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Future of Healthcare Reform – ACA Litigation and Trump Administration Plan

October 15, 2020

The Trump Administration has recently indicated its health care strategy for affordable, high-quality healthcare through an executive order announcing the America First Healthcare Plan (AFHP). This executive order comes as the US Supreme Court has agreed to hear arguments soon after Election Day – on November 10, 2020 – challenging the constitutionality of the Affordable Care Act (ACA). A final ruling from the Court is expected to be announced at the latest by June 2021, but the decision could come at any time after the case is heard.

The Executive Order (AFHP)
Supporters see the AFHP as a further step in the Trump Administration’s move toward a small government approach to healthcare. The AFHP’s stated goals are to increase patients’ choice of health plans, lower healthcare costs, and provide better quality of care. It is primarily aimed at protecting people with preexisting conditions and combating surprise medical billing. The AFHP emphasizes short-term and association health plans (AHPs) and health reimbursement arrangements (HRAs) to provide more choice. It pushes price transparency to bring down healthcare prices and would tie drug prices to overseas rates. The executive order directs the federal agencies to maintain and build upon existing actions to expand options for affordable health care and access to affordable medicines, ensure consumers have access to meaningful price and quality information before the delivery of care, and reduce waste, fraud and abuse in the health care system. The order does not make any changes to existing laws or regulations, but directs federal agencies to issue new guidance to implement the order’s goals. As a result, next steps remain unclear until Congress takes further action or the agencies issue further guidance.

The ACA Litigation
A lawsuit seeking to invalidate the ACA in its entirety is pending before the U.S. Supreme Court, with oral arguments scheduled for November. Both sides’ arguments are available for review on the Court’s website. This will be the third time the Court has reviewed the ACA’s constitutionality. In 2012, the Court upheld the ACA on the basis that the individual mandate is a valid tax, and then in 2015, the Court upheld the constitutionality of the ACA’s health insurance Exchange subsidies. One possible outcome in this go-around is that the Court could decide the individual mandate is not a constitutionally permitted tax, sever the mandate from the statute, and allow implementation of the law to proceed essentially as it is now. While some experts consider it unlikely that the ACA will be completely overturned, it is important to note that even if the ACA is ruled unconstitutional, the legal and political impacts are hard to predict in advance and, in any event, would not necessarily take effect immediately.

Although the ACA faces an uncertain future, all of its remaining provisions remain currently applicable. So as it stands now, the ACA requirements continue, including the 2020 Exchange enrollment, the “employer mandate” and related reporting requirements (Forms 1094/5), and all other current ACA requirements. We’re watching the AFHP strategy and the ACA Supreme Court process and we will continue to share important updates as warranted.

Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

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