More than six years after becoming law, the Affordable Care Act (ACA) remains heavily litigated. Since 2010, dozens of lawsuits have been lodged against it, with four of them reaching the United States Supreme Court – a remarkable number given the law’s relatively short lifespan and the fact that the Court only grants approximately 80 of the 8,000 case petitions it receives each year. ACA litigation continued apace over the past year, with two new important decisions handed down in May of 2016.
One decision was issued by the Supreme Court, but in fairness the word “decision” is a bit of an overstatement, as the Court – currently reduced to 8 members following the death of Justice Scalia and the Senate’s failure to take up President Obama’s nomination to replace him – punted on the merits of the case. At stake in Zubik v. Burwell is whether religiously-affiliated, not-for-profit employers that oppose contraception are effectively “complicit” in the provision of contraceptives to their women employees by virtue of filing a form with their insurance carrier that attests to their opposition, which in turn triggers a process by which the insurance provider and the federal government provide the contraceptive coverage. (Under the ACA, for-profit companies that employ more than 50 people must provide insurance coverage for the 20 types of contraceptives for women approved by the Food and Drug Administration, but not-for-profit companies can exclude themselves from this requirement by filing the form.) Under the separate process, the employer is not on the hook for any associated costs, and coverage is supplied through an insurance policy that is distinct from the employer’s.
Nonetheless, multiple religiously-affiliated, not-for-profit employers sued, claiming that the filing of the form violates the Religious Freedom Restoration Act, a statute prohibiting the federal government from “substantially burdening” religious beliefs unless the law is necessary to achieve a “compelling” government purpose. On May 16th, the Supreme Court sent the case back to the federal Court of Appeals, expressing “no view on the merits of the case, [including] whether petitioners’ religious exercise has been substantially burdened, whether the government has a compelling interest, or whether the current regulations are the least restrictive means of serving that interest.” In a brief opinion, the Court wrote that both the employers and the federal government stated in briefs to the Court that it was feasible that “contraceptive coverage could be provided to petitioners’ employees, through petitioners’ insurance companies, without any such notice from petitioners…. Given the gravity of the dispute...the parties should be afforded an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans receive full and equal health coverage, including contraceptive coverage.”
The second noteworthy ACA decision of 2016 was handed down by a federal trial court judge just a few days before the Zubik opinion was issued – but House of Representatives v. Burwell is a case that may eventually end up at the Supreme Court as well, given what’s at stake: whether the ACA’s insurance premium cost-sharing subsidies are subject to annual appropriations by Congress.
Under the ACA, insurance companies that want to sell products in the online marketplaces set up by the law must cover certain “essential health benefits” and demonstrate an “actuarial value” (i.e., the percent of covered claims paid by the plan) ranging from 60% to 90%. Eligible people who buy these qualified health plans are entitled to both premium assistance (in the form of refundable tax credits) and cost-sharing subsidies. Eligibility for premium assistance ranges from 100% to 400% of the federal poverty level; eligibility for income-adjusted cost-sharing assistance is effectively capped at 250% of poverty, though the majority of marketplace plan enrollees receive this type of assistance. The federal government pays both types of subsidies directly to health insurers, which in turn pass on savings to those members who qualify for one or both types of subsidies.
Under the ACA, premium assistance subsidies are considered mandatory (as opposed to discretionary) spending, require no annual appropriation, and are not specifically at issue in House of Reps. v. Burwell. However, Republican members of the House of Representatives sued the Obama Administration over the ACA’s cost-sharing provisions, contending that the law as written requires those subsidies to be appropriated annually. Unsurprisingly, the Administration argued that interpreting the ACA in this way would produce severe health insurance market defects that the ACA was, in fact, designed to cure. But the trial judge agreed with the plaintiffs, concluding that the cost-sharing subsidies are subject to annual appropriations, and that Congress is at liberty to decide whether to appropriate the needed funds. As is typical in high-stakes cases where an appellate court is likely to supersede a trial court decision, the trial court judge stayed her ruling pending appeal, meaning that for now the cost-sharing assistance will continue to flow to insurance companies and the people they insure.
In the end, for the time being at least, the parties and the law in both Zubik v. Burwell and House of Reps. v. Burwell are left in a state of uncertainty. Thus both cases bear close watching: Zubik could implicate the operation of the ACA’s contraception mandate, while House of Reps. v. Burwell could produce the kind of result that could fundamentally undermine the ACA as a whole.
Joel Teitelbaum, JD, LLM is an Associate Professor and the Vice Chair of Academic Affairs in the Department of Health Policy at the George Washington University School of Public Health and Health Services. He also serves as Managing Director of the School’s Hirsh Health Law and Policy Program. Along with co-author Sara Wilensky, Professor Teitelbaum is the author of Essentials of Health Policy and Law, Third Edition from Jones & Bartlett Learning. (Qualified instructors are invited to request review copies here.) Professors Teitelbaum and Wilensky are also the authors of an annually updated chapter on health reform which may be bundled with any Jones & Bartlett Learning text at no additional cost.