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Biden administration flips Trump-era legal stance on Obamacare

Adriana Belmonte
·Senior Editor
·4 min read

The Biden administration is reversing the executive branch’s position on the constitutionality of the Affordable Care Act (ACA), which is commonly known as Obamacare.

In a letter from the Justice Department to the Supreme Court, Deputy Solicitor General Edwin Kneedler stated that the U.S. “no longer adheres” to the conclusions in the brief previously filed by the Trump administration in the case currently being weighed by the nation’s highest court.

“After reconsideration of the issue, it is now the position of the United States that the amended Section 5000A is constitutional,” Kneedler wrote, referring to the ACA’s individual mandate. The mandate involves a fee paid by Americans who choose not to buy health insurance when they can afford it.

U.S. President-elect Joe Biden adjusts his face mask after during a brief news conference, where he discussed health care and the Affordable Care Act (Obamacare, at the theater serving as his transition headquarters in Wilmington, Delaware, U.S., November 10, 2020. REUTERS/Jonathan Ernst??
President Biden adjusts his face mask after during a brief news conference, where he discussed health care and Obamacare in Wilmington, Delaware, November 10, 2020. REUTERS/Jonathan Ernst

The fate of the ACA lies in the hands of the Supreme Court after a Texas judge, Reed O’Connor, ruled in December 2018 that the mandate was unconstitutional and consequently invalidated the rest of the health care legislation. Following an appeal, the Supreme Court heard arguments in November 2020.

President Trump made it part of his White House agenda to dismantle Obamacare and attempted to allow states to opt out of the ACA marketplaces during his last weeks in office.

Throughout his presidency, he insisted that the ACA was expensive and repeatedly vowed to come up with his own replacement health care bill.

“If we win, we will come up with a much — and we will do that — come up with a much better health care for much less money, always protecting people with preexisting conditions,” Trump told CBS News.

No replacement health care proposal emerged.

U.S. President Donald Trump smiles after signing an Executive Order to make it easier for Americans to buy bare-bone health insurance plans and circumvent Obamacare rules at the White House in Washington, U.S., October 12, 2017.  REUTERS/Kevin Lamarque
President Trump smiles after signing an Executive Order to make it easier for Americans to buy bare-bone health insurance plans and circumvent Obamacare rules at the White House, October 12, 2017. REUTERS/Kevin Lamarque

‘That provision is severable’

The Supreme Court case consolidates two cases of Texas v. California and California v. Texas.

The nine justices will decide whether the coalition of 18 states arguing against the ACA actually has a legal right (i.e., standing) to sue.

20210210151147983_19-840 19... by Aarthi

If the court finds that the law’s challengers have standing to sue, the court will then decide whether the individual mandate is constitutional and whether the ACA can survive without the mandate.

This isn’t the first time that the mandate has been argued in the Supreme Court either — in 2012, it was upheld because it was seen as a tax. (In 2017, President Trump’s tax bill lowered the tax penalty to zero, essentially eliminating the mandate.)

Kneedler noted in the letter that should the Supreme Court rule the individual mandate unconstitutional, “that provision is severable from the remainder of the ACA.”

Medicaid expansion states would be hit particularly hard. (Graphic: David Foster/Yahoo Finance)
Medicaid expansion states would be hit particularly hard. (Graphic: David Foster/Yahoo Finance)

Striking down all or part of the law could create a “huge mess,” Christen Linke Young, a health policy fellow at the Brookings Institution, told Yahoo Finance in September 2020, particularly with the country facing a major public health crisis.

More than 8 million people signed up for ACA coverage during Open Enrollment at the end of 2020. During the coronavirus pandemic, according to a report from the Centers for Medicare and Medicaid Services (CMS), the number of people who signed up for Obamacare just through a special enrollment period (SEP) was “higher for the 2020 coverage year than for any of the prior coverage years.”

Approximately 485,000 consumers gained coverage during that period, a whopping 52% increase year-over-year. The largest gain in SEP enrollment was in April 2020, which saw an 139% increase in enrollment year over year.

“Either way, the consequences are pretty severe,” Linke Young said. Even “striking down only the guaranteed issue and community rating components of the ACA would throw individual insurance markets into total chaos, and just be completely unworkable in the middle of a pandemic.”

Adriana is a reporter and editor covering politics and health care policy for Yahoo Finance. If you want to share your personal experience with Obamacare, email her at adriana@yahoofinance.com. Follow her on Twitter @adrianambells.

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