Support for this research was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates Linda J. Blumberg, Michael Simpson, Matthew Buettgens, Jessica Banthin, John Holahan OCTOBER 2020 Introduction • As the marketplace, premium tax percent for both American Indians/ credits, and cost-sharing reductions Alaska Natives (from 13 percent The Supreme Court is set to hear oral are eliminated, 9.3 million people to 24 percent) and people who are arguments in California v. Texas (called will lose income-related subsidies for Asian/Pacific Islander (from 11 Texas v. U.S. when heard by the lower marketplace insurance. percent to 19 percent); and by about courts) on November 10, 2020. In the • Medicaid/CHIP coverage (acute 40 percent for Hispanic people (from case, a group of state attorneys general, care for the nonelderly) will decline 21 percent to 30 percent). In addition, led by the Texas attorney general, by 22 percent nationally, or 15.5 the coverage gaps between white argue the entire Affordable Care Act million people. people and every other specified (ACA) should be found unconstitutional racial/ethnic group will increase. and overturned, given that a 2017 tax • The number of people with individually law set the ACA’s individual mandate purchased (nongroup) insurance will • Uninsurance among the lowest- penalties to $0 but did not eliminate the fall by 7.6 million. In almost all states, income population (with incomes now-unenforced individual mandate the remaining nongroup coverage will below 138 percent of the federal language along with them. Another have lower value (e.g., lower benefits, poverty level, or FPL) will more than group of attorneys general, led by the higher cost-sharing requirements, double, though uninsurance will also California attorney general, argue that higher administrative costs as a increase significantly among the the law has operated effectively since the percentage of the premium) than the middle class. penalties were eliminated, the mandate nongroup coverage provided under the ACA’s framework. • Federal government spending on is severable from the rest of the law, and health care will fall by $152 billion there are no constitutional grounds for • Low-income states that expanded per year, a 35 percent drop relative overturning it. Here, we update previous Medicaid eligibility under the ACA to current spending on marketplace analyses of the implications for insurance will see the largest percent increases subsidies and Medicaid acute care coverage, federal spending, and health in uninsurance, such as Maine (197 percent increase, from 5 percent to for the nonelderly population. care providers if the ACA is overturned.1,2 These estimates, computed using the 15 percent), Kentucky (184 percent • States that will experience the largest Urban Institute’s Health Insurance Policy increase, from 8 percent to 22 percent decreases in federal funding Simulation Model (HIPSM), are based on percent), and West Virginia (181 include Nebraska (56 percent, from a newly developed projection of coverage percent increase, from 8 percent to $2.1 billion to $0.9 billion), Virginia 21 percent). Iowa’s uninsurance rate (56 percent, from $9.5 billion to and spending in 2022 that accounts for will climb more than 150 percent an anticipated partial economic recovery $4.2 billion), Montana (51 percent, (from 6 percent to 14 percent), as from the COVID-19 recession. Our from $2.3 billion to $1.1 billion), and will Michigan’s (from 7 percent to 18 estimates of that economic recovery align Colorado (47 percent, from $6.3 percent). The uninsured population with employment levels projected by the will increase by at least 90 percent in billion to $3.3 billion). Congressional Budget Office for 2022.3 25 states and the District of Columbia. • Nationally, health care spending • Increases in uninsurance will be by and for nonelderly Americans Using these projections, we estimate spread across all racial and ethnic will fall by $135 billion. This that overturning the ACA would have the groups Uninsurance will increase spending decline will be spread following effects in 2022: by about 85 percent for both Black across hospitals ($56 billion), • An additional 21.1 million people people (from 11 percent to 20 pharmaceutical manufacturers ($30 will be uninsured, a 69 percent percent) and white people (from 8 billion), physicians ($17 billion), and increase nationally. percent to 15 percent); by about 75 other services ($33 billion). The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 1 Timely Analysis of Immediate Health Policy Issues • Relative to current levels, hospital they are available. We regularly update almost all states will be expected to revert revenues will be hardest hit in the model to reflect published Medicaid to pre-2014 practices of denying coverage California ($10.4 billion decrease), and marketplace enrollment and costs in to people with health problems, offering Florida ($3.8 billion decrease), each state. The enrollment experience in much more limited benefits, increasing Louisiana ($1.7 billion decrease), each state under current law affects how cost-sharing requirements, and setting Kentucky ($1.7 billion decrease), the model simulates policy alternatives. premiums based on a range of factors New Mexico ($1.1 billion decrease), The Appendix contains more information often without effective limits (e.g., health Arkansas ($836 million decrease), about the model and our methods for status, gender, occupation, health history, Idaho ($600 million decrease), and this paper. age, neighborhood of residence, past Montana ($503 million decrease). health care use). In addition, federal rules • Because of the 69 percent increase Results requiring that a minimum percentage of in uninsurance, the demand for Changes in Coverage. Table 1 compares premium dollars go toward paying claims uncompensated care will rise by 74 the expected current-law distribution (as opposed to insurer administrative percent, or $58 billion. The demand for of health insurance coverage for the cost, including profit) will be eliminated. uncompensated care from hospitals nonelderly population in 2022 with the Combined, this means the coverage sold alone will increase by $17.4 billion coverage distribution that same year will be harder for many people to access, in 2022. should the ACA be overturned. We particularly those with significant health estimate that the number of uninsured care needs, and the coverage purchased Data and Methods Overview will be less valuable to the consumer. people will increase by 21.1 million. The We use the Urban Institute’s Health substantially lower insurance rate is Insurance Policy Simulation Model attributable to 15.5 million people having Figure 1 shows that the lowest-income (HIPSM) for our analysis. HIPSM is a lost Medicaid and Children’s Health groups will experience the biggest detailed microsimulation model of the Insurance Program (CHIP) coverage increases in uninsurance if the ACA health care system designed to estimate (a 22 percent decrease) and 7.6 million is overturned. People in families with the cost and coverage effects of people having lost private nongroup income below 138 percent of FPL will proposed policy options. The model has insurance coverage (a 43 percent see their uninsurance rate more than been used extensively to estimate the decrease). The losses of public insurance double, from 16 percent under current cost and coverage implications of health coverage and nongroup coverage will be law to 35 percent. People with incomes reforms at the national and state levels offset modestly by 1.9 million more people between 138 percent and 200 percent and has been widely cited, including in having employer-based insurance. More of FPL will see their uninsurance rates the Supreme Court’s majority opinion than 9 million people will lose marketplace increase by 71 percent, from 16 percent in King v. Burwell.4 HIPSM is based on income-related subsidies that help them to 28 percent. Uninsurance rates for two years of the American Community pay for private nongroup insurance under people with incomes between 200 and Survey, and the population is aged to current law. 400 percent of FPL will climb 30 percent, future years using projections from the from 11 percent under current law to Urban Institute’s Mapping America’s Federal regulations of nongroup insurance 14 percent absent the ACA. Those with Futures program.5 HIPSM is designed to markets under the ACA will be eliminated if higher incomes will experience more incorporate timely, real-world data when the law is overturned, meaning insurers in modest increases in uninsurance. Table 1. H ealth Insurance Coverage Distribution of the Nonelderly Population under Current Law and If the ACA Is Overturned, 2022 Current Law ACA ACA Is Overturned Difference 1,000s of people % 1,000s of people % 1,000s of people % Total 277,446 100% 277,446 100% 0 0% Insured 246,680 89% 225,531 81% -21,149 -9% Employer 149,325 54% 151,245 55% 1,920 1% Nongroup, ACA-compliant 17,528 6% 9,953 4% -7,575 -43% ACA nongroup (with tax credits) 9,322 3% 0 0% -9,322 -100% ACA nongroup (without tax credits) 5,638 2% 0 0% -5,638 -100% Noncompliant nongroup 2,567 1% 9,953 4% 7,385 288% Medicaid/CHIP 71,162 26% 55,668 20% -15,494 -22% Other (including Medicare) 8,665 3% 8,665 3% 0 0% Uninsured 30,766 11% 51,916 19% 21,149 69% Source: Urban Institute Health Insurance Policy Simulation Model, 2020. Notes: ACA = Affordable Care Act. CHIP = Children’s Health Insurance Program. Estimates assume Medicaid coverage expansion waivers in place in seven states before the ACA are reinstated. It is likely that at least some of these waivers will not be reinstated, however, making our estimated increases in uninsurance conservative. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 2 Timely Analysis of Immediate Health Policy Issues Figure 1. Uninsurance Rates among Figure 2. Uninsurance Rates among the Nonelderly the Nonelderly Population under Population under Current Law and if the ACA is Current Law and If the ACA Is Overturned, by Race and Ethnicity, 2022 Overturned, by Family Income Relative to the Federal Poverty Level, 2022 35% 30% 28% 24% 21% 20% 19% 16% 16% 14% 15% 14% 13% 11% 11% 11% 8% 8% 5% 5% <138% 138%–200% 200%–400% >400% of American Asian/ Non- Hispanic Non- Other of FPL of FPL of FPL FPL Indian/Alaska Pacific Hispanic Hispanic Native Islander Black White Current law ACA is overturned Current law ACA is overturned Source: Urban Institute Health Insurance Policy Simulation Model, 2020. Source: Urban Institute Health Insurance Policy Simulation Model, 2020. Notes: ACA = Affordable Care Act. FPL = federal poverty level. Notes: ACA = Affordable Care Act. Estimates assume Medicaid coverage expansion waivers in place in seven Estimates assume Medicaid coverage expansion waivers in place in seven states before states before the ACA are reinstated. It is likely that at least some of these the ACA are reinstated. It is likely that at least some of these waivers will not be reinstated, waivers will not be reinstated, however, making our estimated increases in however, making our estimated increases in uninsurance conservative. uninsurance conservative. Figure 2 shows that overturning the ACA largest coverage gains under the ACA: uninsured people), North Carolina (33 will have substantial implications for all states that expanded Medicaid eligibility percent increase, or 387,000 people), racial/ethnic groups. Because the ACA under the law and states that had high Wisconsin (30 percent increase, 112,000 narrowed gaps in coverage between pre-ACA uninsurance rates (Table 2). people), and Georgia (24 percent Black people and non-Hispanic white These include Maine (197 percent increase, or 343,000 people). people, overturning the ACA reverses increase, from 5 percent to 15 percent), those improvements; uninsurance will Kentucky (184 percent increase, from Changes in Federal Spending. Table increase by roughly 85 percent for Black 8 percent to 22 percent), West Virginia 3 shows ramifications for states’ federal people and white people, leaving 20 (181 percent increase, from 8 percent health care funding if the ACA is overturned. percent of Black people and 15 percent to 21 percent), Montana (155 percent Nationally, federal investment in health of white people uninsured. Uninsurance increase, from 9 percent to 24 percent), care will decrease by $152 billion in 2022 will increase by about 75 percent among Michigan (152 percent increase, from 7 if the ACA is invalidated. Again, states that American Indians/Alaska Natives (from percent to 18 percent), and Pennsylvania gained the most assistance under the ACA 13 percent to 24 percent) and people who (143 percent increase, from 7 percent will lose the most federal spending. In 21 are Asian/Pacific Islander (from 11 percent to 16 percent). Overall, uninsurance in states, federal funding for marketplace to 19 percent). Uninsurance among the the 37 states that expanded Medicaid subsidies and Medicaid acute care for Hispanic population will rise by more eligibility under the ACA (including the the nonelderly will fall by 40 percent or than 40 percent, from 21 percent to 30 District of Columbia) will more than more. Under ACA repeal, Florida’s federal percent—the highest uninsurance rate of double. However, even states that did not funding will drop by $10.7 billion in 2022 any racial/ethnic group. Together, people expand Medicaid will experience large (41 percent), and Wyoming’s will drop by of other races/ethnicities will experience increases in uninsurance as marketplace $311 million (49 percent). These large an 80 percent increase in uninsurance subsidies are eliminated along with other percent decreases in two states that did (from 8 percent to 14 percent). ACA reforms. On average, uninsurance not expand Medicaid eligibility reflect their in those 14 states will increase by 28 limited traditional Medicaid programs and, If the ACA is invalidated, the largest percent. Some of the largest increases in Florida, high marketplace enrollment. percent increases in uninsurance will among these states will be felt in Florida Federal spending on health care in occur in states that experienced the (57 percent increase, or 1.5 million more California will fall by $25.4 billion, or 47 The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 3 Timely Analysis of Immediate Health Policy Issues Table 2. T he Uninsured Nonelderly Population under Current Law and If the ACA Is Overturned, by State and Medicaid Expansion Status, 2022 Current Law ACA Is Overturned Difference 1,000s of people % 1,000s of people % 1,000s of people % Total 30,766 11% 51,916 19% 21,149 69% Expansion States 16,229 9% 33,368 18% 17,139 106% Alaska 95 13% 143 20% 48 51% Arizona 755 12% 978 16% 223 30% Arkansas 230 9% 579 23% 349 152% California 3,682 11% 8,004 23% 4,323 117% Colorado 484 10% 966 20% 482 100% Connecticut 203 7% 442 15% 239 118% Delaware 67 8% 92 11% 26 38% District of Columbia 43 7% 84 14% 40 94% Hawaii 114 9% 143 12% 29 25% Idaho 161 11% 356 23% 195 121% Illinois 1,073 10% 1,810 17% 737 69% Indiana 499 9% 1,085 19% 586 118% Iowa 144 6% 365 14% 221 153% Kentucky 294 8% 836 22% 542 184% Louisiana 381 10% 935 24% 554 145% Maine 54 5% 159 15% 105 197% Maryland 420 8% 816 16% 395 94% Massachusetts 248 4% 488 9% 241 97% Michigan 552 7% 1,395 18% 842 152% Minnesota 291 6% 608 13% 317 109% Montana 79 9% 202 24% 123 155% Nebraska 135 8% 260 16% 125 93% Nevada 397 14% 710 25% 313 79% New Hampshire 74 7% 166 15% 91 123% New Jersey 731 10% 1,392 19% 662 91% New Mexico 216 12% 534 29% 318 147% New York 1,106 7% 2,075 13% 969 88% North Dakota 75 12% 115 18% 39 52% Ohio 724 8% 1,496 16% 772 107% Oregon 346 10% 753 22% 407 118% Pennsylvania 693 7% 1,687 16% 994 143% Rhode Island 60 7% 156 18% 97 162% Utah 299 10% 559 19% 260 87% Vermont 44 9% 59 12% 16 36% Virginia 755 10% 1,433 19% 678 90% Washington 597 9% 1,180 18% 583 98% West Virginia 109 8% 307 21% 198 181% Nonexpansion States 14,537 15% 18,547 20% 4,010 28% Alabama 486 12% 608 15% 122 25% Florida 2,641 15% 4,140 24% 1,499 57% Georgia 1,401 15% 1,745 19% 343 24% Kansas 341 14% 399 16% 58 17% Mississippi 371 15% 448 18% 77 21% Missouri 676 13% 804 16% 128 19% North Carolina 1,179 13% 1,565 17% 387 33% Oklahoma 597 18% 726 21% 129 22% South Carolina 572 14% 733 17% 161 28% South Dakota 95 13% 112 15% 17 18% Tennessee 731 13% 901 16% 171 23% Texas 4,996 19% 5,784 23% 788 16% Wisconsin 366 8% 478 10% 112 30% Wyoming 85 16% 104 20% 19 22% Source: Urban Institute Health Insurance Policy Simulation Model, 2020. Notes: ACA = Affordable Care Act. Estimates assume Medicaid coverage expansion waivers in place in seven states before the ACA are reinstated. It is likely that at least some of these waivers will not be reinstated, however, making our estimated increases in uninsurance conservative. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 4 Timely Analysis of Immediate Health Policy Issues Table 3. F ederal Spending on Marketplace Subsidies and Medicaid/CHIP Acute Care for the Nonelderly Population under Current Law and If the ACA Is Overturned, by State and Medicaid Expansion Status, 2022 Current Law ACA Is Overturned Difference Millions of $ Millions of $ Millions of $ % Total 435,704 283,743 -151,962 -35% Expansion States 299,012 179,548 -119,464 -40% Alaska 1,462 950 -512 -35% Arizona 12,639 10,102 -2,537 -20% Arkansas 5,652 3,563 -2,090 -37% California 53,748 28,338 -25,410 -47% Colorado 6,309 3,347 -2,962 -47% Connecticut 5,268 3,228 -2,040 -39% Delaware 1,551 1,211 -340 -22% District of Columbia 1,559 1,303 -257 -16% Hawaii 1,236 892 -345 -28% Idaho 2,763 1,268 -1,495 -54% Illinois 9,697 6,175 -3,522 -36% Indiana 9,111 5,355 -3,757 -41% Iowa 4,059 2,637 -1,423 -35% Kentucky 9,356 4,996 -4,360 -47% Louisiana 8,669 4,570 -4,099 -47% Maine 2,173 1,427 -746 -34% Maryland 8,142 4,736 -3,406 -42% Massachusetts 9,124 7,363 -1,761 -19% Michigan 14,774 8,754 -6,020 -41% Minnesota 7,309 4,962 -2,347 -32% Montana 2,266 1,119 -1,148 -51% Nebraska 2,079 912 -1,167 -56% Nevada 3,471 2,047 -1,424 -41% New Hampshire 1,068 629 -439 -41% New Jersey 7,564 4,131 -3,433 -45% New Mexico 5,844 3,072 -2,772 -47% New York 34,812 22,447 -12,365 -36% North Dakota 560 310 -250 -45% Ohio 15,202 10,376 -4,826 -32% Oregon 6,599 3,654 -2,944 -45% Pennsylvania 16,853 11,086 -5,767 -34% Rhode Island 1,368 880 -488 -36% Utah 4,121 2,114 -2,006 -49% Vermont 1,297 1,071 -226 -17% Virginia 9,455 4,177 -5,278 -56% Washington 8,597 4,237 -4,360 -51% West Virginia 3,254 2,112 -1,142 -35% Nonexpansion States 136,693 104,195 -32,498 -24% Alabama 5,837 4,538 -1,298 -22% Florida 25,939 15,257 -10,683 -41% Georgia 11,562 8,992 -2,569 -22% Kansas 2,211 1,671 -540 -24% Mississippi 5,016 4,303 -712 -14% Missouri 8,289 7,064 -1,225 -15% North Carolina 16,518 12,622 -3,896 -24% Oklahoma 5,166 3,920 -1,246 -24% South Carolina 5,967 4,521 -1,446 -24% South Dakota 887 650 -237 -27% Tennessee 9,102 7,509 -1,593 -18% Texas 34,205 28,572 -5,633 -16% Wisconsin 5,358 4,250 -1,108 -21% Wyoming 637 326 -311 -49% Source: Urban Institute Health Insurance Policy Simulation Model, 2020. Notes: ACA = Affordable Care Act. Estimates assume Medicaid coverage expansion waivers in place in seven states before the ACA are reinstated. It is likely that at least some of these waivers will not be reinstated, however, making our estimated decreases in federal health care spending conservative. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 5 Timely Analysis of Immediate Health Policy Issues percent, reflecting the size of the state and the ACA, the consequences will be felt much greater extent than had lower- the importance of the Medicaid expansion throughout the U.S. health care system. wage jobs. there. Virginia will lose $5.3 billion in Many of these implications are beyond federal funding (a 56 percent decrease) our ability to measure. Here, we estimate The simulations account for relevant with the law overturned, Michigan will lose the impact of overturning the law on state regulations, such as banning $6.0 billion (41 percent), and Pennsylvania health insurance coverage and federal short-term, limited-duration plans.6 Our will lose $5.8 billion (34 percent). spending on health care. We also show current-law estimates account for the how a 69 percent increase in the number federal individual mandate penalties Implications for Providers. Table 4 of uninsured Americans would affect being set to $0 beginning in plan year highlights the financial implications of spending on health care providers of 2019, as well as the fact that California, decreased spending on health care (both different types, as well as the demand for the District of Columbia, Massachusetts, public and private) to different types of uncompensated care. The implications and New Jersey have their own individual health care providers. As the number of of reduced federal spending and an mandate penalties. We treat Missouri insured people falls under ACA repeal, additional 21 million uninsured people and Oklahoma, where the ACA Medicaid so will spending on various types of would be particularly pronounced as expansion has been approved by ballot medical care. We estimate that health care the recession abates. In addition, higher initiative but not yet implemented, as spending will fall by $135 billion nationally. levels of demand for an array of public nonexpansion states. We do this because Of that, $56 billion is attributable to lower services and lower state and local tax the political environments surrounding spending on hospitals, $17 billion owes revenues will continue for some time, expansion, even once ballot initiatives are to lower spending on physician care, making it difficult for state and local passed, remain uncertain, and the timing $30 billion owes to lower spending on governments to increase funding enough and implementation of these expansions pharmaceuticals, and $33 billion owes to to meet these demands, let alone support are therefore still unknown. lower spending on other medical services. replacing lost coverage. These decreases will be spread across the The current version of HIPSM is calibrated country, but some of the largest percent Thus, invalidating the ACA will have to state-specific targets for marketplace decreases will be seen in New Mexico, a massive financial consequences for enrollment following the 2020 open very low–income state that has benefited health care providers and households, enrollment period, 2020 marketplace considerably from the ACA’s Medicaid and millions of people will experience premiums, and late 2019 Medicaid expansion, as well as Montana, Louisiana, reduced access to necessary medical enrollment from the Centers for Medicare Kentucky, and Idaho. These states all care. However, some legislative & Medicaid Services monthly enrollment expanded Medicaid under the ACA and mechanisms could help eliminate these snapshots. Aging our projections to had high pre-ACA uninsurance rates. eventualities before a Supreme Court 2022 involved several steps. First, we decision is issued: Congress can pass aged the 2020 population to 2022 using Given a 69 percent increase in the number and the president can sign legislation projections from the Urban Institute’s of uninsured people in the United States, eliminating the now-toothless individual Mapping America’s Futures program. overturning the ACA will greatly increase mandate while explicitly retaining the We then inflated incomes and health the demand for uncompensated medical remainder of the law. Alternatively, a law costs to 2022. Because the pandemic care, or care provided without payment could reinstate a more modest individual has reduced use of expensive care, we from the patient or an insurer. How much mandate penalty, a step that could also assume costs for private nongroup health of this increased need for uncompensated make the case moot. insurance and Medicaid are flat in 2021 care would be met is unclear, particularly but return to default inflation assumptions given increasing financial pressures on Methodology Appendix in 2022.7,8 Under our default assumptions, state governments due to the pandemic Given uncertain economic conditions in we estimate Medicaid will grow at 5 that will likely last years. Health care 2020, owing to the COVID-19 pandemic percent annually, private premiums will providers cannot feasibly meet all or even and consequent recession and its rapid grow at 6 percent, and out-of-pocket most of this increased need. We estimate evolution, we opted to simulate the spending and uncompensated care will that the demand for uncompensated care consequences of overturning the ACA grow at 3 percent. will increase by $58 billion in 2022, or 74 using a 2022 current-law baseline, percent, should the ACA be overturned a year when conditions should be Other ACA provisions that affect Medicare, (Table 5). This increased demand would more stable. In doing so, we assume, payment and delivery system reform, be distributed across different health consistent with Congressional Budget support for community health centers, care providers: $17 billion for hospitals, Office projections,3 that the economy will and preventive care initiatives will be $7 billion for physicians, $12 billion for have partly recovered from the pandemic eliminated if the ACA is fully invalidated. As pharmaceutical manufacturers, and $22 recession by that time. We assume the with our prior analyses, we do not analyze billion for other provider types. characteristics of people who remain elimination of those provisions here. We unemployed at that time are largely estimate the impacts of the ACA coverage Conclusion consistent with the distribution identified provisions being overturned, comparing The Supreme Court can invalidate the in U.S. Department of Labor data from them with insurance coverage and health entire ACA via California v. Texas. If the August 2020, which showed clearly that care spending under current law at the court sides with Texas and eliminates higher-wage jobs had recovered to a national and state levels. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 6 Timely Analysis of Immediate Health Policy Issues Table 4. H ealth Care Spending by Insurers (Public and Private) and Households on Acute Care for the Nonelderly Population under Current Law and If the ACA Is Overturned, by State and Medicaid Expansion Status, 2022 Current Law Total health Hospitals Physician services Prescription drugs Other services care spending (millions of $) (millions of $) (millions of $) (millions of $) (millions of $) Total 1,925,293 678,397 308,464 431,903 506,528 Expansion States 1,302,043 457,631 207,581 292,574 344,257 Alaska 4,801 1,694 756 1,052 1,299 Arizona 42,215 14,913 6,662 9,538 11,101 Arkansas 17,819 6,375 2,789 4,041 4,614 California 226,374 78,800 36,020 51,207 60,347 Colorado 33,830 11,657 5,548 7,521 9,105 Connecticut 24,335 8,346 3,843 5,604 6,542 Delaware 6,367 2,256 1,006 1,444 1,661 District of Columbia 4,828 1,763 749 1,064 1,252 Hawaii 7,178 2,563 1,145 1,611 1,859 Idaho 10,361 3,701 1,621 2,331 2,707 Illinois 71,159 24,657 11,652 15,868 18,982 Indiana 41,227 14,644 6,540 9,271 10,772 Iowa 20,115 7,012 3,273 4,462 5,368 Kentucky 28,037 10,039 4,330 6,412 7,256 Louisiana 26,855 9,737 4,098 6,136 6,884 Maine 8,347 2,926 1,306 1,943 2,172 Maryland 36,876 12,841 5,897 8,297 9,840 Massachusetts 43,679 15,432 7,035 9,691 11,521 Michigan 59,331 21,009 9,311 13,505 15,506 Minnesota 39,475 13,777 6,366 8,770 10,563 Montana 6,727 2,410 1,056 1,511 1,749 Nebraska 11,626 4,046 1,894 2,567 3,120 Nevada 17,134 6,072 2,760 3,846 4,455 New Hampshire 8,195 2,783 1,348 1,861 2,203 New Jersey 52,002 17,642 8,627 11,668 14,064 New Mexico 13,205 4,811 1,985 3,013 3,396 New York 121,564 44,183 18,962 26,991 31,428 North Dakota 4,352 1,518 722 937 1,175 Ohio 70,564 24,928 11,168 15,966 18,501 Oregon 25,876 9,049 4,097 5,871 6,859 Pennsylvania 82,747 29,049 13,323 18,515 21,860 Rhode Island 6,141 2,141 990 1,382 1,628 Utah 20,024 6,997 3,258 4,278 5,492 Vermont 4,756 1,706 732 1,085 1,232 Virginia 48,923 17,021 7,913 10,968 13,022 Washington 44,676 15,406 7,221 9,976 12,074 West Virginia 10,324 3,728 1,579 2,369 2,648 Nonexpansion States 623,250 220,766 100,883 139,330 162,271 Alabama 26,271 9,348 4,210 5,898 6,816 Florida 107,615 37,905 17,301 24,620 27,789 Georgia 58,199 20,500 9,510 12,978 15,211 Kansas 16,522 5,743 2,747 3,629 4,403 Mississippi 16,802 6,152 2,639 3,772 4,239 Missouri 38,215 13,743 6,130 8,545 9,797 North Carolina 63,372 22,604 10,182 14,164 16,422 Oklahoma 21,820 7,821 3,478 4,873 5,648 South Carolina 26,559 9,450 4,266 5,997 6,846 South Dakota 5,139 1,812 838 1,130 1,358 Tennessee 39,550 14,042 6,331 8,916 10,261 Texas 163,857 58,005 26,803 36,002 43,047 Wisconsin 35,739 12,380 5,860 8,012 9,487 Wyoming 3,591 1,261 588 794 949 continued The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 7 Timely Analysis of Immediate Health Policy Issues Table 4. H ealth Care Spending by Insurers (Public and Private) and Households on Acute Care for the Nonelderly Population under Current Law and If the ACA Is Overturned, by State and Medicaid Expansion Status, 2022 (continued) Change if ACA is Overturned Total health care spending Hospitals Physician services Prescription drugs Other services Millions of $ % Millions of $ % Millions of $ % Millions of $ % Millions of $ % Total -135,460 -7% -55,934 -8% -17,214 -6% -29,681 -7% -32,632 -6% Expansion States -108,839 -8% -44,862 -10% -13,119 -6% -24,235 -8% -26,623 -8% Alaska -470 -10% -190 -11% -59 -8% -105 -10% -116 -9% Arizona -1,804 -4% -674 -5% -252 -4% -431 -5% -447 -4% Arkansas -1,968 -11% -836 -13% -221 -8% -434 -11% -477 -10% California -25,436 -11% -10,361 -13% -3,056 -8% -5,781 -11% -6,237 -10% Colorado -2,825 -8% -1,218 -10% -344 -6% -612 -8% -651 -7% Connecticut -1,929 -8% -776 -9% -219 -6% -445 -8% -489 -7% Delaware -232 -4% -90 -4% -35 -4% -55 -4% -52 -3% District of Columbia -249 -5% -100 -6% -25 -3% -56 -5% -68 -5% Hawaii -166 -2% -62 -2% -22 -2% -40 -2% -41 -2% Idaho -1,489 -14% -600 -16% -180 -11% -345 -15% -364 -13% Illinois -3,483 -5% -1,472 -6% -429 -4% -739 -5% -842 -4% Indiana -3,734 -9% -1,574 -11% -431 -7% -829 -9% -899 -8% Iowa -1,183 -6% -504 -7% -144 -4% -256 -6% -279 -5% Kentucky -4,167 -15% -1,714 -17% -469 -11% -964 -15% -1,021 -14% Louisiana -4,027 -15% -1,682 -17% -453 -11% -921 -15% -972 -14% Maine -776 -9% -309 -11% -101 -8% -177 -9% -189 -9% Maryland -3,283 -9% -1,337 -10% -400 -7% -750 -9% -797 -8% Massachusetts -901 -2% -414 -3% -146 -2% -133 -1% -207 -2% Michigan -6,109 -10% -2,480 -12% -709 -8% -1,392 -10% -1,528 -10% Minnesota -2,105 -5% -924 -7% -248 -4% -417 -5% -516 -5% Montana -1,225 -18% -503 -21% -148 -14% -280 -19% -294 -17% Nebraska -989 -9% -390 -10% -119 -6% -232 -9% -248 -8% Nevada -1,368 -8% -566 -9% -165 -6% -300 -8% -338 -8% New Hampshire -421 -5% -172 -6% -53 -4% -95 -5% -102 -5% New Jersey -3,748 -7% -1,514 -9% -467 -5% -835 -7% -933 -7% New Mexico -2,792 -21% -1,107 -23% -304 -15% -670 -22% -711 -21% New York -5,174 -4% -2,279 -5% -728 -4% -916 -3% -1,250 -4% North Dakota -237 -5% -106 -7% -30 -4% -48 -5% -53 -5% Ohio -4,682 -7% -1,945 -8% -533 -5% -1,071 -7% -1,134 -6% Oregon -2,921 -11% -1,214 -13% -355 -9% -648 -11% -704 -10% Pennsylvania -5,594 -7% -2,284 -8% -686 -5% -1,222 -7% -1,403 -6% Rhode Island -460 -7% -195 -9% -54 -5% -98 -7% -114 -7% Utah -2,039 -10% -814 -12% -259 -8% -460 -11% -506 -9% Vermont -145 -3% -58 -3% -23 -3% -27 -2% -36 -3% Virginia -5,268 -11% -2,145 -13% -626 -8% -1,223 -11% -1,274 -10% Washington -4,358 -10% -1,801 -12% -499 -7% -994 -10% -1,064 -9% West Virginia -1,081 -10% -452 -12% -125 -8% -237 -10% -266 -10% Nonexpansion States -26,621 -4% -11,072 -5% -4,096 -4% -5,445 -4% -6,009 -4% Alabama -952 -4% -405 -4% -144 -3% -190 -3% -213 -3% Florida -9,364 -9% -3,771 -10% -1,446 -8% -1,959 -8% -2,186 -8% Georgia -2,026 -3% -863 -4% -310 -3% -404 -3% -449 -3% Kansas -421 -3% -174 -3% -63 -2% -93 -3% -91 -2% Mississippi -482 -3% -207 -3% -74 -3% -97 -3% -104 -2% Missouri -962 -3% -415 -3% -149 -2% -187 -2% -211 -2% North Carolina -3,226 -5% -1,334 -6% -488 -5% -680 -5% -724 -4% Oklahoma -921 -4% -383 -5% -139 -4% -194 -4% -205 -4% South Carolina -1,126 -4% -474 -5% -172 -4% -228 -4% -252 -4% South Dakota -128 -2% -57 -3% -19 -2% -22 -2% -29 -2% Tennessee -1,318 -3% -558 -4% -196 -3% -268 -3% -295 -3% Texas -4,523 -3% -1,935 -3% -704 -3% -894 -2% -990 -2% Wisconsin -916 -3% -388 -3% -149 -3% -177 -2% -202 -2% Wyoming -255 -7% -107 -8% -40 -7% -51 -6% -57 -6% Source: Urban Institute Health Insurance Policy Simulation Model, 2020. Notes: ACA = Affordable Care Act. Estimates assume that Medicaid coverage expansion waivers in place in 7 states prior to the ACA are reinstated. It is likely that at least some of thes waivers will not be reinstated, however, making our estimated decreases in federal health care spending conservative. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 8 Timely Analysis of Immediate Health Policy Issues Table 5. U ncompensated Care Sought under Current Law and If the ACA Is Overturned, by Type of Service, 2022 Total Prescription drug Hospitals Physician services Other services uncompensated care manufacturers Current law (millions of $) 78,501 22,171 10,081 16,033 30,217 ACA is overturned (millions of $) 136,462 39,558 16,962 28,016 51,927 Difference (millions of $) 57,961 17,387 6,881 11,983 21,710 Percent difference 74% 78% 68% 75% 72% Source: Urban Institute Health Insurance Policy Simulation Model, 2020. Notes: ACA = Affordable Care Act. CHIP = Children’s Health Insurance Program. Estimates assume Medicaid coverage expansion waivers in place in seven states before the ACA are reinstated. It is likely that at least some of these waivers will not be reinstated, however, making our estimated increases in uninsurance conservative. We present estimated effects of ACA of budget neutrality. It is also possible • Medicare DSH payments repeal assuming pre-ACA Medicaid that, if the ACA is overturned and the • Veterans Health Administration Section 1115 coverage expansion waivers Trump administration has a second term, will be reinstated. We therefore likely invalidation of the law could be used to • other federal programs underestimate the number of people who introduce large-scale changes to Medicaid • state and local government programs will become uninsured and the amount of the current administration now encourages federal health care dollars that will be lost through waivers, such as the imposition of • private programs, such as patient if the law is overturned. Before the ACA, work requirements. We did not simulate assistance programs providing free seven states received federal Section 1115 any such changes to the program. or reduced-cost prescription drugs to waivers to expand eligibility for Medicaid those who qualify coverage; most often, these states Health care spending data used in HIPSM • charity care and bad debt absorbed had demonstrated that their expansion come from the Medical Expenditure by health care providers would be budget neutral for the federal Panel Survey Household Component government because savings would and other sources. We estimate total HIPSM estimates the demand for accrue from moving Medicaid enrollees health care spending for each person uncompensated care by people who into managed-care organizations. The represented in HIPSM for each possible are uninsured or underinsured based on seven states were Arizona, Delaware, health insurance status; these estimates pre-ACA data. Coughlin and colleagues Hawaii, Massachusetts, New York, of spending control for a broad array of estimated that, in 2013, the federal Vermont, and Wisconsin. Because the sociodemographic variables and health government funded about 39 percent of ACA made these waivers obsolete in statuses. Using the Medical Expenditure uncompensated care through programs states that expanded Medicaid, not all Panel Survey Household Component, such as Medicaid and Medicare DSH waivers, or the coverage aspects of the we then compute the share of individual payments, state and local governments waivers, have been renewed since 2014. health expenditures attributable to each funded 24 percent, and health care If the ACA is overturned and not all state type of care (hospital, office-based providers funded 37 percent.9 It is unclear waivers are reinstated, Medicaid eligibility physician, prescription drugs, other) in the nonrenewed states will shift back how willing or able different levels of by individual characteristics (health government and different providers will to its pre–waiver implementation level. insurance coverage, age, gender, income, These states would be able to apply to be to increase funding for such care if and health status). The percentage of the ACA is overturned. Current patterns renegotiate their waivers with the federal spending assigned to each provider government, but the outcome would of uncompensated care use may not type is then imputed to the individuals persist if, for example, large increases be uncertain. First, states would have represented in HIPSM. in the number of uninsured people are to be willing and able to invest the time and expenses involved with the waiver. not met with commensurate increases Though the ACA reduced the volume Second, it is unclear what terms the Trump in government funding or provider of uncompensated care by reducing administration would agree to. And third, contributions of free or reduced-price the number of uninsured people, it is unclear whether states would be able care. Consequently, we discuss estimated uncompensated care is currently funded to show that their new waivers would be amounts of care (based on recent patterns in several ways: budget neutral to the federal government, of uncompensated care use) as the value given changes in circumstances since the • Medicaid disproportionate share of care sought by the newly uninsured, not waivers’ original approval and intervening hospital (DSH) and upper payment the value of the uncompensated care they changes in the administration’s calculation limit programs would actually receive. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 9 Timely Analysis of Immediate Health Policy Issues ENDNOTES 1 Banthin J, Blumberg LJ, Buettgens M, Holahan J, Pan CW, Wang R. Implications of the Fifth Court decision in Texas v. United States. Urban Institute. 2020. https://www.urban.org/research/publication/implications-fifth-circuit-court-decision-texas-v-united-states. Published December 19, 2019. Accessed October 7, 2020. 2 Blumberg LJ, Buettgens M, Holahan J, Pan CW. State-by-state estimates of the coverage and funding consequences of full repeal of the ACA. Urban Institute. 2019. https://www.urban.org/research/publication/state-state-estimates-coverage-and-funding-consequences-full-repeal-aca. Published March 26, 2019. Accessed October 7, 2020. 3 We calculate job losses as the difference in 2022 employment rates between the pre- and postpandemic economic forecasts from the Congressional Budget Office. Prepandemic forecasts are from Congressional Budget Office. The Budget and Economic Outlook: 2020 to 2030. Washington: Congressional Budget Office; 2020. https://www.cbo.gov/publication/56020. Accessed October 7, 2020. Postpandemic forecasts are from Congressional Budget Office. An Update to the Economic Outlook: 2020 to 2030. https://www.cbo.gov/publication/56442. Accessed October 7, 2020. 4 King v. Burwell, 576 U.S. 988 (2015). 5 Astone NM, Martin S, Peters HE, et al. Mapping America’s Futures. Urban Institute website. http://apps.urban.org/features/mapping-americas-futures. Updated December 1, 2017. Accessed October 7, 2020. 6 Blumberg LJ, Buettgens M, Wang R. Updated estimates of the potential impact of short-term, limited duration policies. Urban Institute. 2018. https://www.urban.org/ research/publication/updated-estimates-potential-impact-short-term-limited-duration-policies. Published August 16, 2018. Accessed October 7, 2020. 7 Wolfson BJ. Covered California announces record-low rate hike for 2021. California Healthline. August 4, 2020. https://californiahealthline.org/news/covered-california- announces-record-low-rate-hike-for-2021/. Accessed October 7, 2020. 8 New York Department of Financial Services. DFS Announces 2021 Health Insurance Premium Rates, Protecting Consumers during COVID-19 Pandemic. New York: New York Department of Financial Services; 2020. https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202008132. Accessed October 7, 2020. 9 Coughlin TA, Holahan J, Caswell K, McGrath M. Uncompensated Care for the Uninsured in 2013: A Detailed Examination. Washington: Urban Institute; 2014. https://www.urban.org/research/publication/uncompensated-care-uninsured-2013. Accessed October 7, 2020. The views expressed are those of the authors and should not be attributed to the Robert Wood Johnson Foundation or the Urban Institute, its trustees, or its funders. ERRATA This brief was corrected October 16, 2020, and October 23, 2020. On page 2, the estimated decrease in Florida’s hospital revenue under repeal of the Affordable Care Act is $3.8 billion, not million. On page 8, the fourth set of columns in table 4 shows the change in health care spending for prescription drugs. ABOUT THE AUTHORS & ACKNOWLEDGMENTS Linda J. Blumberg and John Holahan are Institute Fellows, Michael Simpson is a Principal Research Associate, and Matthew Buettgens and Jessica Banthin are Senior Fellows, all in the Urban Institute’s Health Policy Center. The HIPSM development team includes Matthew Buettgens, Michael Simpson, Clare Wang Pan, and Robin Wang. Their collective work contributes to all analyses using HIPSM. ABOUT THE URBAN INSTITUTE The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. For more information specific to the Urban Institute’s Health Policy Center, its staff, and its recent research, visit http://www.urban.org/policy-centers/health-policy-center. ABOUT THE ROBERT WOOD JOHNSON FOUNDATION For more than 45 years the Robert Wood Johnson Foundation has worked to improve health and health care. We are working alongside others to build a national Culture of Health that provides everyone in America a fair and just opportunity for health and well-being. For more information, visit www.rwjf.org. Follow the Foundation on Twitter at www.rwjf.org/twitter or on Facebook at www.rwjf.org/facebook. The Potential Effects of a Supreme Court Decision to Overturn the Affordable Care Act: Updated Estimates 10