June 08, 2018
Good morning … I won't pretend to be a bigger hockey fan than I am — which is to say, I've seen one hockey game in my life, and that was the minor league Lexington (Ky.) Thoroughblades. But I do truly love the District of Columbia, and for that reason ... #ALLCAPS.
1 big thing: DOJ says ACA is unconstitutional
The Justice Department said last night that the Affordable Care Act's individual mandate has become unconstitutional. Even more importantly, it says the law's most popular provision — guaranteed coverage for people with pre-existing conditions — also has to go.
Threat level: The legal challenge at issue here may be somewhat of a long shot on the merits. But if it does ultimately succeed, it could toss out the hardest-fought and most significant parts of the ACA.
Why it matters, norms edition: When people challenge a federal law in court, DOJ defends that federal law, almost every time.
- No, this is not the first time in history DOJ has done something like this. The Obama administration quit defending the federal ban on same-sex marriage. A thing does not need to be literally unprecedented to be a big deal, and this thing is a big deal.
Why it matters, health policy edition: We're used to having complex arguments about how this complex law would function without the individual mandate.
- But if insurers can simply deny sick people coverage again, then it's not a matter of how the health of the risk pool affects premiums. They can just be excluded from the market altogether — rolling back the ACA's most popular and foundational promise.
What's next: To be clear, DOJ has not won this argument. It has only made the argument. But its position carries weight in the courts, and this case will work its way up through conservative courts.
- It's being heard by a conservative judge, Reed O'Connor. His ruling will inevitably be appealed to the 5th Circuit Court of Appeals — the most conservative appeals court in the country. From there it would go to the Supreme Court.
- And there, it'd once again come down to two Republican-appointed justices: John Roberts and, if he's still on the court, Anthony Kennedy.
The politics: Democrats are already making the case that this plays right into their hands in the midterms. There's a logic to that — "Trump is trying to take away coverage for pre-existing conditions" is pretty a obvious hit.
- But even Democrats' best-case midterm scenarios have very little chance of affecting the outcome of this case. It's already in motion, and winning the House, or even the Senate, won't force the Trump administration to change this decision.
2. A refresher on the case's merits
If you haven’t been following this lawsuit, here’s what you need to know:
- The ACA's individual mandate requires most people to buy insurance or pay a tax penalty. The Supreme Court upheld that in 2012 as a valid use of Congress' taxing power.
- When Congress claimed it repealed the individual mandate last year, what it actually did was drop the tax penalty to $0.
- So the coverage requirement itself is still technically on the books.
- A group of Republican attorneys general, representing states led by Texas, say it's now unconstitutional — because the specific penalty the Supreme Court upheld is no longer in effect.
- That's the argument DOJ signed onto last night.
Key difference: The states say the whole law must fall along with the mandate. DOJ says it's just two provisions that have to go — requiring insurers to cover sick people, and preventing them from charging individuals a higher premium because of their pre-existing conditions.
The other side: A group of Democratic attorneys general has been granted permission to defend the ACA in this case, so it will have an ally in court — just not the federal government.
3. LePage still fighting Medicaid expansion
Maine Gov. Paul LePage will appeal a judge's order directing him to implement the state's Medicaid expansion, AP reports. He will not comply with that order in the meantime.
The bottom line: LePage is a firm opponent of Medicaid expansion and very little has ever held him back. He seems dead set on not doing this, the will of his constituents notwithstanding. If it's possible to make this drag on until a new governor is sworn in, expect LePage to make it happen.
4. White House releases anti-opioid ads
The Trump administration has released the TV ads it hopes will help discourage opioid abuse. All four spots focus on people who became addicted to prescription opioids and then harmed themselves (for example, one guy broke his hand with a hammer) to secure a new prescription.
- There is no mention of heroin or fentanyl, or of any other consequences (like overdose and death).
No public health experts I’ve talked to think an ad campaign will do much to stem the tide of the epidemic, though it probably won’t hurt, either.
5. The politics of stock buybacks
UnitedHealth Group's announcement this week that it's raising its dividend and increasing its stock buyback program was nothing unusual. But steering that cash to investors could still be used as a political cudgel, Axios' Bob Herman reports.
Driving the news: UnitedHealth expects to use $6 billion this year alone on dividends and buying back shares, some of which is due to the Republican tax overhaul.
- But the health insurance and services conglomerate also requested sizable premium rate increases in New York’s ACA marketplace and Rhode Island’s employer market.
Between the lines: Don’t be surprised if Democrats use this, along with similar moves from other health care companies, as grist in the midterms.
- “This is exactly the storyline Democrats will use to show the tax bill was a gift to corporate executives and wealthy shareholders at the expense of middle-class families,” a Senate Democratic aide said.
6. Speaking of UnitedHealth ...
The Star Tribune flagged an under-the-radar report from Moody’s Investors Service revealing that Optum, which is part of UnitedHealth, is one of the buyers in the $2.2 billion deal for a physician staffing firm owned by dialysis chain Fresenius.
Previously, Fresenius only disclosed private equity firm Summit Partners led an “investment consortium” for its physician group.
Flashback: Exactly one week ago, in this very newsletter, we told you how UnitedHealth was not done buying providers. And here we are.
Have a great weekend! Let me know what we should be watching next week: [email protected].