Arkansas has joined another federal lawsuit seeking an end to the Affordable Care Act, state Attorney General Leslie Rutledge announced late Monday afternoon.
“For too long the federal government has mandated Arkansas’s health care without regard for the medical care Arkansans desire or can afford,” Rutledge said in a press release. “It’s time for this act to be rightfully held unconstitutional so that Americans can again be free to select the health coverage best suited to their needs.”
If successful, the suit would eliminate Arkansas Works, the state’s Obamacare-funded version of Medicaid expansion, which provides private health insurance to about 285,000 low-income adults statewide. Governor Hutchinson is asking the state legislature to reauthorize Arkansas Works for the upcoming 2019 fiscal year, with a vote expected on the issue within the next two weeks. Arkansas is projected to spend about $136 million in general revenue on Arkansas Works in FY 2019, while the federal Medicaid contribution would be almost $2 billion.
Republican legislators are split on Arkansas Works. Last year, the program’s appropriation passed the state Senate with no votes to spare. Three vacancies in that chamber during the ongoing fiscal session could make the task even more difficult this year, considering budget bills require a three-fourths supermajority for passage.
A spokesman for Hutchinson declined to comment on the new lawsuit against the ACA when contacted Tuesday, saying the governor was currently out of the state and had not had a chance to review the complaint. Both Hutchinson and Rutledge are Republicans and both are running for reelection in 2018. (Hutchinson has one Republican and one Democratic challenger; Rutledge is running unopposed as of Feb. 27.)
The new complaint, which claims recent developments in Congress invalidate the ACA, is only the latest round in a legal battle that has raged between red states and the federal government since the health reform law’s inception in 2010. Filed in a federal district court in Texas on Monday, it names 20 states as plaintiffs. Most, unlike Arkansas, did not expand Medicaid.
In 2017, multiple Republican efforts to repeal and replace the ACA failed, despite unified GOP control of the White House and both chambers of Congress. However, Republicans did succeed in repealing one key provision of the ACA by tying it to unrelated tax cut legislation that passed in December. The Tax Cuts and Jobs Act of 2017 eliminated the ability of the government to financially penalize individuals for going without health insurance, thus removing the enforcement mechanism behind the ACA’s individual mandate.
That matters because of a previous Supreme Court ruling that rejected an earlier legal challenge to the ACA on the grounds that Congress had no authority to force citizens to buy health insurance. In a 2012 opinion authored by Chief Justice John Roberts, the majority said the individual mandate essentially functioned as a tax — and because Congress has the authority to levy taxes, the mandate was lawful. But, this new complaint argues, the mandate can no longer be considered a tax if the government has stopped collecting penalties.
"Indeed, the raising of 'at least some revenue' was ‘the essential feature of any tax,’ ” the complaint states. It later adds that “pursuant to the Tax Cuts and Jobs Act of 2017, starting in 2019, the tax penalty is eliminated by reducing the tax to zero. … The avoidance interpretation adopted … to save the individual mandate from its unconstitutionality is no longer ‘fairly possible.’ "
Undoing the individual mandate necessitates undoing the entire ACA, the plaintiffs argue. “This core provision is not severable from the rest of the ACA … . In fact, Congress stated in the legislative text that the ACA does not function without the individual mandate.
“Absent the individual mandate, the ACA is an irrational regulatory regime … coverage will decrease, premiums will rise, and markets will become irrational,” it continues later.
In addition to the provision that all individuals buy health insurance — now rendered unenforceable by Congress — the ACA enacted many other sweeping changes to the health care system. It expanded Medicaid, allowing millions of low-income adults to participate in the government-funded insurance program. It established a system of tax credits to subsidize the premiums of low-to-middle income people who buy individual health policies. The law prohibited insurance carriers from rejecting customers based on pre-existing conditions, charging sick people higher premiums and selling bare-bones plans that did not cover specific “essential health benefits.” It also required employer-sponsored plans to cover a beneficiaries’ dependents until they turned 26.