The Supreme Court Upholds the Affordable Care Act: What It Means and What’s Next

Today’s majority decision by the U.S. Supreme Court to throw out the latest challenge to the Affordable Care Act (ACA) leaves intact a law that has led to substantial improvements in insurance coverage and our overall health system since its passage in 2010. Millions of Americans, health care providers, and state governments who depend on the law’s health care protections and financing can breathe a sigh of relief. People and entities that benefit from the law include:

• 14.8 million adults with coverage through the ACA’s Medicaid expansion
• about 17 million people who have insurance through the individual market, including 11.3 million who enrolled in the ACA marketplaces during the 2021 open-enrollment period, more than 1 million who have enrolled through HealthCare.gov in the Biden administration’s COVID-19 open-enrollment period that runs through August 15, and 5 million who purchased plans directly in the individual market
• 1 million people who have coverage through the Basic Health Program in Minnesota and New York
• more than 130 million nonelderly adults with preexisting health conditions who benefit from the law’s consumer protections
• 151 million people with job-based insurance who are entitled to free preventive care and vaccinations
• 12.1 million young adults who have coverage on their parents’ health plans 1
• people of color and those with low income who have experienced significant reductions in long-standing disparities in coverage and access to care
• young women, older people, and smokers who would face substantially higher premiums without the law or be unable to get covered at all in the individual market
• people in need of maternity care; few, if any, health plans before the ACA covered maternity care or would only provide at additional cost
• people who experience catastrophic illness or injuries; before the ACA, insurers and employers could place annual and lifetime limits on the amount paid and insurers could cancel policies if someone became sick
• state governments that will maintain an estimated $152 billion in federal funding for health care
• doctors, hospitals, and health care manufacturers that will maintain an estimated $135 billion in revenue from people covered by ACA insurance expansions
• hospitals and state and local governments that will avoid an uncompensated care bill of $58 billion.

Yet many more people need the financial security of good health insurance. Nearly 30 million adults and children in the U.S. remain uninsured and some 40 million have plans that leave them underinsured and at risk for expensive bills.

The vast majority of uninsured adults and children are eligible for subsidized insurance under Medicaid, the Children’s Health Insurance Program, subsidized marketplace plans, or employer coverage. Affordability is a top reason people give for not enrolling in marketplace plans; the American Rescue Plan (ARP) makes a substantial, though temporary, improvement in marketplace subsidies. The Biden administration also has made it easier to enroll by reopening HealthCare.gov through August 15 and reinstating advertising and enrollment assistance funding slashed by the Trump administration.

Congress could build on these improvements to cover more people and provide permanent financial relief to families.

First, as President Biden proposes in the American Families Plan, making the temporary ARP marketplace subsidies permanent could reduce the number of uninsured by 4.2 million in 2022. In addition, the policy would reduce household health care costs for people enrolled in the marketplaces and the individual market by nearly one-quarter. A 64-year-old earning $51,200 a year would experience a premium cut of more than $8,000.

Reining in deductibles and out-of-pocket costs in marketplace plans would further reduce families’ spending. About two of five adults in the individual market and marketplaces were potentially underinsured in 2020 because these costs were so high relative to their incomes. A bill introduced by Senator Jeanne Shaheen (D–N.H.) could eliminate deductibles for some marketplace enrollees and reduce it for others by as much as $1,650.

Second, allowing Medicaid-eligible adults in the 13 states that have not yet expanded the program to enroll in marketplace plans would cover an estimated 2 million uninsured people. While the ARP provided more federal dollars to these states as an incentive to expand, the politics around expansion in states like Texas and Florida make it likely that these uninsured people — among the poorest in the country and disproportionately people of color — will remain uninsured for years to come. Allowing eligible people to get covered through the marketplaces with Medicaid-equivalent benefits would help provide economic security.

Last, marketplace affordability improvements could help millions of families with high premiums and out-of-pocket costs in employer plans. Under current law, people with premiums that exceed 9.8 percent of their income are eligible for subsidies through the marketplaces. Lowering the affordability threshold for employer plans to 8.5 percent of income for both single and family policies would mean that no one would have to spend more than that for their health insurance.

The Supreme Court has again reaffirmed the constitutionality of the ACA, further cementing the law as a cornerstone of our health system. Members of Congress from both parties have the tools they need to cover the remaining uninsured and end the U.S.’s chronic underinsured problem. As millions of Americans rebuild their lives in the wake of a devastating pandemic, it is now urgent for Congress to complete the work it began in 2010.