Supreme Court Upholds ACA, Says States Lacked Standing

The Supreme Court on Thursday tossed a lawsuit that once again threatened the Affordable Care Act (ACA), ruling 7-2 that Republican-led states who brought the case lacked legal standing to challenge the law.

For the third time, an increasingly conservative court left intact the law’s protections that require coverage for preexisting conditions, created Medicaid expansion, promote health screenings and preventive care, and launched novel, value-based payment strategies within the agency that manages Medicare and Medicaid.

The ruling comes as President Joe Biden has tried to build on the ACA and create new incentives for states that have not expanded Medicaid to do so, amid mounting evidence that having health coverage reduces mortality.

Justice Stephen Breyer wrote the opinion and was joined by Justices Elana Kagan and Sonia Sotomayor, as well Chief Justice John Roberts and two appointees of President Donald Trump, Justices Brett Kavanaugh and Amy Coney Barrett. The opinion focused on the fact that individual states governed by Republicans, along with individual plaintiffs, had failed to show “a concrete, particularized injury fairly traceable to the defendants,” and thus could not challenge the law on constitutional merits.

The latest challenge, led by Texas, began after Trump’s 2017 tax law eliminated the enforcement mechanism for the ACA’s individual mandate. On those grounds, the Republican-led states tried to assert that the entire law must fall, even provisions unrelated to the requirement that all Americans have health insurance.

Today, the Supreme Court’s majority found that the states failed to make their case that the de facto end of the mandate would cause them harm, which would create grounds to challenge the entire ACA.

“Unsurprisingly, the States have not demonstrated that an unenforceable mandate will cause their residents to enroll in valuable benefits programs that they would otherwise forgo. It would require far stronger evidence than the States have offered here to support their counterintuitive theory of standing, which rests on a ‘highly attenuated chain of possibilities.’”

Justice Clarence Thomas wrote a concurring opinion, stating, "Although this Court has erred twice before in cases involving the Affordable Care Act, it does not err today."

An estimated 20 million people had gained coverage under the law at a peak in 2017, but there was some loss of coverage during the Trump administration. More recently, more than 1 million people signed up for coverage through the ACA under a special enrollment period authorized by the Biden administration due to the COVID-19 pandemic. The American Rescue Plan reduced premiums, and additional proposals would make those premium cuts permanent.

While many legal experts had questioned the merits of the Republican states’ challenge, the addition of Justices Neil Gorsuch, Kavanaugh, and Barrett to the court raised concerns among the law’s supporters about what would happen once the case reached the highest court. Gorsuch and Justice Samuel Alito dissented, but the other Trump appointees ruled with majority on the narrower question of standing.

The latest challenge was argued in November, just after Barrett joined the court, and the defense was organized by a group of officials from Democrat-led states. Their leader was former California Attorney General Xavier Becerra, recently confirmed as Biden's HHS secretary.

The ACA is now one of the most litigated pieces of legislation in history. It survived an initial challenge after its passage in 2010, although the court did reshape the law by allowing states to opt out of Medicaid expansion.

However, that decision ended up creating an environment for research comparing health outcomes between expansion and non-expansion states, and now data are pouring in that show how populations with health coverage benefit in multiple ways—those whose cancer is caught early live longer, and those with diabetes who are able to manage their disease suffer fewer complications.

Veterans of the Obama administration who helped write and implement the ACA were surprised and pleased this morning, and said the decision opens the door for the Biden administration to improve the law.

“Bottom line—this is incredible,” former Obama administration policy official Kavita Patel, MD, told MSNBC. “It’s a chance for the Biden Administration to try to take back some of what the country lost when the individual mandate was taken away. … Not being a lawyer, I don’t think you could have a clearer path saying, ‘this is it.’”

“It’s not a close call in terms of the law, and not a close call in terms of who we are as a country,” said former Acting CMS Administrator Andy Slavitt.

Chiquita Brooks-LaSure, now CMS Administrator with chief responsibility for implementing the law, recalled her work on its passage during her tenure with the House Ways and Means Committee.

"Millions of Americans can breathe a sigh of relief following today’s Supreme Court 7-2 ruling upholding the Affordable Care Act," she said. "This victory assures access to affordable and comprehensive health insurance for patients and families across the country."

She pointed to the fact that 12 states have still not expanded Medicaid, but the Biden administration hopes that will now change. "Through the ACA, and hand-in-hand with CMS, dozens of states have expanded Medicaid – bringing quality coverage to our family and neighbors who need it most. We will continue to partner with states because we know 4 million more Americans stand to gain access to quality health coverage in the remaining states."

Other supporters of the ACA also called for working to improve the law.

"CareFirst is pleased that the key provisions of the Affordable Care Act remain in effect and will continue to promote access to affordable health insurance for the individuals we serve and all Americans,” said Brian D. Pieninck, president and CEO of CareFirst BlueCross BlueShield. “CareFirst looks forward to continuing our work with federal and state policymakers to maintain and improve access to healthcare throughout our region."

Officials from the Robert Wood Johnson Foundation called for an end of “meritless attacks against a milestone law. … It is time now for our nation to resume its path toward achieving universal health care coverage.”