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Our Take: DOJ asks Supreme Court to uphold the ACA, coalition seeks to expand the health care law

Feb 15, 2021

Last Wednesday, the Department of Justice sent a letter to the Supreme Court asking the justices to uphold the Affordable Care Act in California v. Texas.

“Following the change in Administration, the Department of Justice has reconsidered the government’s position in these cases. The purpose of this letter is to notify the Court that the United States no longer adheres to the conclusions in the previously filed brief of the federal respondents,” the letter, signed by Deputy Solicitor General Edwin Kneedler, stated.

Essentially, the Biden administration’s DOJ is asserting that the ACA’s individual mandate is constitutional, even after Congress reduced the individual mandate’s penalty payment amount to $0 in 2017.

However, should the high court decide that the mandate is unconstitutional, the DOJ is now taking the stance that it can be severed from the rest of the ACA and all other provisions of the law can stand.

The Trump administration’s view, including that of the DOJ under former Attorney General William Barr, was that the individual mandate is unconstitutional and inseverable, and thus the entire law is invalid.

The Supreme Court justices already heard oral arguments in the case in November. At the time, the court appeared likely to side with the argument that the individual mandate is severable.

In the DOJ’s letter, Kneedler did not ask for new oral arguments or additional briefs from the state AGs.

A ruling is expected by June.

Our Take: We’ve written about the attempts to repeal the Affordable Care Act ad nauseam. You know the basics, whether you’ve read about them here or elsewhere. Republican lawmakers have been trying to take down the ACA since before it was ever fully implemented, and those efforts escalated under the previous administration.

At the same time, the health care law has gained in popularity — particularly its protections for people with pre-existing conditions.

And now, after the country has struggled through the pandemic for a year, there’s widespread support for expanding the ACA.

For instance, Reuters reported last week that a coalition of health care and employer groups (including such heavyweights as the American Medical Association, the American Hospital Association, America’s Health Insurance Plans, the Blue Cross Blue Shield Association, and the U.S. Chamber of Commerce) asked the Biden administration to:
  • Increase the generosity of and expand eligibility for ACA premium tax credits and cost-sharing reductions
  • Establish a sustained insurance affordability fund
  • Automatically enroll and renew people who are eligible for Medicaid and premium-free marketplace plans
  • Ask Congress to appropriate sufficient funding to restore navigator, outreach, and enrollment programs
  • Provide incentive for states that have yet to expand their Medicaid programs by establishing another three-year, 100% federal funding match
  • Provide temporary assistance for those who’ve lost their job-sponsored health insurance coverage because of the pandemic so they can maintain coverage

”Achieving universal coverage is particularly critical as we strive to contain the COVID-19 pandemic and work to address long-standing inequities in health care access and disparities in health outcomes,” the Affordable Coverage Coalition stated in its request.

Yes, we realize that measures like these will add to the deficit and that a day of reckoning will come, but in the past year, millions have joined the ranks of the uninsured — and how terrifying that must be when a lethal virus is lurking potentially everywhere. If ever there was a time to expand coverage, surely this is it.

What else you need to know

The FDA granted emergency use authorization to Eli Lilly’s antibody ‘cocktail’ last Tuesday as a treatment for mild to moderate COVID-19 in individuals age 12 or older who test positive for SARS-CoV-2 and who are at risk for progressing to severe COVID-19. The cocktail is a combination of the monoclonal antibodies bamlanivimab and etesevimab administered as a single intravenous infusion; it is not authorized for patients who are hospitalized or require oxygen therapy because of COVID-19. Lilly noted in a press release that the combination therapy should be administered as soon as possible after an individual tests positive for COVID-19 and within 10 days of symptom onset. Bamlanivimab was granted an emergency use authorization as monotherapy in November.

Dublin-based Jazz Pharmaceuticals will buy GW Pharmaceuticals, a biopharmaceutical firm headquartered in London, for approximately $7.2 billion in cash and stock, the companies announced in a news release. Among the assets Jazz will acquire are GW’s lead product, Epidiolex, the first plant-derived cannabinoid treatment to gain FDA approval. The drug is indicated as a treatment for seizures associated with several rare diseases that are characterized by severe early-onset epilepsy. The boards of both companies unanimously approved the acquisition, which is expected to close in the second quarter. The transaction is subject to regulatory approval and other customary closing conditions.

Centene will undertake an organizational restructuring that will reduce the company’s workforce by about 3,000 employees and eliminate roughly 1,500 open positions, CEO Michael Neidorff announced during an earnings call last Tuesday. He said the reductions would primarily occur in areas where there is “significant overlap from acquisitions” and where there are “opportunities to leverage [the company’s] size and scale for increased efficiency.” The insurer posted a $12 million loss for the fourth quarter of 2020, in part because of higher costs associated with COVID-19 treatment and testing. That compares with a profit of $209 million in the previous year’s final quarter. For the full year, however, Centene recorded a profit of $1.8 billion, up from $1.3 billion in 2020.

Four private payers have been chosen to manage Oklahoma’s partially privatized Medicaid program. The Oklahoma Health Care Authority’s board selected Blue Cross Blue Shield of Oklahoma, Humana Healthy Horizons, Oklahoma Complete Health (a Centene subsidiary), and UnitedHealthcare to manage the new program, called SoonerSelect, starting Oct. 1. The contracts are reportedly worth approximately $2 billion. The Oklahoma State Medical Association (OSMA) said it plans to request an injunction against the contracts. “While we certainly have strong feelings about outsourcing the state Medicaid program to for-profit companies, this is about process,” said Dr. Pete Aran, chair of OSMA’s board of trustees. “The fact remains that Oklahoma’s legislature has not passed the appropriate legislation or funding to move managed care forward. We believe it is premature to move ahead with these contracts until the legislative process is completed.”

The FDA has authorized Visby Medical’s rapid, point-of-care COVID-19 PCR test for use by any organization with a CLIA certificate of waiver, including nursing homes, dialysis centers, urgent care clinics, and universities. The single-use polymerase chain reaction test provides results in 30 minutes and requires only a power plug to operate, the company noted in a press release. “By shrinking rapid PCR technology to palm-sized dimensions and eliminating the need for an additional instrument or reader, Visby Medical’s test provides fast, accurate, and actionable results at the point of need,” the San Jose, Calif.-based company stated. Visby plans to eventually make the test available for use in the home.

CMS is undoing the waivers that allow states to implement Medicaid work requirements, including a “pending” approval for Georgia’s partial Medicaid expansion. The move is in response to President Biden’s Jan. 28 executive order asking federal agencies to reevaluate policies that could make it harder to obtain or maintain health insurance, including Medicaid and Medicare coverage. But the reversals could take a while — before she left as CMS administrator, Seema Verma asked states to sign contracts that hamper the process. It’s also unclear what impact CMS’ new efforts will have on appeals the Supreme Court has agreed to hear next month regarding the Medicaid work requirements in Arkansas and New Hampshire.

The Senate voted 87-7 last Monday to confirm Denis McDonough to serve as secretary of the Department of Veterans Affairs, NPR reported. McDonough has worked for the federal government in various capacities since the mid-90s, including as President Barack Obama’s chief of staff during Obama’s second term. He is the second non-veteran to head the VA.

What we’re reading 
Biden’s Plans for Healthcare Largely Positive for NFP Hospitals. Fitch Wire, 2.3.21
Redesigning the Post-Pandemic Workplace. Sloan Management Review, 2.10.21

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