Wednesday, March 18, 2020

The ACA wars through a pandemic lens: Nicholas Bagley looks back

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I spoke to Nicholas Bagley, health law professor at the University of Michigan, about measures to limit Americans' out-of-pocket exposure for coronavirus treatment -- assuming that in the U.S., simply covering all OOP for everyone treated for the disease at government-set payment rates to providers is not going to happen.

My thought was that Bagley could speak to avoiding legal pitfalls in any such measures. But his sense is that in the current crisis, legal concerns pertain mainly to potential administrative actions  (for example,  Can the CDC Pay for Everyone's Coronavirus Testing?).

Given normal U.S. legislative sclerosis, seeking regulatory authority to do what needs to be done is often fertile ground for legal analysis. Right now, though, the cards may line up for decisive legislative action, as they do in this country when (and only when) Republican political survival depends on it. And while there are multiple constraints to regulatory action, "there are fairly few constraints on Congress's legislative power," Bagley said. "Congress doesn't quite have carte blanche, but close to it. The question is not what does the Constitution allow Congress to do. We should be asking, 'what do we think ought to happen?' And then we should do it."

What about legal challenges? "Suits are harder to gin up than you might think," Bagley said. "In the current environment, it's a rare court that will move to stop initiatives to cope with the coronavirus. It's almost unfathomable to me that a court would come in and say, 'these measures are not required by the public health,' or are for some other reason barred by the Constitution. Arguments like "the Constitution might not allow you to lock down a city" are, I think a misreading of Constitutional law, and bespeak a complete lack of focus on the scope of the crisis we're confronting today."

Well, ah, um, what about the Affordable Care Act, I wondered? See: legal challenges to the individual mandate. To the federal government's authority to credit subsidies through the federal exchange. To the mandate, again, once the financial penalty was zeroed out. To reimbursing insurers for Cost Sharing Reduction as the law commands. To enforcing the contraception mandate.

That's where the conversation got interesting. Glance backward from where we are now, and the legal landscape has changed.

"One place where the conversation has shifted beyond the point of meaningful debate is in the big Affordable Care Act lawsuit.* The notion that you were going to rip the ACA out of the U.S. healthcare system was difficult to swallow before the pandemic, but it is almost unthinkable afterward."

That remains true, Bagley said, even if a liberal justice dies or is incapacitated and replaced by a right-wing Trump pick. "The notion that the courts ought to be responsible for withdrawing insurance from tens of millions of people after we've gone through what we're about to go through....that looks ridiculous, and the ridiculousness of a legal position in a novel constitutional case absolutely matters. I think the Texas suit was very unlikely to prevail before this pandemic hit. It's much harder to see it going anywhere now."

I suggested that a conservative majority might save conservative face by declaring the individual mandate unconstitutional, but the entirety of the rest of the law "severable" from it.

"Sure," Bagley agreed. "If you want to say something stupid about a meaningless provision, be my guest." But even before the pandemic, Bagley suggested, it was highly unlikely that the justices would uphold the suit.

"The only people who are defending this lawsuit are way down the partisan rabbit hole, Bagley added. "I think this pandemic exposes how far out of touch with the needs of the public this conversation has become."

That coronavirus-tinged retrospective extends back behind Texas v. U.S. "So much of the conservative legal movement, so many of these attacks on the Affordable Care Act look like a lawyer's game. Like a parlor trick that you pull together to achieve your broader libertarian goals -- as if there were no consequences to these lawsuits, as if they were just interesting thought experiments."

Will that perspective be permanent? Maybe not. "I've done a fair amount of work on pandemics in the past, and one thing that is pretty striking is how quickly people forget," Bagley said. "I'll be curious what snaps back to normal after this and what doesn't."

And the best way to protect Americans from coronavirus treatment costs? Cap everyone's maximum out-of-pocket expense, and use reinsurance to reimburse insurers for covering costs beyond what their plans stipulate? Structure OOP relief more like the ACA's Cost Sharing Reduction, reimbursing insurers directly for the extra benefit?  Again, Bagley suggested that Congress can do what they determine will work best. Those are questions for policymakers, I hope to address further here.


*Texas v. U.S., is a suit brought by Republican attorneys general, arguing that when the Republican Congress zeroed out the "individual mandate" tax penalty for those who remain uninsured, they rendered the mandate unconstitutional. The Trump administration argues further that if the mandate is found unconstitutional, the entire ACA must be voided. Incredibly, this ridiculous argument has reached the Supreme Court.

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