On Wednesday, a Texas judge heard oral arguments in a case brought by state attorney generals against the Affordable Care Act (ACA). The suit aims to overturn the ACA in its entirety on the dubious grounds that since Congress has eliminated the penalty for not having insurance, a key provision of the act, it thereby invalidated the act as a whole.
The Department of Justice, which supports the lawsuit in part, wants to keep the ACA on the books but does seek elimination of one key provision – the guarantee that people will get full coverage for pre-existing conditions without paying higher premiums.
There is some cold economic rationality in linking the pre-existing conditions protection to the penalty for not having insurance. The problem with the pre-existing conditions proviso is that it invites adverse selection – healthy people will self-insure until they get sick, and only then sign up for a policy. Before the ACA, restrictions on coverage of pre-existing conditions were the way insurance companies fought back against adverse selection. The ACA, instead, chose to fight adverse selection with the penalty for not buying insurance. If you leave insurance companies entirely defenseless against adverse selection, their only recourse will be to withdraw from participation in the ACA altogether.
Economic rationality aside, though, attacking pre-existing conditions protection seems like political suicide. As a recent Kaiser Family Foundation tracking poll confirms, an overwhelming majority of Americans want to see these protections remain part of the law.
At least some Congressional Republicans recognize this. A group led by Sen. Thom Tillis (R-NC) has introduced a bill, the Ensuring Coverage for Patients with Pre-Existing Conditions Act, to make sure people who have asthma, high cholesterol, diabetes, or other such conditions can continue to buy insurance.
There is a catch, though. Larry Levitt, a Senior VP at KFF, argues in a series of tweets that the protections in the Tillis bill are illusory. People with pre-existing conditions could buy policies, but companies would not have to pay for treatments.
Fortunately, there is an election coming up. Voters, not courts, will get the last word.