So What if ACA is Unconstitutional?

• Author: Orient, Jane M.
• Position: [GUEST OPINION]

Stocks of hospital and Medicaid-contracted managed-care companies plunged on the announcement of Judge Reed O'Connor's ruling that the Affordable Care Act (ACA) is unconstitutional. Some advisors consider this a "buying opportunity." expecting that the ruling will be reversed on appeal. This shows who the important stakeholders are.

Medicaid managed-care contractors get a monthly payment for each enrollee, whether any care is provided or not. The majority of newly insured people are in expanded Medicaid. And the vast majority of Medicaid recipients are in managed care.

The quality of coverage may be very poor. In fact, all ACA coverage is likely to be worse than the plans many had before ACA. Forced to take added risk by the "pre-existings protections," insurers cut quality, through narrow networks, limited drug formularies, and various ploys to make themselves unattractive to people with expensive problems. Insurers who can't turn a profit--or have a loss rather than an excess if they are "nonprofit"--leave the market. Then there's less competition for the big players skilled in systems gaming.

Where in the Constitution does Congress get the authority to outlaw 10 January 14, 2019 / INSURANCE ADVOCATE the plans that millions have chosen to purchase to help pay medical bills, and force them to buy a product they can't afford and don't want? It is nowhere to be found. This is why the Association of American Physicians and Surgeons (AAPS) challenged its constitutionality as soon as ACA passed.

Since the New Deal, however, the Constitution has been taken to mean whatever a judge says it does.

Various judges have handed down differing rulings on ACA. In 2012, a 5:4 U.S. Supreme Court majority held that the Commerce Clause, which allows Congress to "regulate interstate commerce." does not extend so far as to allow Congress to make people buy something.

ACA would have been declared unconstitutional except that Chief Justice Roberts found a way to save it. He declared the "shared responsibility" payment or individual mandate--the penalty for not purchasing an acceptable plan--to be a tax. Before that, proponents argued that it was not a tax. The government's taxing power is virtually unlimited. So, the mandate to purchase insurance isn't really forcing you to buy a product, which would be unconstitutional. You have the choice of paying a tax instead.

Along came the Tax Cuts and Jobs Act (TCJA) and zeroed out the individual mandate. TCJA couldn't...