Trump Administration lawsuit would end health coverage for more than 299,000 Arkansans

UPDATE: The Trump Administration filed its lawsuit late on Thursday, June 26, 2020.

Despite the COVID-19 pandemic and resulting major recession, the Trump Administration and 18 state attorneys general, including Arkansas Attorney General Leslie Rutledge, are expected to file briefs today asking the Supreme Court to strike down the entire Affordable Care Act (ACA). If the lawsuit succeeds, at least 299,000 Arkansans – likely many more – 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. Thousands of Arkansas 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 about 10 percent and the public health crisis may still be ongoing. ACA repeal was projected to cause 20 million people to lose coverage nationally – and 299,000 people in Arkansas – before the crisis, but many more would likely lose coverage if the law is repealed during a deep recession, when even more people will turn to ACA programs for coverage.

Many of the estimated 169,000 Arkansans who have already lost job-based health coverage during the recession are eligible for coverage thanks to the ACA. Estimates show 56 percent are eligible for Medicaid coverage – a large share through the ACA expansion – and another 28 percent are eligible for marketplace coverage with premium tax credits.

Both the Medicaid expansion and the premium tax credits that help moderate-income people 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. Reversing these coverage gains would be expected to worsen all of these outcomes, and the adverse effects would be even greater with more people depending on the ACA for coverage during the recession.

The ACA also significantly narrowed racial disparities in health coverage, and the lawsuit would widen them. Based on pre-crisis estimates, 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 that would add to the financial burden on state and local budgets during an unprecedented state budget crisis and harm providers at a time when many will likely still be reeling from the large drop in their revenues due to the pandemic. Uncompensated care costs in Arkansas have fallen by 57 percent as a share of hospital budgets since the ACA’s major coverage provisions took effect. COVID-19 is threatening the survival of some community-based providers and rural hospitals.

Meanwhile, striking down the ACA would also eliminate other policies and protections important to addressing and recovering from the public health crisis. Arkansans with pre-existing health conditions – which could include having had COVID-19 – could once again be denied coverage or charged higher premiums. Insurance companies would no longer have to cover preventive services, including vaccines, without cost sharing, and could go back to putting annual and lifetime limits on coverage. And Centers for Disease Control funding would be cut.

The ACA has bolstered Arkansas’s ability to deal with both the pandemic and the resulting economic recession. Striking down the law would impede efforts to end the public health crisis and deal with the fallout.