Reflections on the week

Wow what a week this has been. Congress repealed three Affordable Care Act taxes that raised or promised to raise the cost curve -- the medical device tax, the health insurer tax, and the high cost employer plan (or Cadillac) tax.

The FEHBlog has read pieces bemoaning the loss of tax revenue. The only one of these taxes to generate revenue was the health insurer tax which only served to increase health insurance premiums often subsidized by the government. The medical device tax appeared as if it never would be implemented while the Rube Goldbergesque Cadillac tax has been delayed twice If the Cadillac tax had taken effect it would have driven employers out of healthcare, which may have been the ACA's objective. The Trump Administration has created a life raft for employers in such circumstances by creating individual coverage health reimbursement accounts.

The Fifth Circuit's decision in Azar v. Texas has ruffled feathers. The FEHBlog dearly hoped that the Supreme Court would strike down the Affordable Care Act in 2012 and then again in 2015. The FEHBlog is not a fan of massive legislation like the ACA that's enacted by only one party. He thought that if the Supreme Court struck down the law the Republicans who controlled the House at the time would work with the Democrats to create a more sensible law. The Supreme Court did not cooperate and in retrospect that's OK because the Republicans were not able to repeal and replace the ACA when they controlled the House and the Senate in 2017.  The FEHBlog does not want to see the courts take a pick axe to the ACA. He would like see Congress make changes and that has been happening.

The FEHBlog does not consider the Fifth Circuit's decision to strike down the individual shared responsibility provision to be a big deal standing alone because the provision had become a nullity since Congress zeroed out the individual shared responsibility penalty at the beginning of this year. As the FEHBlog has pointed out, the FEHBP ran smoothy without a coverage mandate and with a ban on preexisting condition limitations since its inception in 1960. CMS reported today that exchange enrollment has been stable in 2017, 2018, and 2019. Meanwhile the Trump Administration has created new coverage options like the short term plans and it sought to help build exchange enrollment with the individual coverage HRAs.

About a year ago, the FEHBlog was impressed by this academic analysis of the Azar case. The upshot was that removing the individual mandate straightens the constitutionality of the entire law.

The Fifth Circuit'also decided to remand the case to the lower court for reconsideration of the impact of striking the individual mandate on the remainder of the statute. The FEHBlog ran across a 2011 federal court decision from Virgoan holding the ACA's individual mandate unconstitutional whole preserving the remainder of the statute. That's the proper outcome here and the FEHBlog is confident that we eventually will get there.