Brady McCombs reported that as they gather at a conference in Utah, governors from around the U.S. are starting to think about what they will do if an appeals court upholds a lower court ruling overturning former President Barack Obama’s signature health care law, the Affordable Care Act or Obamacare.

More than 20 million Americans would be at risk of losing their health insurance if the 5th U.S. Circuit Court of Appeals agrees with a Texas-based federal judge who declared the Affordable Care Act unconstitutional last December because Congress had eliminated an unpopular tax is imposed on people who did not buy insurance.

The final word on striking down the law will almost certainly come from the Supreme Court, which has twice upheld the 2010 legislation.

Nevada Gov. Steve Sisolak, a Democrat, signed a bill earlier this year prohibiting health insurers from denying coverage to patients due to pre-existing conditions, a pre-emptive move in case the Affordable Care Act was struck down.

He said this week in Salt Lake City at the summer meeting of the National Governors Association that he would ask his recently created patient protection commission to come up with recommendations for how to ensure patients don’t lose coverage if the law is overturned, which would impact about 200,000 people enrolled in Medicaid expansion in Nevada.

“To rip that away from them would be devastating to a lot of families,” Sisolak said.

Nevada is among a coalition of 20 Democratic-leaning states led by California that appealed the lower court ruling and is urging the appeals court to keep the law intact.

At a news conference Thursday, Democrats touted the protections they’ve passed to prevent people from losing health coverage.

New Mexico Gov. Michelle Lujan Grisham signed laws this year that enshrine provisions of the Affordable Care Act into state law, including guarantees to insurance coverage for patients with pre-existing conditions and access to contraception without cost-sharing. She said half of the state’s residents use Medicaid, prompting New Mexico officials to research creating a state-based health care system.

California Gov. Gavin Newsom said his state is already deep in contingency planning because five million people could lose health insurance if the law is struck down and the state doesn’t have enough money to make up for the loss of federal funds. He said the decision this year to tax people who don’t have health insurance, a revival of the so-called individual mandate stripped from Obama’s model, was the first step. That tax will help pay for an expansion of the state’s Medicaid program, the joint state, and federal health insurance program for the poor and disabled.

Newsom said the state is looking at Massachusetts’ state-run health care program and investigating if a single-payer model would work as possible options if the law were spiked.

“The magnitude is jaw-dropping,” Newsom said. “You can’t sit back passively and react to it.”

Arkansas Gov. Asa Hutchinson, a Republican, said states need Congress to be ready to quickly pass a new health care plan if the court overturns Obama’s law since doing so would cut off federal funding for Medicaid expansion.

A court decision in March blocked Arkansas from enforcing work requirements for its Medicaid expansion program, which has generated seemingly annual debate in that state’s Legislature about whether to continue the program.

“Congress can’t just leave that out there hanging,” Hutchinson said.

The 2018 lawsuit that triggered the latest legal battle over the Affordable Care Act was filed by a coalition of 18 Republican-leaning states including Arkansas, Arizona, and Utah.

Arizona Gov. Doug Ducey, a Republican, said he wants to see how the court rules before he makes any decisions about how his state would deal with the loss of Medicaid funds but that Arizona has backup funds available.

“They’re going to rule how they’re going to rule and we’ll deal with the outcome,” Ducey said. “The best plans are to have dollars available.”

It is unknown when the three-judge panel will rule.

The government said in March that 11.4 million people signed up for health care via provisions of the Affordable Care Act during open enrollment season, a dip of about 300,000 from last year.

Utah Gov. Gary Herbert, a Republican, said if the law is overturned, it would provide a perfect opportunity for Congress to try to craft a better program with support from both political parties.

He said his state, which rolled out its partial Medicaid expansion in April, probably will not start working on a contingency plan for people who would lose coverage until the appeals court rules.

“It’s been talked about for so long, people are saying ‘Why to worry about it until it happens?'” Herbert said. “I think there’s a little bit more of a lackadaisical thought process going on.”

President Donald Trump, who never produced a health insurance plan to replace Obama’s health care plan, is now promising one after the elections.

Newsom warned Americans not to rely on that.

“God knows they have no capacity to deal with that,” Newsom said. “The consequences would be profound and pronounced.”

Appeals Court Judges Appear Skeptical About ACA’s Future

Alicia Ault noted that if its line of questioning serves as a barometer, a three-judge panel of the US Fifth Circuit Court of Appeals here seemed to be more favorably inclined toward the arguments of a group of 18 Republican states and two individuals seeking to invalidate the Affordable Care Act (ACA) than to those bent on defending the law.

“I think the plaintiffs had a better day than the defendants,” Josh Blackman, an associate professor of law at the South Texas College of Law, Houston, told Medscape Medical News.

“I think they found that the plaintiffs had standing,” said Blackman, who attended the arguments. The judges also seemed to believe the plaintiffs have been injured by the ACA, and that the individual mandate still demanded that people buy health insurance, even though Congress has eliminated the penalty, he said.

“Short news is it went very badly,” said Ian Millhiser, a senior fellow at the liberal-leaning Center for American Progress, on Twitter, after attending the hearing.

“The two Republican judges appear determined to strike Obamacare,” he said, adding, “There is a chance they will be too embarrassed to do so, but don’t bet on it.”

At the outset, Judge Jennifer Walker Elrod asked Samuel Siegel, a lawyer with the California Department of Justice representing the 20 states and Washington, DC, who are defending the ACA, “If you no longer have the tax, why isn’t [the ACA] unconstitutional?”

Only two of the three judges on the panel asked questions during the 1-hour-and-46-minute hearing — Elrod, appointed by President George W. Bush in 2007, and Kurt Engelhardt, appointed by President Donald J. Trump in 2018. Carolyn Dineen King, appointed by President Jimmy Carter in 1979, did not ask a single question.

The defendants — led by California — were first to argue. They were given 45 minutes to make their case that District Court Judge Reed O’Connor in Texas had erred in December when he ruled that the ACA should be struck down because Congress had eliminated the penalty associated with the requirement that individuals buy health insurance.

Essentially, said Judge O’Connor, the mandate could not be severed from the rest of the ACA. O’Connor did not grant the plaintiffs’ request that the ACA be halted while the case made its way through the courts.

The plaintiffs — led by Texas Solicitor General Kyle Hawkins — also had 45 minutes before the appellate court judges.

Is the ACA Now a “Three-Legged Stool?”

Both Judges Elrod and Engelhardt interrupted Siegel several times while arguing for the ACA to ask him to explain why California and the other states had the standing to defend the federal law. Siegel said that if the law were to be struck down it would cost the defendants hundreds of billions of dollars.

The two judges seemed intent on getting both sides to explain why Congress would have eliminated the penalty that went along with the individual mandate but left the rest of the law standing. The plaintiffs contend that the law could not be severed into parts, that it lived or died with the mandate and its penalty.

When asked to assess congressional intent, Hawkins said, “I’m not in the position to psychoanalyze Congress.” But he said the US Supreme Court had already settled the question, ruling in King v Burwell that the ACA was like a three-legged stool without the penalty. And, he said, even without the penalty, the individual mandate remained part of the law, which he called “a command to buy insurance.”

Douglas Letter, the general counsel to the US House of Representatives, arguing in defense of the ACA, said the opposite: that the Supreme Court had determined in NFIB v Sebelius that the ACA presented a choice of buying health insurance or facing a penalty. Without the penalty, “The choice is still there,” said Letter, adding that individuals could choose to maintain insurance or not.

“We know definitively that ‘shall’ in this provision does not mean must,” Letter said.

Engelhardt disagreed and said that Congress perhaps should have revised the ACA after the penalty was removed. He also asked Letter why the Senate was not also a party to the defense of the ACA. “They’re sort of the 800-pound gorilla not in the room,” Engelhardt said.

What’s Next?

The judges are not expected to rule for several months and will be addressing several issues, including whether the Democratic states and the House of Representatives have proper standing to defend the law and whether the plaintiffs have the standing to challenge the law.

They also will address whether the individual mandate is still constitutional, and if the mandate is ruled unconstitutional, whether it can be severed from the rest of the ACA, or, on the other hand, whether other provisions of the ACA also must be invalidated, according to the Kaiser Family Foundation.

The court could dismiss the appeal and vacate O’Connor’s judgment, “in which case there wouldn’t be any decision in the case at all,” Timothy S. Jost, professor emeritus at the Washington and Lee University School of Law in Lexington, Virginia, told Medscape Medical News ahead of today’s hearing.

At the hearing, Texas’ Hawkins said it was wrong to say the plaintiffs were trying to strike the law. “There’s an erasure fallacy,” he told the judges. “We’re not asking the court to erase anything.”

Still, O’Connor did say in his ruling that the ACA was unconstitutional. The Trump administration announced in March that it would not defend the law, but said it would continue to enforce the ACA. August E. Flentje, a US Department of Justice lawyer, reiterated that position at the Fifth District hearing today.

But, in a briefing before the hearing, the administration argued that, if ultimately the law is ruled unconstitutional, it should only be struck down in the states seeking to overturn the law. Any ultimate judgment “should not declare a provision unlawful if it doesn’t impact the plaintiff,” Flentje said.

Douglas Letter, for the defendants, was agog. “The DOJ position makes no sense,” he said, noting, for instance, that that would mean that the US Food and Drug Administration — which is required to speed biosimilar drugs to market under the ACA — would approve drugs in California, but not Arizona.

Elrod pressed the point by asking Flentje, “What is the government planning to do?” if the ACA is halted.

“A lot of this has to get sorted out — it’s complicated,” he said.

Despite the outcome of today’s hearings, the case is still ultimately expected to go before the Supreme Court again, according to multiple legal experts.

Advocates: The Stakes Are Astronomical

Shortly after the hearing ended, California Attorney General Xavier Becerra issued a statement predicting disaster for American healthcare if the appeals court agrees that the ACA is unconstitutional. If that happens, “Millions of Americans could be forced to delay, skip, or forego potentially life-saving healthcare,” he said.

“Our state coalition made it clear: on top of risking lives, gutting the law would sow chaos in our entire healthcare system,” Becerra said, vowing to “fight the Trump administration tooth and nail.”

Physicians, consumer and patient advocates, and healthcare groups have voiced their support of the law through friend-of-the-court briefs, starting in June 2018, when the American Medical Association, the American College of Physicians, the American Academy of Family Physicians, the American Academy of Pediatrics, and the American Academy of Child and Adolescent Psychiatry joined together in a brief.

Other organizations have also voiced their support for the ACA through amicus briefs, including: the American Hospital Association, the Federation of American Hospitals, the Catholic Health Association of the United States, the Association of American Medical Colleges, Americas Health Insurance Plans, the Disability Rights Education and Defense Fund, the Blue Cross Blue Shield Association, Families USA, AARP, the Children’s Partnership, 483 federally recognized tribal nations, and 35 cities, counties, and towns.

A coalition led by the American Cancer Society, and including the American Diabetes Association, the American Heart Association, the American Lung Association, the Crohn’s & Colitis Foundation, the Cystic Fibrosis Foundation, the Epilepsy Foundation, the Hemophilia Federation of America, the Leukemia & Lymphoma Society, the March of Dimes, the National Alliance on Mental Illness, the National Coalition for Cancer Survivorship, the National Hemophilia Foundation, the National Multiple Sclerosis Society, and The Kennedy Forum also filed an amicus brief and issued a joint statement ahead of the hearing.

“If allowed to stand, the lower court’s ruling would once again mean people could be charged more or denied coverage based on their health history,” said the statement. “Insurance plans could impose arbitrary annual and lifetime limits on patients’ coverage and could exclude whole categories of care — like prescription drugs — from their plans,” they said, adding that striking the law from the books would jeopardize tax credits used by 8 million Americans to buy health insurance on the individual market.

Millions more could be dropped from Medicaid, the coalition stated. In total, the groups said that some 27 million people could lose health insurance — a figure they said was calculated by the Congressional Budget Office.

The Kaiser Family Foundation estimated that 19 million people could lose insurance. Also at stake: requiring private insurance, Medicare, and Medicaid expansion coverage of preventive services with no cost-sharing, and a phase-out of the Medicare prescription drug “doughnut hole” coverage gap.

“All of these provisions could be overturned if the trial court’s decision is upheld, and it would be enormously complex to disentangle them from the overall health care system,” Kaiser said.

The Urban Institute estimated that if the ACA were overturned, the number of uninsured would increase by 65% — 20 million people; state spending on Medicaid/Children’s Health Insurance Program (CHIP) would fall by $9.6 billion — and that uncompensated care would rise by $50.2 billion, an increase of 82%.

Health Insurance for All: Learning From San Francisco

This last article is an interview with Dr. George Lundberg and the San Francisco healthcare insurance. Hello and welcome. I’m Dr. George Lundberg and this is At Large at Medscape.

You can pay me now or you can pay me later. Perhaps best known as a commercial promoting automobile maintenance, this statement could also apply to healthcare.

Everybody gets sick. If left alone, most acute human maladies fix themselves (automobiles don’t), but people with chronic diseases do better if managed sensibly, including with professional help. Some serious illnesses are fully preventable. The effects of many potentially serious diseases can be ameliorated by early diagnosis and intervention.

Who pays? In whose best interest is it for payment to be assured?

Medical expense insurance in the United States began in Dallas, Texas, in 1929 and Sacramento, California, in 1932. Hospitals needed to be paid; surgeons were particularly motivated early on to assure not only that patients who needed surgery would get it, but also that the surgeons would get paid. Surgical fees often exceeded more typical fees for medical care, so out-of-pocket costs (the normal way doctors and hospitals were paid back then) were more difficult for many patients to afford. Usual medical care did not cost much, but then again, neither did it offer much.

Growing up in small-town, lower Alabama in the 1930s and ’40s, I did not know anyone who had medical expense insurance. Oddly, many people had burial insurance, which was aggressively marketed and sold.

Once medical (health) insurance became common, medical services (and costs) increased and then flourished—an early example of supply-induced demand. Of course, there were benefits for many.

The enactment of Medicare and Medicaid legislation poured gasoline on the already upward-spiraling healthcare cost fire. That is how we arrived at nearly 20% of the US annual gross domestic product going to healthcare.

Our American Medical Association actually warned the country about that risk.^[1] The incipient medical-industrial complex developed an insatiable capacity to transfer money by greatly increasing costs, often to gain small, incremental improvements.

Yet, lifesaving medical and surgical interventions do occur, they are often expensive, and someone has to pay for them. Ergo, health insurance. Everyone should have it. Why not?

I live in Silicon Valley. Many of the key innovations that have revolutionized how the world functions day by day have been begun and are headquartered here. Think Google, Apple, Facebook, Airbnb, Uber, Twitter, YouTube, Salesforce, Oracle, Intel, Cisco, Netflix, etc.

So why would it not make sense for San Francisco to pioneer healthcare for all via innovation?

Residents of San Francisco are expected to have health insurance coverage via employment-based insurance, Medicare, the Affordable Care Act (ACA), and Medi-Cal, if eligible, just like all other Americans, with all the pluses and minuses of those programs. But if they don’t, Healthy San Francisco is available regardless of immigration status, employment status, or preexisting medical conditions.

The 2008 Health Care Security Ordinance created the authority that underpins the Healthy San Francisco program. It requires businesses to pay a minimum set amount of money on healthcare benefits for their employees.

Restaurant users learn of this expense of doing business by seeing the note, “In response to employer mandates, including the San Francisco Health Care Security Ordinance, a 4% surcharge will be added to all food and beverage sales.”

Healthy San Francisco is administered by the San Francisco Department of Public Health and delivered via designated Medical Homes. Eligible annual income is set at 500% of the federal poverty limit.

Health insurance is not, a panacea it is not. It is a safety net below the other safety nets. By July 2010, 50,000 people had enrolled, but by 2019, that number declined to about 14,000. The drop probably represents both low unemployment and the success of California’s robust implementation of the ACA via Covered California.

Any other city or county in the United States that would like to provide economic access to basic medical care for its people, without such care being forgone, termed charity, or simply written off as bad debt by providers, could do well by learning from San Francisco’s experience.

Read through the last few paragraphs, especially as we consider elimination, i.e. the uncertain future of the ACA and the possibility of Medicare for All. Also, as I have pointed out in the past few weeks as I have discussed the history of Medicare and Medicaid remember the inability of the administration to accurately predict the true costs. The following addition to the discussion on Medicare and Medicaid will further emphasize the huge costs and expenses of the programs. The next question would be how would the additional up-ward healthcare spiraling costs/expenses be paid for.

Back to our Medicare and Medicaid discussion:

Remember as I just mentioned, that last week I discussed the underestimation of the Medicare program and even more increases which occurred in the Medicaid program. Remember also that because of the wording of Title XIX where the federal government had an open-ended obligation to help underwrite the costs of medical care for the wide range of services to such a large number of recipients, which made it very difficult to accurately predict the ultimate cost.

Then in 1965, the House Ways and Means Committee had estimated that if all of the states were to take advantage of the Medicaid program, including all of the services, that the additional federal costs of medical assistance would amount to $238,000,000. However, in the fiscal year 1967, the total cost of Medicaid payments amounted to $1,944,000,000. Realize that half of these payments were federal funds and realize that the program was operating in only twenty-eight states. Also, interestingly even with the decline in usage and expenditures of other programs by the end of the year 1968 forty-one states had opted into the Medicaid program the total expenditures amounted to $3,783,000,000. Compare this to the total federal outlays for all medical assistance programs in the fiscal year 1965, prior to the introduction of Medicare and Medicaid, amounted to $1,239,000,000.

The goal of the House and Ways Committee when they met in 1971 discussed the need to contain the spiraling costs of Medicare and Medicaid. Members of the individuals testifying were members of the Nixon administration who suggested a whole series of cost-control measures, among them that the new legislation promote a system of capitation payments to health maintenance organizations (HMOs) and that Medicaid introduces cost-sharing while Medicare expands its own cost-sharing policies. Interestingly many of these cost-saving recommendations eventually found their way into the final bill to reform these programs, which became law in October1972.

So, among these changes to the Medicare program was:

• The inclusion of the totally disabled as eligible for Medicare benefits. Workers of any age and widows and disabled dependent widowers over the age of fifty were eligible to receive Medicare benefits after having received APTD (Aid to Permanently and Totally Disabled) assistance for twenty-four months. This added approximately 1,700,000 beneficiaries to Medicare rolls and was the first instance of any group under the age of sixty-five being made eligible benefits;
• Beneficiaries of Part B (Supplementary Medical Insurance) who otherwise were ineligible for Part A (Hospital Insurance) by virtue of not qualifying for Social Security coverage could now voluntarily enroll in Part A by paying a monthly premium;
• Provision was made for capitation payments to HMOs and certain limits were placed on the items that a health care facility could include in calculating its cost.

However, the most significant change in the Medicare program contained in the 1972 amendments was the repeal of a provision contained in the original legislation that made it mandatory that each state expands its Medicaid program each year until it offered comprehensive coverage for all the medically needy by 1977. Remember that when Medicare and Medicaid were first introduced, Congress had hoped to establish a universal hospital and medical insurance scheme for the needy using Medicaid as its foundation but largely as a result of the swelling costs of the program this design was abandoned in1972.

So, let’s see how this week’s set of debates evolve as the candidates make more promises for the answer to the health care problem. How will Kamala Harris pay for her health care system and will private insurance be a thing of the past?