Implications of the Fifth Circuit Court Decision in Texas v. United States

Brief

Implications of the Fifth Circuit Court Decision in Texas v. United States

Losses of Coverage, Federal Health Spending, and Provider Revenue

Abstract

The US Court of Appeals for the Fifth Circuit has issued a ruling in Texas v. United States, a case that challenges the constitutionality of the Affordable Care Act (ACA). The Fifth Circuit remanded the case to the District Court; ultimately, the case is likely to be reviewed by the Supreme Court. If the Supreme Court finds that the entire ACA without the individual mandate penalties in place is unconstitutional (the argument made by the plaintiffs in the case), the Court would overturn a groundbreaking piece of national legislation that expanded health insurance coverage to millions of people across the nation. Nearly 20 million people would lose insurance coverage if the ACA were repealed, and federal spending on health care would shrink by $134.7 billion in 2019 dollars. Coverage losses of this magnitude would affect every state and many groups of people; in this brief we identify the states and people who would face the largest losses and include new estimates by city. Repeal of the ACA would also directly affect health care providers because coverage losses lead to lower spending on health care services. We estimate that total health care spending by the nonelderly population under ACA repeal would fall by $94.6 billion (5 percent) in 2019 dollars. In addition, greater numbers of uninsured people would seek more free or reduced-price care from providers. We estimate that the cost of uncompensated care sought by uninsured people would nearly double, climbing by about $50 billion in 2019.
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