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House Democrats Propose New Legislation to Bolster the ACA

On June 24, 2020, House Democrats proposed the Patient Protection and Affordable Care Enhancement Act (H.R. 1425) (the “Proposed Act”), legislation aimed at reinforcing the Affordable Care Act (the “ACA”) by: (i) lowering American’s health coverage costs; (ii) allowing Medicare to negotiate lower prescription drug prices; (iii) expanding coverage by incentivizing 14 holdout states to accept the ACA’s Medicaid expansion; (iv) expanding affordable coverage to vulnerable populations; (v) honing in on “junk” health plans that provide inadequate coverage; and (vi) strengthening protections for people with pre-existing health conditions. A fact sheet on the provisions of the Proposed Act is available here.

BACKGROUND REGARDING TEXAS V. UNITED STATES

Democrats have unveiled the Proposed Act in direct opposition to Republican-backed efforts to invalidate the ACA in Texas v. United States. As discussed in prior blog posts, a federal district court judge in Texas struck down the ACA because, in the judge’s view the ACA’s individual mandate, which was reduced to $0 by the Tax Cuts and Jobs Act of 2017, could no longer be considered a tax. Without the mandate, the argument goes, Congress is stripped of its constitutional authority to enforce the mandate. The judge held the entire ACA unconstitutional because, in his view, the individual mandate is inseverable from the rest of the ACA. Following the Fifth Circuit’s review, the U.S. Supreme Court has agreed to hear the case and is expected to begin listening to arguments as early as October, 2020.[i]

THE ACA AND COVID-19

Many House Democrats are motivated to enhance the ACA in light of the COVID-19 pandemic and have expressed outrage over efforts to repeal it at a time when access to health coverage is most needed. Representative Raul Ruiz (D-CA), stated, “I find it repulsive that during a global pandemic…the Trump administration is actively trying to tear down the Affordable Care Act.”[ii]

House Majority Leader Steny H. Hoyer (D-MD) highlighted the benefits of boosting the ACA by noting, “Since Democrats and President Obama enacted the ACA in 2010, over 20 million more Americans have gained health coverage, and costs have come down. The law’s Medicaid expansion provisions have been implemented in all but fourteen states, and more than four million additional Americans would be covered if those states expanded Medicaid.”[iii] ACA enrollment is likely to continue to increase given the spike in unemployment rates due to the COVID-19 pandemic. Hoyer argues that the health crisis should signal us to strengthen the ACA.

Moreover, House Democrats argue that the importance of the Proposed Act extends beyond health care. They argue that the fight for increased consumer protection and health insurance expansion through the Proposed Act is intertwined with the fight for financial security and racial equality, which are tied to the pandemic’s ensuing economic impact and its disproportionate effect on the black community.[iv]

In rebuttal, White House spokesperson Judd Deere called for a unified front, stating that, “Instead of diving back into partisan games, Democrats should continue to work with the president…ensuring our country emerges from this pandemic stronger than ever.” He further indicated that the pandemic does not change that the ACA is “an unlawful failure” that limits choice while forcing Americans to purchase health plans that are unaffordable.[v]

*****

While support of the Proposed Act, like most policy related to the ACA, is largely divided along party lines, it remains to be seen which on side the U.S. Supreme Court will land. Despite the court consisting of majority conservative justices, recent cases, such as NFIB v. Sebelius and Bostock v. Clayton County, Georgia,  have shown a willingness on the part of some conservative justices to vote with the literal minority. In the meantime, we will continue to monitor the Proposed Act’s progress through Congress.


FOOTNOTES

[i] Jeff Overley, “Dems Unveil ACA Booster Bill, Rip GOP’s High Court Case,” June 24, 2020

[ii] Id.

[iii] Press Release, “Hoyer Statement on the Patient Protection and Affordable Care Enhancement Act,” June 24, 2020

[iv] Jeff Overley, “Dems Unveil ACA Booster Bill, Rip GOP’s High Court Case,” June 24, 2020

[v] Ricardo Alonso-Zaldivar and Mark Sherman, “As COVID cases rise, White House seeks to scrap ‘Obamacare,’” Federal News Network.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 179

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About this Author

Samuel O'Brien Corporate Lawyer Sheppard Mullin
Associate

Samuel O'Brien is an associate in the Corporate Practice Group in the firm's Century City office and is a member of the firm’s Healthcare team.

424.288.5316
Melissa Gertler, Sheppard Mullin Law Firm, Corporate Law Attorney, Century City
Associate

Melissa Gertler is an associate in the Corporate Practice Group in the firm's Century City office.

424-288-5314
Associate

Hector M. Grajeda is an associate in the Corporate Practice Group in the firm's Century City office and is a member of the firm’s healthcare practice team. 

Areas of Practice

Hector advises clients on a variety of general corporate matters, including mergers and acquisitions, private placements, securities offerings and securities law compliance, entity formation, corporate governance and general contract negotiations.

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