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Texas v. U.S. Serves as Latest Threat to ACA’s Pre-Existing Condition Protections

Patrick Ouellette, Esq.

This week has featured opening oral arguments in Texas v. U.S. as part of the latest formal attack upon the Affordable Care Act (ACA). The case features 20 Republican governors and state attorneys general pursuing a preliminary injunction on the ACA. Despite technically serving as the defendant, the Trump Administration is defending the law and instead a group of Democratic attorneys have intervened in the case to defend the ACA. Among the key items at stake is the federal law’s guarantee that those with pre-existing conditions will not be denied coverage.

Congress eliminated the ACA’s individual mandate penalty starting in 2019, but the individual coverage mandate remains part of the law even if there technically are no “teeth” to this part since the tax penalties were essentially “zeroed out” by the Trump Administration. However, in their complaint filed on February 26, 2018, the plaintiffs argue that the “individual mandate to buy health insurance that lacks any constitutional basis”. For the mandate to be considered unconstitutional, according to the group, would have far-reaching ramifications that mean “the remainder of the ACA must also fall.” If successful, the governors and state attorneys general would abolish the ACA entirely along with its protection of those with pre-existing conditions.

Employers with self-funded health plans will be watching the results closely, as the pre-existing condition safeguards afforded to members would be removed completely along with the rest of the ACA. Concurrent with this court battle, North Carolina Sen. Thom Tillis led a group of Republican senators in introducing a bill recently that would apparently ensure coverage for those with pre-existing conditions. “This legislation is a common-sense solution that guarantees Americans with pre-existing conditions will have health care coverage, regardless of how our judicial system rules on the future of Obamacare.” However, the “Ensuring Coverage for Patients with Pre-Existing Conditions Act” only provides that insurers must accept those with pre-existing conditions, not necessarily that they need to treat them. This is an important distinction for insurers, as it would allow them far more liberty to deny coverage based on cost than what the ACA currently permits.

Stakeholders in the self-funded industry should pay attention to the progression of both Texas v. U.S. and the Tillis bill.