Everything is Bigger in Texas… Except the Affordable Care Act

By: Morgan Schroeder, Spring 2019 HeLP Legal Services Clinic Intern

On March 23, 2010, the Affordable Care Act (ACA) became law. The ACA (or, as it’s commonly referred to, Obamacare) expanded Medicaid in hopes of achieving “near-universal” health insurance coverage, and introduced several provisions that would help more Americans acquire insurance. The ACA had several provisions that were very popular with the public, including prohibiting insurance companies from discriminating against individuals based on preexisting conditions and health status, and some that were unpopular, including the individual mandate, which would require all individuals to have minimum essential coverage or else they would be required to pay a penalty.

Since President Trump took office, his administration has sought to repeal and replace many of the ACA’s provisions. The House Republicans proposed the American Health Care Act (AHCA), which would retain the protections for individuals with preexisting conditions, but would replace many of the ACA’s other statutory provisions. The House passed the AHCA, but it did not pass in the Senate. The Senate alternatively proposed the Better Care Reconciliation Act (BCRA), which would have allowed states to apply for waivers to opt out of many ACA provisions, including the provisions on preexisting conditions. However, the BCRA did not pass either. Although neither of these bills passed, several ACA provisions have still been weakened by the new administration. The Tax Cuts and Jobs Act (TCJA), which became law in December of 2017, repealed the tax penalty associated with the individual mandate and became effective at the beginning of 2019. The individual mandate itself remains in place, but there is no longer a tax penalty assessed against those who choose not to purchase an insurance plan. Overall, the ACA remained in effect, until…

On December 14, 2018, a federal district court judge in Texas issued a decision in the case Texas v. United States, declaring the individual mandate provision of the ACA unconstitutional. The judge also determined that because the mandate was “essential to” the ACA, it could not be severed from the rest of the law. This outcome would, in effect, strike down the entire ACA, but the case is currently in the appeals process, and the district court decision is stayed on appeal.

Why does this matter? Because Texas v. U.S. is a federal court case, the ultimate decision would potentially affect every state. Although Georgia did not expand Medicaid coverage through the ACA, the other provisions of the ACA are still in effect in every state, including tax credits, state-based insurance Marketplaces, and prohibiting discrimination on the basis of preexisting conditions. In order to receive free legal services from the HeLP Clinic, our clients must have an income that is less than 200% of the federal poverty level (FPL). Because of their level of income, our clients may feel the effects of this decision if the case is upheld. For example, the ACA provides premium assistance tax credits for individuals earning between 100-400% of the FPL, and so our clients may not receive these tax benefits anymore, and may not be able to afford insurance if they don’t qualify for Medicaid. If our clients wanted to change their current insurance plans, they may be denied coverage based on their or their children’s preexisting conditions. Many members of the legal field believe the Texas v. U.S. decision will be reversed on appeal, but as of right now the decision stands. Because bills like the AHCA and BCRA did not pass, there is nothing in place to replace the ACA and the future is uncertain.

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