Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!

Dan Gorenstein: As we record this at 6 p.m. Eastern time on Wednesday, Nov. 4, it’s still not clear who will be the next president or which party will control the Senate.

But however the final returns shake out, one thing we know — next Tuesday, the Affordable Care Act will be in front of the Supreme Court … again.

SFX: Oyez oyez oyez

For the third time this decade, the fate of the wide-reaching health care law is in the hands of the high court.

News clip: The Supreme Court has upheld the requirement that every American buy health insurance.
News clip: Upheld a provision giving middle and low income Americans financial aid to buy insurance.
News clip: Chief Justice John Roberts twice now saving Obamacare.

DG: Today, we look at how the court could rule and what the possible outcomes could mean for our health care system.

From the Annenberg Studio at the University of Pennsylvania, I’m Dan Gorenstein, and this is Tradeoffs.

Katie Keith: I’m Katie Keith, I’m a faculty member at Georgetown University. It is my job to know everything that’s going on with Obamacare from new federal regulations, new legislation, and increasingly everything that’s going on in the courts, which I do think I spend most of my time on these days.

DG: Have you ever been able to figure out, Katie, why this has been such a magnet for litigation?

KK: I think litigation has been sort of politics pursued through other means. Frankly, red state leaders who oppose the Affordable Care Act could not get the policy that they wanted through Congress, and I’m speaking more about the efforts in 2017.

President Trump: Tonight I am also calling on this Congress to repeal and replace Obamacare.
News clip: Plan to repeal and replace Obamacare on hold.
News clip: The battle lines are forming in the Senate over replacing Obamacare.
News clip: Sen. John McCain, just days removed from his cancer diagnosis, stunning the chamber, turning the thumbs down.
Senate clerk: Mr. McCain
McCain: No [gasps]

KK: I had perhaps naively hoped that after you kind of had this yearlong effort in 2017, this failed effort to repeal the law, that maybe we would have been able to move on. Instead, what you got is Texas joined at that point by 19 other Republican states filing this lawsuit in February of 2018.

DG: So that takes us to the latest challenge. And it’s called California v. Texas. The Supreme Court is scheduled to hear arguments Nov. 10, and a ruling is expected next year in 2021. Katie, what are the basics of this case? What are the essentials we need to know?

KK: So on one side, you have what is now 18 red states, two individuals and the Trump administration. The law, on the other hand, is being defended by a separate coalition of 21 Democratic states and the House of Representatives.

DG: And really, what triggered this lawsuit, right, Katie, is that Republicans took that penalty, the individual mandate, the requirement that people pay some sort of fine if they don’t have insurance, they took that down to zero. And that was really what initiated this particular lawsuit, right?

KK: That’s right. And the argument that they’re making is that without that penalty, the individual mandate is no longer a tax, which is what the Supreme Court called it in the 2012 decision in the first challenge over the Affordable Care Act.

News clip: Chief Justice in the majority decision writes, “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax.”

KK: Fast forward, Texas is arguing this thing is no longer a tax. If there’s no penalty attached, it can no longer be sustained under the decision that the chief justice wrote in 2012. Therefore, the individual mandate is now unconstitutional. The real kicker here is that they take it, you know, one step further, which is to say if the mandate is unconstitutional, the entire law must fall.

DG: And Katie, I remember when this first came out that at least among legal expert types, there was a lot of sort of clucking that, you know, this is sort of a frivolous case, there’s no way this is going to make its way to the Supreme Court. But obviously, the case picked up enough steam and now here it is. Why is that?

KK: Welcome to the exciting world of Affordable Care Act litigation. Surprise, surprise. But you’re exactly right. This has been very widely criticized, including by The Wall Street Journal editorial board and the National Review editorial board and conservative legal scholars who supported the prior two challenges to the Affordable Care Act. Your question about why this has sort of picked up steam or why it’s actually headed to the Supreme Court, I think does stem from the district court decision.

News clip: Late Friday night, a federal judge in Texas ruled the law unconstitutional.
News clip: Judge Reed O’Connor
News clip: Judge Reed O’Connor
News clip: Reed O’Connor

KK: Judge Reed O’Connor, who’s a federal judge in the northern district of Texas who hears many, many Affordable Care Act challenges and is pretty consistently hostile to the ACA. And so I think the legal arguments here are very weak. However, I was not surprised by his decision.

DG: So, Katie, even though this case has been sort of widely criticized across the political spectrum, there are a number of ways that the court could rule, which would have different impacts on the law and people’s ability to access health care. So let’s walk through this in a kind of Let’s Make a Deal style, that old game show where there’s Door Number 1, 2 or 3.

And let’s start with Door 1 — the law survives, it’s intact. How could the court get there?

KK: I love this analogy. So, Door Number 1, I would say is sort of the status quo. Nothing changes. Folks have the same access that they’ve had. So the court could say that the individuals and states don’t have standing to sue. You know, you don’t just get to challenge things that you don’t like on principle. You have to have an actual injury. They could find that the mandate is still constitutional. They could say, you know, yeah, it’s not a tax right now, but it still has all the hallmarks of a tax, Congress could easily come in and dial the mandate back up. Or they could find the mandate to be unconstitutional, but fully severable from the rest of the law. So you just sort of strike down the unconstitutional mandate. Everything else stands. Functionally, we have not had an individual mandate since 2019. So that provision would be gone, but really things would stay quite the same.

DG: And if that happens, Katie, and I think I know what you’re going to say, but if we do keep the status quo, is that going to be the end of all these existential court challenges to Obamacare?

KK: I doubt it. Even if there’s no sort of additional existential legal threat like this where you can try to take down the whole law, we’re absolutely going to continue to see litigation over its implementation. And you know, I think this is a little bit of a warning sign or it should be for whatever the next wave of health reform is. You know, whether your policy choice is a public option or Medicare for all or something in the middle of that, I can only imagine that this is going to continue to be a strategy that’s used over time.

DG: Ok so…

KK: Depressing. 

DG: That’s Door Number 1. Yeah, a little grim, but the law is upheld and things go on mostly as they have been, both in terms of the policy in place and the impact that has on people, but also the lawsuits.

So let’s go to Door 2 — the court strikes the entire law. Now what happens? 

KK: Utter chaos. I mean, I can’t even begin to really explain what the actual repercussions would be. And in reality, this is a big, broad law. It’s 1,000 pages. And it really touched every part of the health care system, from the FDA to the public health system to Medicare to Medicaid, in addition to sort of the most talked about insurance provisions. That big, broad law has been baked into the fabric of the health care system for the past 10 years. There is, in my opinion, there’s no way to sort of snap your fingers and undo it. 

DG Q: And this could be a real nightmare, right? The Urban Institute has estimated 21 million people would lose coverage, including 12 million on Medicaid and millions more who get federal help to buy private coverage. 

Studies have shown that the Medicaid expansion in particular has improved health care access, financial stability and a few even suggest it’s saved lives. 

And as you say, Katie, the ACA really has been baked into the fabric of society at this point. What other impacts could we see that are sort of under the radar? 

KK: Sure. So, you know, there would be changes to the Medicare drug donut hole. That is a benefit that helped make prescription drugs more affordable for seniors on Medicare. States, I think, state budgets — they’ve set up exchanges, they’ve expanded Medicaid. What does that mean for states, particularly in the budget crisis that they’re all facing? And then industry. I’ve talked to insurance industry folks who are like, “We started to make a list of all the things we’d have to do in response, and we stopped because it feels impossible.”

DG: A practical question here: If the law is struck down, does it all happen like right away, or is there time for some sort of like replacement, some sort of like phase out period?

KK: Great question. So the Supreme Court can do whatever it wants. So it is certainly within the realm of possibility for them to give Congress, for example, a bit of a grace period or a cushion to go in and fix whatever, you know, constitutional defect here they find. That has happened, to my knowledge, in a handful of cases before. But even when it has, it’s been maybe a 30 day extension or something like that. So even if the court were to do that, I think that grace period could be quite short, and Congress would still need to be very ready to do something to fix the ACA.

DG: So we’ve got Door Number 1 — things stay the same. Door Number 2 — law is struck down and chaos ensues. I’m a little scared to ask you this, Katie, but what’s behind Door Number 3?

KK: So Door Number 3, I sort of call the “some disruption” bucket where not all of the entire law is struck down, but maybe major parts of it are. It’s a little bit challenging to talk about this because, you know, we don’t know exactly where the court would draw the line. It’s fully within the court’s discretion to say which provisions of the ACA is the mandate so essential to that they must be struck down alongside it. And the ones that I’ve got my eye on are the protections for people with preexisting conditions. Provisions like guaranteed issue, which is what prevents insurance companies from refusing to insure you altogether because of a health condition. Something called community rating, which prevents you from being charged higher premiums because of something in your health history. And a ban on pre-existing condition exclusions, which is what prevents the insurance company from including really broad language in its policy to say we’re never going to cover any kind of service you need to treat a pre-existing medical condition.

DG: These are the provisions that have really reimagined what health insurance as a product looks like in our country.

KK: That’s right. We really didn’t have these protections in place prior to the Affordable Care Act. There were really only a handful of states that had even gone down this road or experimented with those types of protections.

DG: And of course, all of this is happening in the middle of a pandemic. And I’ve heard lots of concerns about COVID being treated as a pre-existing condition going forward. If the court goes for this Door Number 3, Katie, could Congress just pass a law saying pre-existing conditions will be covered?

KK: So, of course, Congress could fill in any gaps that the court leaves, but it’s not really as simple as most people think. It’s really popular to talk about protecting people with pre-existing conditions.

President Trump: It is the official policy of the United States government to protect patients with pre-existing conditions. So we’re making that official.

KK: In practice, it’s a lot more challenging to do. It takes interlocking reforms that all work together. And so some of the proposals that we’ve seen, particularly from Republicans in Congress, they almost always leave a gap in one way or another. So absolutely, Congress could act, but you’d have to do so in a comprehensive way. And I think that could be a real challenge for folks.

DG: As we record this Wednesday evening, we still don’t know for sure who the next president will be, and we don’t know which party is going to control the Senate. Given what we do know, I could imagine a scenario where the Supreme Court picks Door Number 3 — some disruption — but Congress and the president struggle to agree on legislation to restore these protections. If that happens — I mean, this is very hypothetical — but if that happens, what would the fallout look like in your mind?

KK: It would vary pretty dramatically by state. You know, some states have passed their own laws to try to fill in the gaps. You might see employers trying to retain some of these protections. You might see insurance companies doing the same thing. But that just sort of goes to show how much variation there would be. You would no longer have sort of one uniform federal standard that applies across the board.

DG: Right. It’s the kind of thing where you start to pull on a thread and the next thing you know where you live will determine a lot about the kind of coverage and access to health care that you have. So finally, Katie, if whoever ends up in the White House and Congress wants to avoid the uncertainty of waiting to see what the Supreme Court does, what path they go down, could lawmakers just pass something in the meantime, Katie, and just like make all of this moot?

KK: Yeah, absolutely. So at its core, this case is about the individual mandate and the penalty. And so if Congress wanted to, they could go in and increase the penalty back up from zero to almost anything. They could add a severability clause to the Affordable Care Act to make it clear to the court that the rest of the law should stand, and they could even just go in and strike that provision itself. It’s unclear to me if Congress is going to want to do this or how big of a priority it will be given all the other things on their plate. But they absolutely could take care of this on their own and keep it out of the court’s hands. 

DG: Katie, thanks so much for taking time to talk to us on Tradeoffs.

KK: Anytime. Thanks for covering this and doing what you all do.

DG: We may get a sense of which door the justices will take the country through after next week’s hearing.

You can listen to the oral arguments yourself — a first for a major ACA case. You can also keep up with Katie’s analysis of the proceedings on Health Affairs and in next week’s edition of the Tradeoffs newsletter

Make sure you’re signed up to receive our newsletter by clicking the link in our show notes or going to

This is our final episode of Season 1.

When we launched a year ago, we thought we’d drop two stories a month, and then, COVID. 

Since the spring, our small and mighty team has pumped out two stories a week. 

It’s an honor to work with such a great team. 

And after 83 episodes, we’re taking a break and getting ready for Season 2. 

We’ll still send out our weekly newsletter flagging new research and sharing staff recommendations, and we’ll be back with more health policy stories in January. 

Until then — thank you. Thank you for taking this wild ride with us. 

I’m Dan Gorenstein and this is Tradeoffs.