How the Supreme Court’s case on the ACA could hurt New York

The U.S. Supreme Court is set to hear arguments on Tuesday for yet another case challenging the constitutionality of the Affordable Care Act. The case brought forward by several Republican attorneys general and governors targets the provision related to the individual mandate, which required most people to enroll in health insurance or else pay a fee, with the goal of having the law overturned. 

If that were to happen, at least 1 million New Yorkers could lose their health insurance, and the state would have little recourse to fill in those gaps itself.

The court has historically largely upheld the ACA’s constitutionality despite multiple legal challenges. But the court’s new 6-3 conservative majority makes the likelihood of a full or partial repeal a greater possibility, especially given that newly appointed Justice Amy Coney Barrett has opposed the court’s previous rulings on the law.

Congress changed one portion of the law in its 2017 tax bill, essentially lowering the penalty for not enrolling in insurance to zero. This functionally killed the ACA’s individual mandate.

Earlier, the Supreme Court upheld the mandate’s constitutionality on the basis that the mandate was a fair use of Congress’s power to levy taxes. But now that the penalty is reduced to zero, the plaintiffs are arguing that it no longer functions as a tax and must be struck down along with the rest of the law.

“The remedy is not to throw out the entire Affordable Care Act,” said Elisabeth Benjamin, vice president of health initiatives at the Community Service Society, under the assumption that the argument against the mandate was held up. “The remedy is to do what most conservative legal scholars would do, which is to just sever the individual mandate from the rest of the act.”

If the Supreme Court only struck down the mandate, it would have little effect on the public given that it’s already a toothless provision. The court could also strike down provisions related to the individual mandate, such as protections for people with pre-existing conditions. The case could also be rendered null if Congress takes action in the next year, either restoring a minor financial penalty, killing the mandate themselves or passing a “severability” provision which protects the rest of the law should one part be struck down. 

And of course, the entire law could also be ruled invalid.

Under such a scenario, New York’s health care system would be drastically disrupted. New York was among states that expanded their Medicaid coverage under the ACA. Around 1.8 million New Yorkers have enrolled in Medicaid since the state’s expansion according to the Kaiser Family Foundation, of which about 300,000 were previously ineligible for the program. Approximately 900,000 residents also get coverage through the Essential Plan, an optional benefit provided by the ACA as an alternative for people who can’t get on Medicaid. And about 273,000 New Yorkers receive coverage via qualified health plans on the individual market, which receive subsidies to be more affordable. 

“That trickles down to hospital systems and primary care providers and all the other parts of our healthcare system,” said Peter Newell, director of the Health Insurance Project at the United Hospital Fund.

Kimberleigh Joy Smith, senior director for community health planning and policy at Callen-Lorde Community Health Center, said that a full repeal would add to already existing barriers to accessing care for the LGBT community the organization serves in New York. “The possibility that the Affordable Care Act could go away – certainly if it went away entirely – just is adding pressure to community health clinics like Callen-Lorde,” she said.

A potential repeal of the provision protecting people with pre-existing conditions wouldn’t affect New York as much as most other states because it had such protections in place even before the ACA’s passage. But there still would be consequences associated with that part of the law being struck down. Without subsides and the individual mandate pushing healthier people to enroll in health insurance, an anti-discrimination rule forces insurers to cover a predominantly sick and costly population, as happened in New York before.

“The insurance that’s being sold under this law gets to be more expensive, and it’s being sold to fewer and fewer people, until the point it’s really prohibitively expensive except for a handful of people who are very sick and happen to have enough money to pay the premiums,” said Bill Hammond, the senior fellow for health policy at the think tank the Empire Center for Public Policy.

The state’s ability to fill in the gaps of a potential repeal would be severely restricted, especially given New York’s persistent fiscal crisis caused by the COVID-19 pandemic. If the law were completely done away with, New York would be losing billions of dollars in federal funding which covered significant health spending. “The state’s gotten very accustomed to that higher level of support from the federal government, and if it went away it would create a huge headache for the state to deal with,” Hammond said, though he added it was likely New York would at least try to retain coverage for Medicaid recipients. 

Assembly Member Richard Gottfried, who chairs the Assembly’s health committee, said a repeal would add new urgency to creating a single-payer healthcare system in New York, which has faced significant challenges in being passed even before the pandemic. “I think it would make the case for the New York Health Act clearer than ever,” he said.