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In Q&A, Allison Hoffman discusses challenges to the Affordable Care Act

January 28, 2019

Penn Law professor Allison K. Hoffman is a frequently-cited expert on health care law and policy. Her work examines some of the most important legal and social issues of our times, including the Affordable Care Act (ACA). Penn Law’s Office of Communications spoke with Professor Hoffman about the current legal challenges to various provisions of the ACA, and the embattled health care legislation’s future prospects.

Penn Law: Now that the Affordable Care Act’s (ACA) individual mandate penalty has been reduced to zero by the Republicans’ tax bill, what kind of impact do you anticipate on the health insurance landscape?

Allison Hoffman: The zeroed-out penalty goes into effect this year, so we don’t yet know what the effect is going to be. It could potentially mean that fewer people buy health insurance, but I’m not sure how much of an impact it will actually have. For it to have an impact, people would have to have been buying insurance because of the mandate and not for other reasons. But if you think about what the picture of people buying insurance looks like, 83 percent of them are getting subsidies—meaning they’re getting health insurance, something that people presumably want, and they’re receiving government dollars to help them do that. So, while economists have predicted that [the lack of a penalty] is going to have some impact, it’s unlikely to destroy the exchanges.

PL: How would you describe the current status of the Affordable Care Act – relatively stable, endangered, or something else?

AH: I think it’s going through a rough patch. When you say the ACA, there are many pieces of it, and the piece I think you’re referring to the exchanges where people buy individual health insurance. That’s the piece that has been the primary, or at least the first, target of the Trump Administration. [The individual market] was on shaky ground already and could have been made better if a president had come along who wanted to try to bolster it, but instead we’re seeing lots of efforts to weaken it. Will it be weakened? Yes. But still, this year 11 million people bought health insurance on the exchanges, so it’s not crumbling. If somebody else comes along in a couple of years who wants to revive the exchanges, there will be the potential to do so.

Another piece of the story of the ACA and one of the places where some great insurance gains have been made is through Medicaid. Those gains have not yet been eroded by the current administration. However, the administration is also making changes there, including for the first time ever allowing states to do demonstration programs to experiment with requiring enrollees to work or do community engagement for their benefits. If that policy survives legal challenge, it could fundamentally transform the nature of the Medicaid program, and in my opinion that would be much more detrimental than whatever happens with the exchanges.

PL: Shifting gears, last year there was a lot of work being done in Congress concerning the ACA’s protection of people with preexisting conditions. During that time, Republicans put forward many proposals that they claimed protected preexisting conditions, but which you’ve argued actually left many loopholes for insurers. Where are we with those kinds of proposals?

AH: I think those proposals are dead now that we’ve seen Congress change in composition. Some of the proposals that Republicans were putting forward were in response to the Texas v. Azarcivil suit [challenging the ACA], saying, “if this Texas lawsuit strikes down the ACA’s protections, here’s what we’ll put in place instead.” But Republicans put forward a bunch of proposals that were just inadequate, and that didn’t actually create the kind of protection that the ACA had created. I think that was as much campaign rhetoric as anything else, because how could you run a campaign at a moment in time when health care is the top issue that people are paying attention to by saying, “we’re going to take health care away from people who are sick?” They had no option other than to say we’re going to preserve your access to medical care if you’re sick, whether those promises were genuine or not.

PL: Most recently, there was a decision out of a Pennsylvania federal court that blocked efforts to expand the employer exemption to the ACA’s contraceptive mandate. What is the significance of that decision?

AH: The decision came from Judge Wendy Beetlestone L’93, and she was the second judge to issue an injunction on the new regulations on exemptions to the contraceptive mandate, which were supposed to go into effect on [January 21]. Judge Beetlestone’s decision put a nationwide injunction on the regulations. What these regulations were attempting to do was to enable essentially any company, whether it be a closely-held company, a non-profit organization, an educational institution, or even a publicly-traded for-profit company, to choose to exempt themselves from the mandate if it was in conflict with their religious beliefs or, in most cases, moral beliefs. The regulations also wiped away any reporting requirements, so companies could just stop offering the coverage without being required to tell anyone they were doing so—including, in some cases, their employees. ERISA does have some requirements for employer plans, but the regulations tried to eliminate reporting where they could.

The plaintiffs in these cases are the states, and the states are saying that if employers and others stop offering contraceptive coverage and other kinds of preventive health coverage for women, people are going to go to free clinics to get it, and the states pay in part for those free clinics, so it’s going to be expensive for the state. Judge [Haywood] Gilliam in California and Judge Beetlestone have said that the states are likely to win on the merits and that they will be harmed if these regulations go forward, so we’re going to put them on hold until we can make a substantive decision. Their opinions give some sense of what their substantive decisions might be, which includes possibly finding that these rules violate the ACA’s Woman’s Health Amendment, and [finding that they] were enacted in violation of the Administrative Procedure Act.

PL: So far, we’ve seen challenges to the ACA’s contraceptive mandate, the individual mandate to purchase insurance has been zeroed out, and more.  Looking ahead, do you think that there are other vulnerable provisions within the ACA that we should expect to see attacked?

AH: I can imagine more. In fact, as I was reading through the contraceptive mandate decisions, I could imagine regulations going in whole different directions that could be damaging—but I don’t want to say what those things are because I don’t want to plant any ideas out there. I think the truth is that we’ve seen the biggest moves already, and I think we will see more.