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  • Thomas Spreitzer and Michiko Kurahashi

ACA –Why It's Still Making Headlines And The RGB Effect

Updated: May 3

(This blog was published in America's Benefit Specialist Magazine, November 2020 Issue)


In early 2010, President Obama signed the Affordable Care Act (ACA) as we know it today, but the way it reached the oval office was dramatic and complex. While the Democratic-controlled House passed its version of the healthcare reform bill comfortably, it did not pass the Senate because of a slim Democratic majority. House Democrats, then, quickly adopted the bill drafted by the Senate to resolve the problem creating much bitterness among their opponents. Since then, the ACA has been the target of many legal challenges, particularly on the “individual mandate," a key feature of the ACA. The individual mandate requires all Americans to buy insurance or pay a penalty on their income tax.


Individual Mandate: Center of Legal Challenges


The individual mandate became a lightning rod for Republicans, who argued that the federal government should not impose health insurance on Americans because it should be an individual decision. Democrats have maintained that the mandate must be the key element of the ACA because without a “financial prod,” many Americans will remain uninsured, increasing the health care costs for others.


On June 28, 2012, the United States Supreme Court ruled that the ACA was constitutional and ended any legal challenges, or so we thought. While the majority upheld the ACA's constitutionality, the complex opinion written by Chief Justice Roberts opened doors for continuing battles between the Democrats and the Republicans. In sum, the Chief Justice held that the federal government has a right to impose the mandate and penalize for failure to obtain medical coverage because it has a legal right to collect taxes – for all intent and purposes, rewriting the law.


In late 2017, President Trump and the Congress under Republican control removed the tax penalty of the individual mandate by adding it to the tax cut package, setting the stage for the conservatives' next strategic process to eliminate the ACA. Multiple states subsequently joined forces in a class-action suit, filed in the conservative judicial state of Texas to eliminate the ACA because the individual mandate was its key feature. Without such a feature, it was unconstitutional. Since then, the suit has worked its way through the judicial process and is currently waiting for the Supreme Court to hear oral arguments in the fall of 2020 with a decision by June of 2021.


The RBG Effect


With the recent passing of Justice Ginsberg, we have another potentially serious change, of course. There is a significant risk to the ACA with the loss of the justice and President Trump and Senate Republicans expecting to fill her seat immediately before the national election with a conservative justice.


What's Next


Without the Supreme Court interpreting the penalty as a tax, the ACA might have withstood continuous legal challenges. Instead, the same judicial body which enabled it to move forward must hear the case, again, and its interpretation of the word “penalty” representing a “tax” will be of great interest to both Democrats and Republicans. The legal battle continues even after the health care reform law was enacted more than 10 years ago.

About the Authors:


Thomas J. Spreitzer is a successful entrepreneur and business owner of Diversified Brokerage Ltd., which provides consultative and brokerage services in employee group benefits, retirement plans, cost management, and federal and state-specific regulatory requirements to business owners, CFOs, and HR specialists of small to mid-size businesses, non-profit organizations, unions, and municipalities in the U.S.


As a member of the National Association of Health Underwriters and a member of the National Association of Life Underwriters, Thomas is recognized by his clients, the group insurance network, and industry colleagues as an expert in group employee benefits for small to mid-size organizations in the U.S.


Michiko Kurahashi is a chief marketing officer and an adjunct professor. Michiko has worked with several global organizations and start-ups. She was most recently Chief Marketing Officer at AXIS Capital, a global provider of specialty insurance and reinsurance.


Before joining AXIS Capital, Michiko served as Head of Marketing at CIT Bank, and before CIT, she served as Chief Communications Officer – Americas at UBS AG.


Michiko holds a Bachelor of Arts degree in sociology from the University of Michigan, Ann Arbor; a Master of Arts degree, and a Doctorate in quantitative research and social stratification from Cornell University.