A three-judge panel at the 5th U.S. Circuit Court of Appeals kept suspense about the entire Affordable Care Act legislative package alive this week by ruling that the ACA’s individual coverage mandate provision is an unconstitutional requirement to buy a private product, but that it’s not clear whether killing the provision really kills all of the ACA.
The 5th Circuit panel ruled, in the Texas v. USA case, that a district court judge in Texas should take another look at whether killing the ACA individual mandate provision kills just that provision, just some of the ACA individual major medical insurance pricing and underwriting rules, or, really, all of the thousands of pages of the ACA.
Even some harsh critics of “Obamacare” say they simply want to repeal some of the ACA health insurance underwriting, pricing and benefits rules, not kill the many other, separate ACA provisions, such as the ACA provision that’s phasing out the hole between when ordinary Medicare Part D drug plan benefits end and catastrophic benefits start, or the ACA geriatric care provider training provisions.
Other ACA critics say they really do want to get all of the ACA thrown out, and that, because the ACA contains no “severability” provision, a court ruling declaring any of the ACA unconstitutional should kill all of the ACA.
Here are five possible effects of the new ruling, for agents:
1. The current system could be more likely to muddle along, roughly as is, until after the November 2020 presidential elections.
The Supreme Court could rule on a 5th Circuit ruling in June 2020. If the Supreme Court wait to see what the district court in Texas does, and proceedings proceed at an ordinary pace, the Supreme Court might not take up the Texas v. Azar case until June 2021.
2. The uncertainty might increase all kinds of vendors’ wariness of doing business with the federal government, or participating in new federal programs.
The administration of President Donald Trump wants health insurers to help consumers cope with high major medical insurance costs by offering more short-term health insurance policies and new types of association health plans and health reimbursement arrangements. The Texas v. Azar fight might raise company concerns about what the next government led by Democrats might do to the companies with major short-term health insurance policy, AHP or HRA programs.
3. The uncertainty could increase in genuinely bipartisan approaches to policymaking.
Even though creating bipartisan coalitions appears to be more difficult than it was, insurance ratings analysts at S&P Global Insurance Ratings are speculating that some policymakers may come to see bipartisanship as a defense against the possibility that the government will try to crush existing health finance programs, or other programs, whenever control of Congress or the White House passes from one party to another.
4. States could put more effort into establishing their own laws.
Many insurers have said they would like to see states apply more uniform insurance rules. But, today, some states are rushing to pass laws designed to minimize the effects of the ACA. Other states are trying to pass laws that will keep ACA health insurance rules in place in those states even if the ACA itself goes away.
5. People may be more interested in hearing what you have to say about health insurance.
Compensation problems have chased many financial professionals out of the ordinary major medical insurance market. People have gotten somewhat used to how the ACA system works, and somewhat used to the idea that it will creak along. The ACA open enrollment period for 2020 coverage glided along without getting much attention, good or bad.
But now, the idea that chaos is just one Supreme Court ruling away is back. If you can somehow explain what is (or isn’t) going on, your email open rates and social media interaction rates may rise.