Editor's Note: This article was updated on November 7 at 12:30 p.m. to reflect the outcome of the 2020 presidential race.
With the confirmation of Amy Coney Barrett to the Supreme Court, you have to be wondering what will happen to the Affordable Care Act (ACA) and how its potential demise might affect your company.
On November 10, the high court is set to consider the constitutionality of the landmark health care legislation popularly known as Obamacare, which former President Obama signed into law in 2010. The key question for the justices in the consolidated cases (California v. Texas and Texas v. California): Can the law still stand if part of it is unconstitutional?
President Trump's biggest legislative accomplishment--the Tax Cuts and Jobs Act (TCJA) of 2017--augured the aforementioned question, by striking the tax penalty for not having health coverage, a provision known as the individual mandate. Without that provision, the law may be undermined to the point that justices could toss it out entirely.
That will carry direct consequences for the 23 million Americans who are currently enrolled in insurance plans through the ACA's health care exchanges or receive coverage through Medicaid.
Losing Obamacare could also pose downstream consequences for small businesses, says Robert Litan, an attorney and nonresident senior fellow at the Brookings Institution, a nonpartisan think tank in Washington, D.C. He warns that nullifying the law could trigger "chaos in the insurance markets," and that instability could hit employers of all stripes.
Prior to the pandemic, more than 150 million people in the U.S. got their health coverage through an employer. The law protects all Americans--even those covered by an employer--from caps that in the past had limited how much insurers or employers had to pay out in coverage each year, or over a lifetime. Taking the guardrails off could be jarring for all stakeholders and contribute to massive volatility, Litan says.
Although the justices won't rule until next summer, three possibilities could emerge, depending who takes the White House:
1. Biden wins and remedies the ACA
With Joe Biden as president, he could move to fix the issue, so the question of constitutionality becomes moot. Litan notes that fixing the ACA's individual mandate issue is simple. "The Democrats could pass a one-line bill tomorrow and add to the ACA a provision that says the individual mandate is severed from the rest of the law," he says. "Or they could pass a law that says that if you don't buy individual insurance, we're going to put a $1 tax on you."
In other words, by reinstating the tax for noncompliance, you're preempting the court's decision. If such a provision were to be enacted, the case would be dismissed since the court would no longer have jurisdiction to examine the validity of the law without the individual mandate--and certainly not the validity of the entire law. According to Litan, in that scenario, "the states theoretically could sue all over again, but would have to find other things 'wrong' with the Act."
This path should be tempered by the fact that even if Democrats take the Senate, their majority will be thin and will almost certainly require some Republicans to support any effort at reform. Ron Hira, an associate professor of political science at Howard University, suggests that Democrats would still fall short of the 60-vote majority necessary to overcome a filibuster.
Another possibility? Biden could strike the individual mandate from the law altogether, says Nicholas Bagley, a University of Michigan Law School professor. He suggests doing so would have little or no effect on the rest of the regulatory framework--and Republicans might favor losing the provision.
2. The Supreme Court upholds the law
The court could strike only part of the law, and still find the remaining part constitutional. Legal scholars call this an issue of "severability"--that is, there's a presumption that a doctrine still stands even if part of said law is found unconstitutional. When asked about this issue on the third day of her congressional testimony, Barrett said she agreed with that view. "The presumption is always in favor of severability," she said. "It's a question of your intent."
Indeed, this is a pretty realistic outcome, Litan says. "Despite all the furor over the ACA case during the Barrett confirmation hearings, I still suspect they'll sever that one piece and not strike down the law."
3. Republicans keep up the heat
No matter what the court rules, the ACA is expected to remain a target. Republicans could continue to attack the law. As a proxy for what could happen, it can be helpful to review what took place during Barack Obama's second term in office. At the time, the House of Representatives was led by Republicans, who voted to repeal the law more than 60 times. At one point, the measure garnered enough votes to get all the way to Obama's desk, where he vetoed it. Biden would surely follow suit.