Invalidating the ACA Would Eliminate Health Insurance for 20M People

Urban Institute study finds low-income, working people in Medicaid expansion states would be hardest hit.

More than 20 million nonelderly people will find themselves uninsured if an appellate court invalidates the Affordable Care Act, according to a new study from Urban Institute.

Most of those losing coverage would be young adults, or from lower-income, working families earning below 200% of the federal poverty level, or $12,490, for one person. Most of those people had gained coverage through the Medicaid expansion, which would be nullified if a federal appeals court sides with the 18 plaintiff Republican states in Texas v. United States, the study found.  

Invalidating the ACA would also bump the nonelderly uninsured rate from its current 11% to 18%, with a total of 50.3 million people uninsured nationwide, the study said.

"Eliminating the ACA would be a major step backward for the millions of people who gained affordable healthcare coverage this decade," John Holahan, Institute Fellow at the Urban Institute, said in a media release. "Without access to the ACA's health and financial benefits, more low- and middle-income people would face higher financial burdens and less access to necessary medical care."

U.S. District Judge Reed O'Connor last December declared the entire ACA invalid, as the plaintiff states had requested. The ruling was appealed to the 5th U.S. Circuit Court of Appeals by a California-led 21-state coalition. Oral arguments are scheduled for July 9 in New Orleans. 

The plaintiff states in Texas v. United States, led by Texas Republican Attorney General Ken Paxton, say the ACA was invalidated in its entirety when Congress eliminated the law's individual mandate, which they claimed was inseverable.

Led by California Democratic Attorney General Xavier Becerra, the intervening states say the Texas-led plaintiffs have no standing to challenge the individual mandate, because no plaintiffs were injured by the provision when Congress eliminated the tax penalty for failing to buy insurance.

Even if the lower court's ruling on the unconstitutionality of the individual mandate is upheld, the intervening AGs argue that the provision could still be cut from the ACA because Congress kept every other provision of the act when it cut the tax to zero.

Becerra's spokesperson, Sarah Lovenheim, said the Urban Institute report offers more evidence that eliminating the ACA "would wreak havoc on our entire American healthcare system, risking lives in every state."

"The Trump Administration claims it cares about the health and wellbeing of our families but all we have seen is repeal without replace," she said. "More than 133 million Americans with preexisting conditions rely on the ACA for access to affordable care and coverage, regardless of their background."

According to the Urban Institute study, eliminating the ACA would:

• Increase the number of uninsured by 92% across the 34 states that expanded Medicaid, and 38% in non-expansion states.
   
• Increase the number of uninsured by 71% among people with incomes under 138% of the federal poverty level, (annual income less than $16,753 for one adult), and 72% among those with incomes between 138% and 200% of FPL (annual income between $16,753 and $24,280 for one adult).
   
• Increase the number of uninsured by 9.4 million non-Hispanic white people and 3.2 million black people.

Initially, the Trump Administration's DOJ offered a partial defense of the ACA before O'Connor, arguing that most of the sprawling healthcare legislation should remain intact, even if the ACA's individual mandate were to be struck down in light of Congress zeroing out its tax penalty.

O'Connor's ruling invalidating the ACA went much further than what DOJ had urged. Earlier this year, however, DOJ reversed course and notified the appeals court that it agrees with the plaintiffs' argument and O'Connor's ruling, and would entirely abandon its defense of the ACA.