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Five Ways the Health-Care System Will Change If the ACA Is Struck Down

If Friday's ruling striking down the ACA is upheld, the changes will be disruptive and far-reaching.
Dr. George Sawaya examines patient Susan Lehr at the UCSF Women's Health Center on June 21st, 2006, in San Francisco, California.

The ACA changed the U.S. health-care system, in ways both large and small. Were the legislation to simply disappear on a Friday night, with no warning and no replacement plan in place, chaos would ensue.

On Friday, Judge Reed O'Connor, a United States District Court judge in Texas, issued his ruling in the lawsuit against the Affordable Care Act brought by a number of Republican attorneys general. In the sweeping decision, issued the night before the final day of this year's open enrollment period, O'Connor ruled that, due to the GOP's repeal of the tax penalty associated with the individual mandate in 2017, the entire law is unconstitutional and should be struck down.

The ruling has no immediate practical effect. A number of blue state attorneys general have vowed to appeal the decision, and the Trump administration has confirmed that the ACA will remain in place as is while the appeals process plays out. (Health-policy experts have also stressed that consumers who purchase their insurance through the ACA's non-group exchanges should continue to pay their premiums.)

Legal scholars across the political spectrum expect the ruling will be struck down and the ACA will ultimately be declared constitutional and remain the law of the land. In the unlikely event that the ruling is upheld, however, the ruling's effects on the U.S. health-care system would be enormous. Describing all the possible effects of an ACA "repeal" would take many thousands of words, but here are five of the biggest ways the U.S. health-care system would change if the ACA was simply eliminated with no replacement.

Almost 12 Million Medicaid Enrollees Would Likely Lose Their Health Insurance

The ACA expanded Medicaid eligibility to previously ineligible low-income adults earning less than 138 percent of the federal poverty line. According to the Kaiser Family Foundation, almost 12 million newly eligible Americans in this demographic group had enrolled in Medicaid as of the end of fiscal year 2016. (An additional 3.2 million were eligible before, for various reasons, but enrolled only after the passage of the ACA, perhaps due to increased publicity.)

If the ACA were struck down, these enrollees would lose their Medicaid eligibility; few would be able to afford insurance in the private market. Meanwhile, an estimated 500,000 low-income adults living in the five states that either voted to expand the program via ballot initiatives or elected supportive governors in the 2018 mid-terms would also lose their shot at enrolling in Medicaid in the future.

The effects extend beyond even that. "If it's struck down, you're not necessarily even going to be able to go back to where you were pre-ACA," says Linda Blumberg, a researcher at the Urban Institute, a left-leaning think tank. "Prior to the ACA, for example, there were some states that had expanded Medicaid eligibility for non-parents and had waivers and were getting federal funds for these expansions. Those waivers don't exist anymore. All those waivers would have to get renegotiated. The world has changed a lot since then and we can't necessarily just easily go back."

Almost Nine Million Subsidized Non-Group Market Enrollees Would Lose Their Subsidies

For Americans earning between 138 percent and 400 percent of the federal poverty line, the ACA established a system of federal subsidies for the purchase of health insurance in the non-group market. During the first half of 2018, 8.9 million Americans received those subsidies. Another 1.4 million unsubsidized Americans enrolled in insurance through the ACA's exchanges. Those 8.9 million moderate-income Americans would no longer receive financial assistance to purchase health insurance.

People With Pre-Existing Conditions Would Lose Important Protections

The ACA provided Americans with pre-existing conditions who purchase their insurance in the non-group market with three important protections: guaranteed issue (meaning insurers couldn't deny them coverage), community rating (meaning insurers couldn't charge those consumers more), and coverage for certain essential health benefits (meaning insurers had to provide comprehensive coverage to all consumers).

All three of those provisions are necessary to protect Americans with pre-existing conditions; if the ACA were struck down in its entirety, all three of those protections would simply disappear. Americans with pre-existing conditions (and without employer-sponsored insurance) would once again be faced with astronomical health insurance premiums, if they could find insurance at all. While young, healthy Americans might be able to find cheaper health insurance in a non-ACA world, the plans available to them would be dramatically less comprehensive.

"Before the ACA, people could get something pretty cheap if they were healthy, but it didn't cover that much if you got sick—there were no essential health benefits, no bans on coverage limits," Blumberg says. "So if they got sick, they were often in a really bad financial way."

The ACA also established bans on annual and lifetime coverage limits, which were common in the non-group market and also permissible in the employer-sponsored market before the law's passage. Those bans would also disappear, leaving even those who get health insurance through their employers vulnerable to financial devastation in the event of a serious accident or illness. Also gone would be the ACA's provision allowing young adults to remain on their parents' insurance until the age of 26 and the law's requirement that plans provide certain free preventive services.

Serious Chaos Would Ensue

The ACA changed the U.S. health-care system, in ways both large and small. While a few significant provisions of the law—the individual mandate, the protections for those with pre-existing conditions, the Medicaid expansion, the premium tax credits—have attracted the most attention, the legislation has touched every corner of the health-care system and almost every person in the country. Were the legislation to simply disappear on a Friday night, with no warning and no replacement plan in place, chaos would ensue. What, for example, would happen to Medicare payment rules? Or to the requirement that employers provide spaces for nursing women to pump breastmilk? Or to the rules governing essential health benefits and preventive care?

"I think there's an under-recognition of the chaos that would occur," Blumberg says. "There's just enormous reach here—there are hundreds of provisions that reach very deep into the different ways in which people are living their lives right now and getting their health insurance coverage."