Axios Vitals

A briefcase with a red cross on the front.

December 17, 2018

Good morning, all. Caitlin Owens and I are your Vitals co-hosts this week. And wouldn't you know it, the minute Sam Baker heads for vacation, everything hits the fan.

1 big thing: The ACA's new legal threat

Protester hold signs outside of the Supreme Court during an Affordable Care Act case.

Photo: Mark Wilson/Getty Images

Now that federal Judge Reed O'Connor has ruled the entire Affordable Care Act is unconstitutional — since Congress zeroed out the penalty tied to the mandate to buy health insurance — the health care law once again has to show it has an extra life in its back pocket.

The big picture: This time, the knives are coming out from all sides to defend the ACA. That's what makes it different from past legal challenges.

  • Democratic attorneys general, led by Xavier Becerra in California, have vowed to appeal.
  • Pretty much every trade group is befuddled by the decision. The American Medical Association called the ruling "a stunning display of judicial activism." (However, the Council for Affordable Health Coverage, a conservative group funded by dozens of major companies, viewed this as "an excellent opportunity.")
  • Legal experts who have opposed and supported the ACA almost uniformly agree the judge's legal rationale is flawed or "indefensible."
  • The biggest problem is the ruling ignores a well-established legal principle that courts should be cautious about striking down an entire law because of a problem with one piece of it. Law professors Jonathan Adler and Abbe Gluck wrote about this in the New York Times this weekend. (Adler supported the 2012 and 2015 legal challenges to the ACA.)

This case has caused internal trouble at the Department of Justice. I got in touch with Joel McElvain, one of the three career DOJ attorneys who withdrew from this case this summer when President Trump's DOJ said it wouldn't defend the law.

  • McElvain confirmed he resigned from the DOJ due to his objection to the agency's decision not to defend the ACA, but he declined to comment further on the case.

Our thought bubble: This further amplifies what a controversial ruling this is. Experts across the board are beyond dubious about the legal argument O'Connor and Republicans are making.

Looking ahead: An appeal would go to the Fifth Circuit Court of Appeals, which is considered one of the more conservative appeals courts. If the Fifth Circuit agrees with this latest ruling, it'd be up to the Supreme Court to decide if it wants to hear the case.

  • The next legal steps are somewhat messy, but it's expected Becerra will act quickly to start driving the appeals process.

The bottom line: We are still a long way from the Supreme Court intervening, and the ACA is still technically the law of the land while this plays out.

2. What's at stake

If O'Connor's ruling stands — or takes effect before an appeal — it would kick millions of people off of private insurance and millions more off of Medicaid, and would eliminate protections for people with pre-existing conditions.

But the ripple effects would go much further, as Sam notes from a land far away:

  • The ACA created the FDA approval pathway for a class of cheaper prescription drugs known as biosimilars. Patients are taking those drugs now, but without the ACA, the FDA would lose its legal power to approve them.
  • The ACA developed the database that shines light on payments that drug and device companies make to doctors. It reauthorized the Indian Health Service. It required calorie counts on some restaurant menus.
  • Even under the Trump administration, Medicare is relying on parts of the ACA, like the CMS Innovation Center, to shift the health care system toward new payment models.

Why it matters: None of that has much to do with the individual mandate, or even health insurance, but would vanish if the whole ACA goes away.

What they're not saying: HHS didn't answer questions about whether Secretary Alex Azar supported the judge's ruling and what he would do if the ACA were thrown out. The department instead referred to the White House statement that said "Obamacare has been struck down by a highly respected judge," and the administration expects "this ruling will be appealed to the Supreme Court."

3. The politics of the ACA ruling

Politically, this case pours gasoline on existing trends, Caitlin reports.

Between the lines: Democrats will make the case that they are the party that protects pre-existing conditions, while Republican messaging on the case — and more broadly, their health care platform — will be muddled at best.

  • While there may be some push to have solutions ready to go if the ACA ultimately gets struck down, the idea that a divided Congress is going to be able to agree on something like that is laughable.
  • Plus, “[Chief Justice] John Roberts isn't going to let his precious law get taken down over the mere inconvenience of the tax that wasn't a tax, but was ... and now isn't being collected," a senior GOP Senate aide told Caitlin.

4. Seniors' pre-existing conditions problem

Illustration of a broken orthopedic walker.

Illustration: Aïda Amer/Axios

There are probably a few seniors with pre-existing conditions, right? That's why it might surprise you to learn Medigap policies — the supplemental insurance for Medicare — don't cover them in a lot of cases, the Kaiser Family Foundation's Drew Altman points out in today's column.

Background: The problem wasn't addressed by the ACA because that was aimed at other parts of the health insurance market that didn’t have pre-existing conditions protections. Congress had already dealt with the issue for Medigap — but in a way that left huge holes.

  • Medigap insurers have to issue a policy without regard to pre-existing conditions for some narrowly defined circumstances. These include: during the first 6 months of enrolling in Medicare Part B at age 65 or older, after an employer terminates retiree coverage, and after a brief trial period in a Medicare Advantage plan.
  • Otherwise, Medigap insurers can and do deny applications from seniors with pre-existing conditions.

The bottom line: The problem is fixable, but there's a pretty big tradeoff: Premiums would go up.

Go deeper: Read the column.

5. Molina vs. Molina

Molina Healthcare ceased to be a family-owned company after the health insurer's board fired former CEO Mario Molina and his brother. And it looks like the rift isn't over.

Driving the news: Mario Molina bought some clinics from the insurer upon leaving, and the insurer doesn't intend to renew its contract with Molina's clinics early next year, the Los Angeles Times reports. The means 79,000 people who see Molina's doctors may have to pick new doctors soon.

  • "Giving patients 30 days' notice to find a new doctor during the holidays is like putting a lump of coal in a stocking and then lighting it on fire," a consumer advocate told the LA Times.

1 👀 quote: Molina told the LA Times that one board member, Ronna Romney, the mother of Trump supporter and Republican National Committee chairwoman Ronna Romney McDaniel, didn't like how Molina routinely criticized Republicans' efforts to repeal the ACA.

  • "Molina says Romney asked him several times to tone down his remarks and 'say something nice about Trump,'" the article said.

You made it to the end? Nice. It's still only Monday. Your reward is this essential clinical trial that studied parachute mortality. Feel free to email me other good satirical medical studies: [email protected].