Texas lawsuit would end health coverage for more than 379,000 Kentuckians
Despite the COVID-19 pandemic and resulting major recession, the Trump Administration and 18 state attorneys general are expected to file briefs asking the Supreme Court to strike down the entire Affordable Care Act (ACA). If the lawsuit succeeds, at least 379,000 Kentuckians – and many more during the pandemic – would lose health coverage.
“The administration and AGs’ lawsuit has the potential to throw the health care system into chaos in the middle of a pandemic and economic recession,” said Dustin Pugel of the Kentucky Center for Economic Policy. “Hundreds of thousands of Kentuckians would lose coverage and many more would pay more for coverage or care.”
The Supreme Court is likely to decide the case in the first half of 2021, when the unemployment rate is still expected to be high and the public health crisis may still be ongoing. ACA repeal was projected to cause 20 million people to lose coverage nationally – and 379,000 people in Kentucky – before the crisis. Many more would lose coverage if the law is repealed during a deep recession, as even more people turn to ACA programs for coverage.
Many of the hundreds of thousands of Kentuckians who have likely already lost job-based health coverage during the recession are eligible for coverage thanks to the ACA. Estimates show 55% of those people are eligible for Medicaid coverage – a large share through the ACA expansion – and another 28% are eligible for marketplace coverage with premium tax credits. Kentucky has already seen a surge of over 130,000 in Medicaid enrollment mostly thanks to the ACA expansion of eligibility.
Kentucky’s successful Medicaid expansion and the premium tax credits that help 1 in 9 Kentuckians afford private coverage in the health insurance marketplaces would be eliminated if the ACA is struck down.
Research shows the ACA has improved access to care, financial security, and health outcomes, with strong evidence that both Medicaid expansion and coverage through the ACA marketplaces save lives – more than 700 in Kentucky alone since 2014. Reversing coverage gains would worsen all of these outcomes, with effects being even more severe due to the pandemic and recession.
The ACA also significantly narrowed racial disparities in health coverage, and the lawsuit would widen them. Based on pre-crisis estimates, in Kentucky, repeal would cause nearly 1 in 10 non-elderly Black people, and 1 in 10 non-elderly Hispanic people, to lose their health insurance, compared to about 1 in 16 white people.
Coverage losses from the lawsuit would also lead to spikes in uncompensated care costs, which have fallen by 71% as a share of hospital budgets since the ACA’s major coverage provisions took effect. Repeal would add to the financial burden on state and local budgets during an unprecedented state budget crisis, and it would also harm providers – particularly rural hospitals – at a time when many will likely still be reeling from the large drop in their revenues due to the pandemic. COVID-19 is already threatening the survival of some community-based providers and rural hospitals.
The lawsuit hinges on a change to the ACA requirement that all Americans have health coverage: With the 2017 Tax Cuts and Jobs Act, Congress removed the financial penalty associated with this “individual mandate.” The legal argument by those in favor of repeal is that a $0 penalty makes the whole law – including all of the new coverage options – moot because of a technicality in the way it was passed.
“While this issue is being argued in the courts, the health coverage of hundreds of thousands of Kentuckians during a pandemic hang in the balance,” said Dustin Pugel of KCEP. “Congress created this problem, and Congress could and should easily fix it tomorrow with a simple legislative correction.”