Overview Affordable Care Act Repeal Efforts An overview

Overview: Affordable Care Act Repeal Efforts An overview of legislative and judicial attempts to strike down “Obamacare” and the impact of a potential ACA repeal

Roadmap • Overview of ACA repeal efforts • Legal action against the ACA • Impact of repeal 2

The ACA has faced consistent legal challenges since its passage in 2010 Timeline: legislative changes to the ACA National Federation of Independent Business v. Sebelius: Burwell v. Hobby Lobby Stores, Inc. : The Supreme Court rules 5 -4 that the ACA is constitutional because Congress has the power to levy taxes. 2009 H. R. 3590: Patient Protection and Affordable Care Act, was introduced on Sept. 17, 2009 and signed into law on March 23, 2010 The Supreme Court strikes down the ACA’s contraceptive mandate, ruling that closelyheld for-profit corporations may be exempt from regulations that owners object to on religious grounds. 2011 2012 2013 The 112 th Congress (2011 -2013; Democratic-controlled Congress) extends TRICARE coverage to adult children up to age 26, modified the Adjusted Gross Income, which determines eligibility for Medicaid, and repeals the Community Living Assistance Services and Supports Act. Zubik v. Burwell: Texas v. United States: California v. Texas The Supreme Court rules per curiam that in the case of seven lawsuits filed by religious organizations against the Dept. of Health and Human Services, contraception coverage may be provided to employees without action by religious employers. A Texas judge rules the ACA unconstitutional; 18 Republican AG’s filed lawsuits against the ACA; 17 Democratled states intervened to defend it. In Feb. 2020, SCOTUS announced it would hear the case against the ACA’s individual mandate as California v. Texas. The Court will hear the case this fall and a decision will be made by June 2021. 2014 2015 The 113 th Congress (20132015; divided Congress) eliminates deductible caps for small group health plans and appropriates $560 M in grants and waiver programs to bolster the ACA. 2016 2017 2018 2019 2020 In 2017 -2018, the Trump administration enacted a number of ACA reforms, including: • Cutting the open enrollment period in half • Bringing down the ACA website for 12 hours nearly every Sunday for maintenance • Allowing states to impose work requirements for Medicaid • Removing the individual mandate penalty Sources: National Journal Research March 2, 2020 3

States’ Positions in Texas v. US ■ Challenging ACA (18 states) ■ Withdrew from ACA challenge (2 states) ■ Defending ACA (17 states) ■ Joined ACA defense on appeal (4 states) ■ Filed amicus brief (2 states) ■ Not involved (8 states) WA MT VT ND MN OR ID California is leading the defense of the ACA NH SD WI WY NV PA IA UT IL CO AZ KS OK NM TX OH IN WV MO KY TN SC AL GA MA RI VA NC AR MS AK NY MI NE CA ME CT NJ DE MD LA DC FL HI Sources: Kaiser Family Foundation Slide last updated on: September 10, 2019 4

Individual mandate sparked Texas v. United States’ legal challenge of the ACA Federal government’s position Plaintiffs’ position Defendants’ position • The plaintiffs argue that the “zeroing out” of the individual mandate penalty at the start of 2019 makes the mandate unconstitutional since it is no longer a tax law • Defendants argue that the individual mandate is severable from the ACA, meaning that the act can stand even if the individual mandate was zeroed out • The plaintiffs argue that the mandate is so central to the ACA that the ACA cannot exist without it • That Congress failed to repeal the ACA in its entirety is an indication that lawmakers ultimately wanted to keep the ACA • In March, DOJ changed its position to agree with the district court’s decision that the ACA should be largely invalidated • It is uncommon for the federal government to take a position that does not uphold federal law Timeline of key events in Texas v. US Dec. 14, 2018 US District Court for the Northern District of Texas rules the individual mandate unconstitutional Mar. 2019 Jul. 2019 US changes position and argues that the entire ACA is invalid A three-judge panel of the Fifth Circuit Court of Appeals heard oral arguments in Texas Dec. 18, 2019 In a 2 -1 ruling, the Fifth Circuit Court of Appeals ruled the individual mandate unconstitutional Mar. 2, 2020 SCOTUS agrees to hear the case as California v. Texas Sources: Kaiser Family Foundation, Health Affairs, Vox, Washington Post, Axios. Molly Newell | Slide last updated on: May 27, 2020 5

The 5 th Circuit Court of Appeals filed a decision on December 18 th ruling the individual mandate unconstitutional Significant legal considerations: Is the mandate constitutional without the penalty? Is the mandate severable from the rest of the ACA? The 5 th Circuit Court of Appeals found the individual mandate unconstitutional without the tax penalty stating “it can no longer be read as a tax, and there is no constitutional provision that justifies this exercise of congressional power. ” Judge Jennifer Walker Elrod and Judge Kurt Engelhardt ruled in support of the decision. Judge Carolyn Dineen King dissented. The appeals court did not say how much of the ACA can remain with this ruling. This question will fall to a lower court with Judge Reed O’Connor previously ruled that the entire law must be struck down, but the 5 th Circuit instructed him to re-evaluate why the ACA is not valid and that his original ruling “does not explain [his decision] with precision. ” 5 th Circuit jurisdiction area Panel judges Assent : Judge Jennifer Walker Elrod Appointed by Pres. George W. Bush in 2007 MS TX LA Judge Kurt D. Engelhardt Appointed by President George W. Bush to federal district court in 2001 and to the 5 th Circuit by President Donald Trump in 2018 Dissent: Judge Carolyn Dineen King Appointed by Pres. Jimmy Carter in 1979 Sources: Health Affairs, Kaiser Family Foundation, New York Times, Axios. Slide last updated on: December 19, 2019 6

The Case Now Goes to the U. S. Supreme Court The Court will hear oral arguments beginning November 10, 2020, one week after the election. Democrats described the Fifth Circuit’s decision as “textbook judicial overreach, ” claiming that the courts accomplished the ACA dismantling that Republicans in Congress failed to achieve. Democrats argue that a penalty-free mandate does not exceed congressional authority. They contend that a penalty could eventually be put back into place and that the mandate “may be upheld as a suspended exercise of taxing power. Sources: Law 360. September 9, 2020 7

If the ACA is struck down in court, over 23 million Americans could lose their health insurance Percent increase in uninsured persons by state THE URBAN INSTITUTE, MARCH 2019 ■ 0 -25% ■ 25. 1 -50% ■ 50. 1%-75% ■ 100. 1%-125% ■ 125. 1%-150% ■ 75. 1%-100% • 9. 2 million Americans receive federal subsidies WA MT VT ND MN OR ID NH SD WI WY NV UT CA AZ CO MI PA IL KS OK NM MO TX HI OH IN WV KY VA NC TN AR SC MS AK NY IA NE ME AL GA MA RI CT NJ DE MD LA DC • 12 million adults who gained accessed to Medicaid through state expansion could lose coverage • 133 million Americans with pre-existing conditions, or about half of the population under 65, would lose protections • 2 million young adults would be forced off of their parents’ plans FL If the ACA is repealed, states that expanded Medicaid and/or had high Marketplace participation would feel the largest relative increases in uninsured population. Sources: The Urban Institute, Center for American Progress Slide last updated: September 10, 2020 8

The 36 states and the District of Columbia that expanded Medicaid under the ACA would be impacted by repeal States participating in Medicaid expansion to the new adult group AS OF September 9, 2020 ■ Expanded but not implemented ■ Not expanded Impact on government spending WA MT VT ND MN OR ID NH SD WI WY NV AZ PA IA UT CO IL KS OK NM TX HI OH IN MO WV KY VA NC TN AR SC MS AK NY MI NE CA ME AL GA MA RI CT NJ DE MD LA DC FL As of 2019, mortality rates in expansion states are 0. 2% lower than in non-expansion states. If every state had expanded, 15, 600 deaths could have been averted. • Federal spending on Marketplace subsidies and Medicaid/CHIP would drop 35%, or $134. 7 billion. • Federal health care spending would fall by more than 40% in 15 states, hitting expansion states particularly hard. • State spending on Medicaid/CHIP would drop 6%, or $9. 6 billion. Sources: Kaiser Family Foundation, Associated Press, Vox Molly Newell | Slide last updated on: August 5, 2020 9

Repealing the ACA would significantly impact the economy Employment • • • The combination of tax and spending cuts could reduce national job growth, resulting in over one million less jobs. Seventy-five percent of these job losses would be outside of the health care sector. The top five job-losing states would be Arizona, Colorado, Kentucky, Louisiana, Maryland, and Montana. Household spending • • Benefit cuts would disproportionately impact low income households, while tax cuts would benefit high income households. As low income households spend larger portions of their income on health care, they would have fewer available discretionary funds, lowering overall spending. State income burden • 42 states would suffer a net economic loss as a result of the repeal of the ACA. • Eight states and DC would not suffer a net loss, but they would still face overall job losses. Sources: Economic Policy Institute Slide last updated on: September 9, 2020 10

A variety of health programs would lose authorization with the repeal of the ACA Consumer protections for insurance customers Indian Health Service authorization Biosimilar drug approval Repeal would limit customers’ financial protections by increasing deductibles, charging seniors higher prices, and dropping expensive categories of benefits. Repeal would invalidate the legal basis for the health program that provides services for over 2 million Native Americans. Medicare experiments Medicare payment formulas Repeal would eliminate the office responsible for testing strategies for how to pay for health services. The formulas used to calculate providers’ payments would change, impacting organizations who have already built those calculations into business models. “Sunshine” law The provision requiring pharmaceutical companies to disclose gifts and payments to physicians would be eliminated. Medicare prescription drug discounts Repeal would increase drug costs for Medicare users by eliminating gaps in patients’ drug plans. Repeal would remove the FDA’s authority to consider biosimilar drugs, jeopardize the status of 21 approved biosimilars, and discourage investment. Restaurant menu labels Chain restaurants would no longer be required to publish caloric information for consumers. Benefits for breastfeeding mothers Insurance coverage for breast pumps and requirements that employers provide a room for mothers to pump would be invalidated. Sources: New York Times Molly Newell | Slide last updated: September 9, 2019 11

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