Oyez! Oyez! ACA!

November 5, 2020

Photo by Adam Fagen licensed under CC BY-NC-SA 2.0

The Affordable Care Act is back in front of the Supreme Court. We explain the case and outline three ways this latest existential challenge to the law could end.

Listen to the full episode below, read the transcript or scroll down for more information.

The Basics: The Latest Challenge to the ACA

On Nov. 10, the Supreme Court is scheduled to hear oral arguments in California v. Texas, the third existential challenge to the ACA the court has heard.

In National Federation of Independent Business v. Sebelius (2012), a 5-4 court upheld the law’s requirement that people buy insurance or pay a fine — known as the individual mandate — as a constitutional tax. But it said the federal government couldn’t withhold Medicaid funding from states that didn’t expand access to the program, leaving that decision to the states.

In King v. Burwell (2015), the court ruled 6-3 that individuals in states that had not set up their own health insurance exchanges could still receive federal subsidies to help them pay for their monthly premiums.

Here’s what you need to know about the latest challenge:

Who's Involved?

A group of Republican-led states (led by Texas), two individuals and the Trump administration are challenging the Affordable Care Act. A group of Democrat-led states (led by California) and the U.S. House of Representatives are defending the law.

What Are the Arguments?

The Republican states and Trump administration are arguing that because Congress set the penalty for not buying health insurance to $0 in a 2017 tax reform bill, the individual mandate can no longer be considered a tax and is therefore unconstitutional. They also argue the mandate is so crucial to the ACA that if it is deemed unconstitutional, the entire law must fall.

What Do the Experts Say?

Most experts — including many involved with earlier challenges to the Affordable Care Act — say the Republican argument that the entire law must be invalidated if the mandate is ruled unconstitutional (known in legal circles as "severability") is very weak. However, that doesn't mean it couldn't still convince at least five justices to overturn the law.

The Upshot: How Could the Court Rule and What Would It Mean?

While we won’t know how the Supreme Court rules until sometime in 2021, Katie Keith, a law professor at Georgetown University and an expert on the Affordable Care Act, says there are three possible scenarios for how the case could shake out:

The Law Survives

  • How we could get there: The justices could uphold the law by ruling the Republican states and individuals don’t have standing to challenge the law, by ruling the individual mandate remains constitutional, or by saying even if the mandate is unconstitutional, the rest of the law can remain in place.

  • What would happen: Things would effectively stay the same — we have effectively been operating without the mandate since 2019, and the markets have been stable.

The Law Falls

  • How we could get there: The justices would have to rule that the individual mandate is unconstitutional and can’t be “severed” from the rest of the law.

  • What would happen: “Chaos,” says Katie Keith. The Urban Institute estimates that more than 21 million people would lose their insurance including 15 million currently covered by Medicaid and the Children’s Health Insurance Program (CHIP). The federal subsidies that help more than 9 million people pay for their monthly premiums would also stop. Protections for people with pre-existing conditions would also disappear, along with dozens of other provisions included in the 1,000+ page law that touch almost every part of health care from Medicare to nondiscrimination to drug approvals to nutritional information on menus.

Part of the Law Falls

  • How we could get there: The justices could rule the mandate to be unconstitutional and inexorably linked to some — but not all — of the law’s provisions.

  • What would happen: It’s impossible to say which provisions the court might strike down, but most experts agree the most vulnerable are also the most popular — those protecting people with pre-existing conditions. Anywhere from 54-133 million Americans have pre-existing conditions, and without the ACA’s protections, Congress would either have to pass new federal protections (something easier said than done) or individual states, employers and insurers would be left to decide whether to continue offering these protections.

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Episode Resources

Select Research and Reporting on the Affordable Care Act and the Supreme Court:

Oral Arguments in California v. Texas: Audio, Transcript (Supreme Court, 11/10/2020)

Explaining California v. Texas: A Guide to the Case Challenging the ACA (MaryBeth Musumeci, Kaiser Family Foundation, 9/1/2020)

What It Means To Cover Preexisting Conditions (Katie Keith, Health Affairs, 9/11/2020)

If the Supreme Court Ends Obamacare, Here’s What It Would Mean (Reed Abelson and Abby Goodnough, New York Times, 9/22/2020)

Potential Impact of California v. Texas Decision on Key Provisions of the Affordable Care Act (Kaiser Family Foundation, 9/22/2020)

The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates (Linda J. Blumberg, Michael Simpson, Matthew Buettgens, Jessica Banthin and John Holahan; Urban Institute; 10/15/2020)

Can States Fill the Gap if the Federal Government Overturns Preexisting-Condition Protections? (Sabrina Corlette and Emily Curran, Commonwealth Fund, 10/29/2019)

SCOTUSblog Coverage of California v. Texas

Episode Credits


Katie Keith, JD, Adjunct Professor of Law, Georgetown Law; Author of Health Affairs “Following the ACA” Blog

The Tradeoffs theme song was composed by Ty Citerman, with additional music this episode by Blue Dot Sessions.

This episode was reported, produced and mixed by Ryan Levi.

Additional thanks to:

Linda Blumberg, the Tradeoffs Advisory Board and our stellar staff!