe we’ll hear you know, sooner or later, they’re going to take it. And if they take it, it would be for the next term. So a long way of saying certainly sort of a wonky dollars and cents issue. That’s very important to insurance companies.

47:00
But I know Congress is also looking at cost sharing reductions, potentially as a pay for other things that I could let Tom, Elizabeth speak to you. But I think folks do care about what happens in this case because it will affect maybe some, you know, proposed legislation.

47:14
Yeah, thanks analysts and Elizabeth. But you know, we had an audience question around the risk corridors particularly, but I think it’s a little broader than that which is just Is there concern in Congress? I think we can probably answer that question, but, you know, on both sides of the aisle, perhaps about the profitability of Insurers: on the exchanges: Or, you know, narrow networks like what, like how does that all kind of tie in?

47:37
Yeah, I mean, it’s a good question.

47:39
I would say that, yeah, what we hear sort of from consumers historically, was really that they want a lower monthly premium, right?

47:51
That the biggest decision making factor, sometimes, probably, non consumers, best interests, in terms of overall costs was lower premiums, right?

48:00
And so, things like, you know, narrower networks or higher deductibles are really about bringing a product to market that is, in many ways, giving the consumer what they’re asking for, which is lower premiums now? I think, actually, in advance of the 2020 election, you saw a lot less focus on concern over monthly costs and much more focus on sort of out of pocket costs.

48:30
That certainly led into the discussion about surprise billing, but also lead to this question of cost sharing and the doctor symbols, and the like. And I do think that’s a place where Congress has eroded and it’s certainly something that comes up a lot in the context of drug prices, right?

48:48
Is is sort of what is the consumer paying out of pocket.

48:53
Now on the profitability side, I would also say you know, insurers have a pretty good sort of answer to that question which is, you know, we have MLR, right? And there are a lot of other sort of industries across healthcare that don’t. And so I think you will hear and insurance companies like what we have an alarm or complying if we’re not complying refounding. And certainly, you know during the pandemic there has been some attention on that. And they think you’re the insurance industry is also recognize that. We’re in a unique situation and we’re going to do what we need to do so.

49:29
Yeah.

49:29
Thanks, and of course, for those, newer to the issues, MLR is, of course the medical loss Ratio that requires insurance companies pay rebates back to consumers or to their know and employer health plan. If they, if they exceed Elizabeth, you’re gonna say this better than I have links to many scholars around in my head. But 85% of their revenue, Anton actual medical care or 80% depending. I mean, it’s it’s backstops right of the ACA, is that insurance companies have to spend a certain amount of what they tune premiums out, medical care. And it’s something that we see across across Margaret’s including Medicare.

50:12
Great. Alright, so we have about 10 minutes left, and we already have some really fantastic questions. We’ve been getting some fantastic questions from the audience, So I want to turn a little bit more now to what’s next, in terms of, just, you know, coverage in general. I want to ask first, Tom, about, you know, as you look to perhaps a role for the States.

50:31
You know, it was interesting, Katie, when you were talking initially about the, the court Not finding that the states would be harmed, but that kind of their argument was like, well, we’re gonna be harmed because people are going to take up coverage in some form or fashion. But, Tom, you know, you also then mentioned, like, maybe there’s, maybe there’s some solution on the horizon where, you know, more, more control gets sort of put to the states. You know, and certainly, that’s been a hallmark of American health policy writers.

51:03
Is the States, you know, really making, making a lot of decisions.

51:09
I mean, do you see, what role do you see for the states? I mean, absent some sort of big grand, you know, new vision for, for coverage. Like, what role do you see for the states, kind of, in the, in the medium, short to medium term.

51:24
I think, in the short to medium term, anything that happens at the state level, it’s probably going to happen through Medicaid to be enhanced use of Medicaid, 11, 15 waivers, So, such as what, on what Texas was trying to do.

51:37
Although, the, the, the Texas Waiver was, the renewal of the Texas Waiver was blocked by that, but by digitization.

51:45
But I do think, in general, you’ll see Republican led states, especially using Medicaid waivers, perhaps a little bit more, also, maybe reforms to the small group, an individual market at the state level.

51:59
Um, but when I’m, when I mentioned states, I was also thinking of a much bigger concept, where, and this is something that goes back, at least to the Bush administration, that we were kicking around at the Bush administration, Which is taking the subsidies that are in the American health care system.

52:17
Right now, whether it’s Medicaid dish. Now the Instep men, or ACA expansion, the exchange of subsidies.

52:26
Taking those extra payments in the health care system.

52:29
And turning them over to state. And just, essentially, making a grant to the states and saying to the states, you figure out how to deal with the uninsured population within your borders.

52:41
And because we, the federal government think that you are in a better position to make those decisions, doing that would be extremely controversial.

52:50
I am not see a pathway for that getting enacted A suit, so that’s certainly a long term solution.

52:58
But that’s, I think that if you, if you were to think about it, Republican vision for health care reform, it would look more like bad, again, to sum up taking the existing subsidies in the American system. Turning them over the state can grant.

53:15
Yeah, and one quick follow up because some someone dead right in from the audience and I think they are a state policymaker. Asking many of us at the state level are interested in pursuing state level ACA coverage expansions.

53:27
You know, they cite section 13, 32, ah, Yeah, and so do you think you know that do you think A like what future do you see for 13, 32?

53:37
Do you think the court decision has any impact on it and what do you think You know states are going to do with that provision? moving forward?

53:46
I don’t think big yesterday’s decision necessarily affect section 332 or for that matter 115 waivers but I do think that that you are going to see renewed by states is taking advantage of the flexibilities that they that they got under Section 332 of the ACA or 11 15 waivers.

54:05
Yeah, thank you. Alright, I want to ask Elizabeth and Katie to quickly weigh in on just the State insurance markets.

54:11
Since, since you know, Elizabeth, you mentioned foreseeing, more competition, more plans, I mean, certainly, you know choices. Then, again, one of the stated goals amongst some party, What do you think states and state regulators are going to do with that to either enhance choice and competition on the, on the exchanges or more broadly in their workplaces? And then, Katie, I had asked for your thoughts on the same question, before we wrap with a couple closing questions.

54:43
Yeah, I mean, I think it will be interesting to see sort of as we head into 20

22, sort of where competition picks up sort of where different insurers place their ultimate bats, and sort of how that impacts the market in any particular state, right?

55:01
So, I think what we’ve learned with this law in these markets in particular, is that the variation sort of C to C, county to county can be significant. You know, I think, to the to the question that you had earlier, I think there is some expectation, I’ll be interested in thoughts here, that we may get some additional guidance from the Administration as it relates to 13 32 waivers.
55:25
And to the degree, you know, to Tom’s point, that sort of Congress is not an effective vehicle for you sort of improvements or enhancements to the Affordable Care Act that perhaps this administration that sort of lean into that 13, 32 authority to try to give you some additional flexibility. To two states who, who want to take this on. And so I’m interested, Katie, if you’re thinking.

55:55
I think that’s where, And I think they even, I guess I’m a little bit hesitant, I think, thinking through who is ad, the White House, and at HHS, There are a lot of folks who are around during the Obama administration. And even the 13, 32 guidance from the Obama administration was not known for its flexibility. I think there were blue states and red states who both sort of chafed at that guidance. So I’ll be interested to see if they, if they are proactive about, you know, what their interpretation of that is going to be or not. I think they do have to do some cleanup of some of the things the Trump Administration did.

56:27
But the question is what they say proactively, or if they go further, even if they don’t say something, I know.

56:34
I have been surprised by how much state activity there has been. So, even in the past two weeks seeing, you know, State, Nevada, Colorado, Washington, you know, states are looking at public options. They’re sort of moving ahead, and at least the Colorado and Nevada proposals include a 13, 32 waiver.

56:49
So, I think the button administration is going to be pushed one way or another, in terms of what it’s going to do for some of these sort of broader coverage options by at least some of the states, So that’s something I want to keep an eye out for to.

57:00
one question I was thinking about, Tom, as you were talking, is S know, there used to be the Alexander Murry proposal in Congress after the failed ACA repeal efforts, and in 20 17. And that included, you know, some negotiated changes to 13, 32.

57:13
You know, I know Senator Alexander is no longer there.

57:15
But I do wonder if we’ll see some of that may be creative, bipartisan approach to if we can move on and do some bipartisan things on ASAP eyes on tonight, that I was like, oh, that was before, maybe there’s some world, but I don’t know if you have to take Katie, you lead, right? And I’m sorry, sorry, time to jump in, but this is a great final wrap up question, because we’ve had 2 or 3 from the audience here about just at the 30,000 foot level. What do all these lawsuits mean? For legislation that passed on purely, you know, partisan lines, you know, does this really fundamentally highlight the importance of bipartisan bills going forward of bipartisanship? You know, I’d love to have a whole nother webinar on what those bipartisan purchase potentially could look like.

57:57
Yeah, but, but, you know, I mean, we seem like we’re maybe in the trickle down of not not too many more, like fundamentally challenging lawsuits on this, but but, at some point, right. Healthcare still wasn’t as affordable or equitable as it as it could be. So. So, maybe, Katie, I know you comment on Alexander Murray. We just have a couple minutes left. So I’ll kick it to Tom to you know, see. if, if, if you have thoughts on that question, and then we’ll end with Elizabeth.

58:25
I mean, my thoughts are, as much as I would love, for that, to be the case, for there to be, as Katie mentioned, bipartisan healthcare issue. When I worked on the Hill back in the 19 eighties, there were plenty of bipartisan healthcare initiatives back in the eighties. I’m skeptical that it, that it can happen, at least in a Congress that’s this closely divided, which seems counter-intuitive. You would think that with the Congress is closely divided, There would be a greater incentive bipartisan for bipartisanship. And, I, just, unfortunately, I’m just not seeing it happen.

58:55
Elizabeth, before you answer that question, I want you to kind of twist that a little bit and talk about what would, what would a more bipartisan approach mean for the industry stakeholders that you work with and then for consumers.

59:10
Yeah, sure. I mean, bipartisan to create some stability, right. Which, which stakeholders? all kinds of great. I think from a business perspective, being able to plan and sort of anticipate a policy and regulatory environment is important.

59:27
If you are a company that has constantly fury OK, I’ve invested in these programs under these rules Or is this constant threat that tomorrow, Those, those rules could mark wildly different.

59:45
It doesn’t give you a ton of incentive to make, you know, to go all in, because we’ll have tomorrow. It’s going to be different than I know all these resources to pursue something under one set of standards.

59:59
So, you know, of course, I think it would be beneficial for consumers to know what’s coming, but it would also be beneficial for companies that are thinking about growing and being strategic and serving the patients that all of us wants them to serve, if there were some more predictability.

1:00:22
Some of the dysfunction create some of that stability by default, right? Yeah. You have more and more companies being like, wow, you know, I don’t really actually think they’re gonna have to do anything on Capitol Hill. So, I’m just going to ignore it off the roof. But gridlock and strategy are two different things. So, Right. So, Yeah. Well, thank you. Thank you, everybody. Thank you for joining us today. Thanks to our audience. Again, check out allhealthpolicy.org for a recording of this webinar later in the day. Elizabeth Carpenter, Katie Keith, Thomas Barker, thank you for joining us, and let us hey, let’s all get together soon and talk about something besides standing. How about that?

1:01:04
Alright. Thank you, guys. Have a wonderful, wonderful weekend. Bye.