States Continue ACA 'Civil War' in the Courts: NAIC Meeting Speaker

States look as if they're fighting a "litigation 'civil war'" over a number of issues related to the Affordable Care Act, a top benefits lawyer told a group of state insurance regulators Sunday.

The lawyer, Anthony Shelley, used that metaphor while giving the regulators a case update on Texas v. United States.

Shelley appeared in Boston at the National Association of Insurance Commissioners summer meeting, at a session organized by the NAIC's Health Insurance and Managed Care Committee.

Shelley compared the Texas v. United States case with other cases in which states critical of the ACA have squared off against states that generally support the ACA.

Shelley suggested, for example, that the U.S. Department of Labor's new association health plan regulations and the Trump administration's new short-term medical insurance benefit period regulations could soon spark similar court battles, according to a slidedeck included in a meeting document packet. The packet is available on the Health Insurance and Managed Care Committee's section of the NAIC's website.

The Texas v. United States case poses a "serious and potentially mortal challenge to the ACA in the individual market," Shelley said, according to the slidedeck.

"Did prior ACA rulings from the Supreme Court back the courts into a corner and now necessitate a holding of unconstitutionality?" Shelley asks.

Texas v. United States

One key provision in the ACA has required many individuals to have what the federal government classifies as solid major medical coverage, or "minimum essential coverage," or else pay a penalty.

Supporters of the provision say that using a mandate to maximize the number of young, healthy people who pay for coverage is critical to holding the cost of coverage down.

Critics have argued that the provision is as unconstitutional as a mandate requiring U.S. residents to buy broccoli.

The U.S. Supreme Court ruled early on that the provision is constitutional because it is mainly a tax, not a requirement that people buy a commercial product.

Texas and other states that oppose the ACA filed the Texas v. United States suit in a federal court in Texas.

The plaintiffs have argued that, now that the ACA individual mandate penalty has been set to zero, the provision is now clearly an unconstitutional requirement that people buy a commercial insurance product, not simply a tax. They say that, because ACA supporters have argued in the past that the individual mandate is integral to the rest of the ACA, a court ruling killing the individual mandate should kill all of the ACA.

States like California are opposing the plaintiffs' arguments.

Lawyers from the U.S. Department of Justice have argued, on behalf of the administration of President Donald Trump, that the court should let the ACA individual mandate and some related provisions, such as the ACA medical underwriting restrictions, die, but separate those parts of the ACA from the other parts of the law, and let the result of the ACA live.

Anthony Shelley

Shelley is a member in the Washington office of Miller & Chevalier Chartered. He has been the lead counsel in many cases at the U.S. Courts of Appeals and has also argued before the U.S. Supreme Court, according to his firm biography.

The federal district court in Texas will probably rule on the Texas v. United States suit by Jan. 1, 2019, Shelley predicted.

The case is likely to head to the U.S. Supreme Court, Shelley said.

Shelley said that, if ACA supporters lose, states that like the ACA would still have the authority to enact and enforce similar state requirements.

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