Judge's Obamacare ruling creates long-term uncertainty

In the short term, it's status quo.

For the long term, U.S. District Judge Reed O'Connor's ruling late Friday invalidating the Affordable Care Act has plunged the industry into an era of uncertainty yet again.

Although the Trump administration pledged over the weekend to enforce the law as Democrats and Republicans take their battle over the ACA's future to federal appeals courts, the prospect of dramatic upheaval looms large. President Barack Obama's healthcare law expanded health coverage to millions of Americans, pushed Medicare toward value-based payment, boosted public health funding and established innovation waivers.

"In the absence of the statute, the regulations would be invalid," said Timothy Jost, an emeritus professor of law at Washington and Lee University and ACA supporter. "That creates a real problem for Medicare and how providers and Medicare Advantage plans get paid. And the Food and Drug Administration approval of biosimilars—could those be forced to be pulled from the market?"

O'Connor's decision rested on the inability to excise the individual mandate from the Affordable Care Act, the zeroing out of the provision's financial penalty, and Supreme Court precedent that the law is a tax rather than regulation of commerce.

"Perhaps it is impossible to know which minor provisions Congress would have passed absent the individual mandate," O'Connor wrote in his 55-page decision. "But the level of legislative guesswork entailed in reconstructing the ACA's innumerable trade-offs without the one feature Congress called 'essential' is plainly beyond the judicial power."

It's a scenario that's become all too familiar during the ACA's eight-year existence.

"We've been through these twists and turns and that makes it impossible to do our business in a coherent fashion," said Ceci Connolly, president and CEO of the Alliance of Community Health Plans.

The Supreme Court weighed in on challenges to key ACA provisions in 2012 and again in 2015. The nation waited anxiously for the rulings which ultimately reaffirmed the law's standing. For much of 2017, insurers dealt with a series of reversals from the Trump administration on pledges to fund cost-sharing reduction payments. Also last year, the nail-biting repeal-and-replace debate unfolded in real time leading to Sen. John McCain's now-famous thumbs-down vote.

At least for now, industry groups are focused on what happens next with Texas v. Azar. A coalition of 17 Democratic attorneys general who are defending the law plan to appeal to the 5th U.S. Circuit Court of Appeals, where 12 of the 17 judges were appointed by Republican presidents, including five by President Donald Trump. The Democratic attorneys general are expected to ask for an immediate stay of O'Connor's ruling.

"I think this will be overturned on appeal," Sen. Susan Collins (R-Maine), said Sunday on CNN's "State of the Union."

But O'Connor has asked the attorneys general to set a briefing schedule for the remaining claims of the case, which also challenge whether the ACA violates the Constitution and an injunction to prevent the federal government from enforcing Obamacare. That may stand in the way of Democrats immediately appealing to the 5th Circuit.

Ashley Thompson, senior vice president of public policy and analysis development at the American Hospital Association, agreed and said it was too soon for members to start planning for a world without the ACA, noting the Trump administration's promise to keep the law intact until the courts have their say.

Alliance of Community Health Plans members aren't engaging in detailed contingency planning yet either, Connolly said. Instead, their focus will be on educating members of Congress on the law's impact and advocating for ways to codify key elements, including protections for pre-existing conditions. She said the association will also weigh the need to file an amicus brief as the appeal moves forward.