U.S. Supreme Court Upholds the Affordable Care Act

Jun 22, 2021

On June 17, 2021, the Supreme Court of the United States (SCOTUS) issued its highly anticipated opinion in the latest review of a challenge to the constitutionality of the Patient Protection and Affordable Care Act (“ACA”), passed by Congress in 2010 (aka “Obamacare”). The Court held, 7-2, that the original petitioners (principally Texas and other states) did not have “standing” – basically that they did not show the court that they were injured by an allegedly unlawful act (the ACA’s individual mandate, with zero penalty since 2017 for non-compliance), and thus did not have a basis for bringing the case. Therefore, the ACA remains intact. 

What Does the Ruling Mean for Providing Healthcare to Patients?  

Had the Supreme Court struck down the ACA in its entirety or even partially, at least some health coverage created under the ACA would have been eliminated, reducing patient access to essential medications. Reinstatement of those coverage protections would have required Congressional action. Click here for AB’s statement on the decision.

General Data points:   

  • According to the Kaiser Family Foundations, nearly 20 million non-elderly Americans gained health insurance coverage since the ACA was enacted through 2016.  
  • Some 135 million Americans with preexisting conditions could face discrimination if they ever needed to turn to the individual market for health coverage (because of ACA repeal or legal overturn).  
  • States would lose $135 billion (see p.2) in federal funding for the marketplaces, Medicaid, and the Children’s Health Insurance Program (CHIP) without the ACA.  

Access to Prescription drugs:  

  • According to HHS, prior to the ACA, 9 percent of individual market plans did not cover prescription drugs. The ACA expanded drug coverage by requiring marketplace plans to “cover at least one drug in each drug class” and to count out-of-pocket drug expenses toward a beneficiary’s deductible. By expanding Medicaid eligibility as well as broadening the Medicaid Drug Rebate Program, the ACA gave more low-income Americans access to brand-name and generic drugs and lowered the costs for taxpayers.   
  • The ACA also expanded the 340B drug discount program to include more providers, including critical access hospitals and rural referral centers.  
  • The ACA also laid out a process for faster Food and Drug Administration approval of biosimilars, biologic drugs that are essentially analogous to generic versions of branded drugs. With the decision, the BPCIA (Biologics Price Competition and Innovation Act) and its biosimilars framework, remains untouched, a point highlighted in AB’s statement.  

What’s Next? 

At least one other major existing legal challenge to the ACA remains, and more could be filed, but this case was a major procedural disposition of perhaps the most controversial aspect of the ACA - the individual mandate - and most analysts and policymakers currently appear to believe that further attempts to overturn the ACA will not succeed.  

Going forward, yesterday’s ruling will likely spur the Biden Administration and Congressional Democrats to try to enhance, strengthen and expand ACA coverage, such as lowering the eligibility age and including dental, hearing and vision coverage in Medicare. Although the Biden Administration continues to take actions to encourage greater participation from the uninsured, many Americans still lack affordable health coverage. Capturing these individuals will improve healthcare outcomes and have a positive impact on the healthcare sector.  

Here are some statistics that illustrate the impact of the ACA, and the growth in the number of uninsured over the last few years, and thus the opportunities for increasing health insurance coverage:  According to the Kaiser Family Foundation (KFF), the number of uninsured in the nonelderly population fell by nearly 20 million in the first several years following enactment of the ACA in 2010, but beginning in 2017, the number in that category increased for three straight years, growing by 2.2 million from 26.7 million in 2016 to 28.9 million in 2019, and the uninsured rate increased from 10.0% in 2016 to 10.9% in 2019. KFF also listed the percentage of the overall population without health insurance in 2019 as 9.2%. The Biden Administration claims that 31 million people have coverage because of the ACA, with 11.3 million having purchased plans on the ACA exchange and 14.8 million having obtained coverage under the Act’s expansion of Medicaid.

AmerisourceBergen's Government Affairs and Policy will continue to educate policymakers about issues of importance to providing quality healthcare to patients.

If you have questions, please contact Tony Lee, Director of Public Policy.