By Leslie Small
The Sept. 18 death of Justice Ruth Bader Ginsburg — which could tip the scales in favor of striking down the Affordable Care Act (ACA) — was hardly welcome news for health insurers during a year when a pandemic and a presidential election are already fueling high levels of uncertainty. However, industry analysts and legal experts say there are plenty of reasons not to hit the panic button just yet.
“This definitely increases the chance of the Supreme Court striking down the full ACA. But we’re going from a pretty low likelihood base,” says Chris Sloan at Avalere Health. “The odds are still really stacked against anything materially changing for the ACA.”
At issue is a case now known as California v. Texas, which Republican state officials filed in 2018 to challenge the constitutionality of the ACA. Because Congress changed the tax penalty for the law’s individual mandate to $0 via the 2017 Tax Cuts and Jobs Act, they argued, the mandate is unlawful, and if that part is unconstitutional, the whole law must go.
Until Ginsburg’s death from cancer complications, many legal observers expected that the ACA had a good shot at surviving this latest Supreme Court challenge. But if Senate Republicans are able to confirm a replacement for Ginsburg before Nov. 10 oral arguments, not one but two conservative justices would have to side with their liberal colleagues to produce a pro-ACA ruling, explains health care attorney Katie Keith.
Ultimately, “I’m still skeptical that the entire law would be invalidated; I think that would be a step too far and does go against some of the recent decisions we’ve seen on severability from this court,” Keith says. However, she adds that the loss of Ginsburg “makes it more likely that parts of the ACA will be struck down” — in particular, the so-called preexisting condition protections.
Wall Street analysts, meanwhile, appeared unconvinced that the law will be unraveled — but noted that Centene Corp. has the most exposure if that happens, given its strong concentration in Medicaid and the individual market. Credit Suisse’s A.J. Rice estimated that those two business lines make up roughly 26% of Centene’s earnings, but only 4% for Anthem, Inc., and less than 1% each for Cigna Corp., CVS Health Corp., Humana Inc. and UnitedHealth Group.