A surprise decision late last week from a U.S. District Court has added more confusion to the future of the Affordable Care Act (ACA) — and the future of the U.S. health insurance system in general.
On Friday, the U.S. District Court for the Northern District of Texas ruled that the ACA is unconstitutional. At the heart of this case: the provision in the 2017 Tax Cuts and Jobs Act which reduced the penalty for non-compliance with the individual mandate — a mandate that required most individuals to get health insurance coverage or pay a penalty — to zero.
“The individual mandate was the hook that the Supreme Court had identified when it decided that the law was a constitutional exercise of Congress’ power of taxation,” explained Shawn McBurney, the Society of American Florists’ senior director of government relations. “The 20 states that brought the lawsuit argued that when the penalty was eliminated, the portion of the law that made it constitutional was eliminated and therefore the law is no longer constitutional.”
Although the Trump Administration’s Department of Justice did not join the plaintiffs’ argument that, in light of the unconstitutionality of the individual mandate, the entire law should be struck down, it did not intervene in the case to defend any part of the law. Rather, the law is being defended by a coalition of Democratic state attorneys general.
“The general expectation among experts was that Judge Reed O’Connor would find the individual mandate unconstitutional,” McBurney said. “But Judge O’Connor took things a step further, in ruling that the functional elimination of the individual mandate penalty caused the entire ACA to become unconstitutional.”
What does the decision mean for floral industry members, many of whom are struggling to afford health care options, particularly in a tight labor market with keen competition for good workers? For now, the future is unclear — and it rests in large part with the courts.
“The ruling did not include any type of injunction to immediately invalidate the ACA. If it did, it would have caused unprecedented chaos in the health insurance industry which represents a huge chunk of the American economy,” McBurney said. “The case will be appealed to the Fifth Circuit and, from there, is likely to end up before the Supreme Court.”
In the meantime, the ACA remains in effect. “There is no impact on current coverage, and there is no impact on 2019 coverage,” McBurney said. “The ruling had no impact on state enrollments through HealthCare.gov for coverage effective January 1, which ended December 15.”
In addition, employees with coverage in the District of Columbia or one of the 11 states that operate their own marketplaces — California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont, and Washington — should determine if they still have an opportunity to enroll. Several of those states have responded to the Texas ruling by extending the December 15 deadline to December 21, and several of those states already have January deadlines for February 1 coverage.
Health care reform has long been a central issue for SAF. The association’s members have shared their stories of rising costs with lawmakers each year during SAF’s annual Congressional Action Days, including in 2017, when industry members from across segments advocated for key fixes to the ACA.
SAF will continue to monitor these developments and update members on best practices.
Drew Gruenburg is the chief operating officer of the Society of American Florists.
