What happens in Minnesota if Obamacare gets struck down by the courts?

Affordable Care Act opponents have won major legal battles. Much is at stake.

Photo illustration of nurses in a hospital
Photo illustration by FS Productions.

At least 300,000 Minnesotans may lose health coverage if the Affordable Care Act is overturned, which is the entirely possible outcome of a lawsuit winding its way through the courts.

The 2018 election hinged on the largely successful Democratic message that they would keep in place protections afforded by the Affordable Care Act, sometimes known as Obamacare. The Democrats’ promise to protect people with preexisting medical conditions was a constant drumbeat across the country.  

As a result, many Americans seem unaware that opponents of the Affordable Care Act, or ACA, continue to fight on, having scored several legal battles in recent years. Moreover, many of the law’s provisions and protections are at stake should the litigation prove successful and the law overturned. 

The lawsuit — not expected to be resolved until after the 2020 election — could upend the health care programs established by the 10-year-old law, affecting millions of Americans. Minnesota’s uninsured rate is among the lowest in the nation, but health care experts say if the ACA is overturned, hundreds of thousands could lose coverage. Which in turn would push many out of the middle class. 

“Health care coverage is sort of an underpinning of middle class life,” said Andy Slavitt, board chair of the health policy nonprofit United States of Care and acting administrator of the powerful Centers for Medicare and Medicaid Services under former President Barack Obama.

Republican officials from 20 states sued the federal government in 2017, arguing that the ACA’s individual mandate is unconstitutional and that the entire law should be struck down. Rulings from a federal trial court and federal appeals court agreed that the mandate is unconstitutional, but the appeals court panel declined to rule on the validity of the entire law, sending the case back to the lower court for review.

“Our lawsuit seeks to effectively repeal Obamacare, which will give President Trump and Congress the opportunity to replace the failed social experiment with a plan that ensures Texans and all Americans will again have greater choice about what health coverage they need and who will be their doctor,” said Texas Attorney General Ken Paxton, who lead the suit, in a statement after the federal judge struck the law down in 2018, The New York Times reported.

Democrats in several states, including Minnesota, requested the United States Supreme Court fast-track its consideration of the case to hear it before the court’s term ends this summer. The Supreme Court rejected the appeal, meaning it will hear the case in October 2020 at the earliest — if it takes on the case at all.

Minnesota’s Republican Reps. Tom Emmer, Pete Stauber and Jim Hagedorn didn’t respond to interview requests on the lawsuit, but Emmer and Hagedorn are on record opposing the ACA. Stauber was one of eight Republicans to vote for a non-binding resolution condemning the Trump administration’s support for the litigation seeking to overturn the law, the Hibbing Daily Tribune reported last year

President Donald Trump and Pete Stauber, then a Republican candiate for the US House
President Donald Trump with then-candidate Pete Stauber at a rally in Duluth in 2018. Stauber won the 8th District U.S. House seat. He has sought to walk a fine line on the Affordable Care Act. (Photo by Scott Olson/Getty Images)

Minnesota Democrats oppose the lawsuit. 

Nobody knows for certain what the final ruling will look like.

A decision affecting all or parts of the law would likely include a transition period to give Congress time to come up with a replacement, but there is no clear timeline, Slavitt said. The entire law or pieces of the law could be struck down, or the ACA could continue to stand. It could be invalidated in the states that sued, while remaining in effect elsewhere, he said.

University of Minnesota researcher Lynn Blewett said the consequences could be significant.

Although the state had a relatively healthy populace and high coverage rates before the ACA, the uninsured rate still dropped by more than half after it was implemented, from 9% in 2008 to 4% in 2018, according to data from the nonprofit Kaiser Family Foundation. If the law is overturned, the number of uninsured would likely increase, straining health care systems and families, Blewett said.

“The uninsured … delay [seeking health care], and then they go to the emergency department,” Blewett said. “Debt would increase. It would put hospitals under increasing stress, and especially in rural areas, they’re already under stress. It would really be a step back.”

Overturning the entire law or its major components would also deal a setback to the ACA’s halting efforts to separate people’s jobs from their health insurance, Slavitt said. 

“If you get sick, you’re really tethered to your employer,” Slavitt said. That, in turn, hinders people’s ability to switch jobs or start a business. 

Though the law will remain valid at least until a ruling comes down, uncertainty at the federal level causes confusion in local insurance markets, meaning some people may miss out on coverage before a decision is reached, said MNSure CEO Nate Clark.

Here’s what could happen in Minnesota if the ACA were struck down.

200,000 could lose Medicaid coverage

If the ACA were overturned and the Medicaid expansion rolled back, about 200,000 Minnesotans would lose coverage, except a few who would maintain coverage through a disability determination, according to the Minnesota Department of Human Services, or DHS.

Minnesota is one of 37 states to adopt the Medicaid expansion, an optional component of the Affordable Care Act that made more low-income adults eligible for coverage. The expansion is credited with increasing coverage rates across the country.

81,000 could lose coverage through MinnesotaCare

Coverage for the 81,000 Minnesotans enrolled in MinnesotaCare — a state health insurance program for the working poor — would be threatened, according to DHS.

The state established the program in 1992 to provide coverage to low-income people who nevertheless earn too much to be on Medical Assistance. Before the ACA, the state funded the program with the help of matching federal Medicaid money. Today, federal funding covers the lion’s share of the program’s payments, meaning the state would need to come up with hundreds of millions of dollars to run MinnesotaCare if the ACA were overturned.

Of the $426.6 million the program spent on enrollees’ medical services in fiscal year 2018, 86% came from federal premium tax credits, and 5% from the state, according to Minnesota House Research.

63,000 could lose private coverage

Just over half the 117,520 Minnesotans who enrolled in private coverage for 2020 through MNSure receive tax credits toward their premiums, according to MNSure. Without the average monthly $437 credit, some families may not be able to afford coverage.

MNSure itself wouldn’t necessarily be threatened if the ACA were overturned, but people who do sign up for coverage through the marketplace could lose coverage of services like mental health, maternity and infant care, Clark said. That’s because insurance plans would no longer be required to cover a full suite of health benefits, Clark said.

“The whole idea of comprehensive coverage would really go away,” he said.

The law’s requirement that most plans cover preventive services, like screenings and vaccinations, could also be dissolved.

“A significant part of health is keeping on top of your prevention screening, to catch things early and to maintain your connection with your doctor,” Blewett said.

The state could lose at least $2 billion in federal funding

The state would lose about $2 billion in federal funding for Medicaid and MinnesotaCare, “increasing pressure on the state budget to cover those who would be newly uninsured,” DHS wrote in an email to Minnesota Reformer.