Tim Jost: The Proposed Health Reimbursement Arrangement Rule

The United States is unique among developed countries in the extent to which it ties health care financing to employment.  Fifty-six percent of Americans receive health coverage through their jobs. Some health policy experts have criticized this situation, asserting that health care could be financed much more efficiently if individuals purchased the health care coverage that best suited their needs rather than relying on their employers to purchase coverage for them.

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Tim Jost: Continuing Litigation Involving the Affordable Care Act

Within minutes of President Obama signing the Affordable Care Act into law in 2010, lawsuits were filed challenging its constitutionality.  Over the next six years, dozens of cases were filed challenging the ACA or Obama administration regulations implementing it.  Although most of these cases were dismissed, four made it to the Supreme Court, including one that dramatically changed the scope of the ACA’s coverage of the uninsured by making the Medicaid expansions optional with the states.  Many challenges were brought by Republican attorneys general, who championed the battle against the signature legislative triumph of a Democratic administration.

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The ACA’s vision of a reformed small-group market

Although the political controversy surrounding the Affordable Care Act has focused primarily on its extension of coverage through the individual market and Medicaid expansions, Congress also intended the ACA to reform extensively reform the small-group market. In the decade preceding the ACA, small-group health insurance premiums had more than doubled while the percentage of small firms offering coverage dropped from 66 to 59 percent. Administrative costs and employee cost sharing charges were high and benefits offered by some employers were skimpy. 

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Texas leads multi-state Affordable Care Act lawsuit

In February 2018, the attorney general of Texas, joined by attorneys general and governors from nineteen other Republican states, filed a lawsuit asking a Texas judge to invalidate the entire ACA.  

Their theory is that during a Supreme Court argument held in 2012, Congress lacked constitutional authority to enact the ACA’s individual responsibility requirement as a mandate, but upheld it as a tax. In 2017, Congress zeroed out the tax, thus, plaintiffs argue, the individual responsibility requirement now lacks any constitutional basis and is void. But, the argument continues, the individual responsibility requirement is key to all the rest of the ACA, so the entire ACA must be invalidated. In April, the plaintiff states (joined by two individual plaintiffs) asked the court to block the enforcement of the ACA and all associated regulations through a preliminary injunction. 

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The single risk pool at risk

The Affordable Care Act’s coverage expansions in the individual and small group markets were based on a key idea—as of 2014, all who had coverage in the individual market would be part of single, state- and insurer-wide, risk pools, with separate small group single risk pools.  Indeed, the risk adjustment program would spread risk among all insurers in the individual and small group markets creating, in a sense, a single statewide risk pool in each market. The individual responsibility requirement would drive individuals into the market, while premium tax credits for moderate income individuals would pull them in.  The healthy would help cover the costs of the sick, and all would find affordable premiums.

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