What Has Become of the Affordable Care Act?

Tom Miller

Fall 2021

It is natural to think of the enactment of a piece of legislation into law as the end of the process by which it takes form. But in our times, the president's signature on a bill is often only the beginning of a long and convoluted process of policy formulation. Congress frequently enacts vague and broadly worded statutes that give the president enormous administrative leeway, and the courts are then called in to resolve any disputes over the law's implementation. On rare occasions, Congress even steps back into the arena to revise or modify a statute in response to controversies over its implementation. Then the process begins again.

The Affordable Care Act (ACA), signed into law by President Barack Obama on March 23, 2010, offers something like the apotheosis of this peculiar model of governance. The law as written left a host of crucial questions open, quite intentionally. And we have since seen three administrations, numerous courts, and several congresses attempt to address those questions in a variety of ways.

More than a decade after its enactment, this exceedingly malleable law has shape-shifted again and again. Those changes may have started out of necessity and desperation, with an initial phase of course corrections and adjustments intended to handle a challenging period of implementation and defend the law from multiple legal challenges. But soon enough, these changes evolved into political and policy warfare that treated the law itself as an arena for contention rather than a blueprint for administration.

The opening rounds of ACA implementation, which took place under the Obama administration, were carried out amid intense resistance from Republican officeholders and grassroots opponents. These skirmishes set the stage for a failed attempt to repeal and replace the law, which was followed by even more aggressive efforts by the Trump administration to harness the tools of regulation and enforcement to alter the practical meaning of the statute in ways that directly opposed those pursued by the Obama team. Each phase in this struggle triggered substantial litigation challenging executive-branch interpretations of what the ACA required and permitted. The Biden administration's early strategies for restoring and strengthening the ACA suggest it will be no less aggressive in walking back the previous administration's efforts and pushing the boundaries of the written statute.

Where does all of this leave the ACA, as a practical matter? What can it tell us about the dynamics of the contemporary administrative state, and of a health-care policy landscape that, while it may be less prominent in our politics, remains as dysfunctional as ever?


The ACA has faced threats to its survival from the moment of its enactment. Although Republicans made several attempts to overturn the law in Congress, the true near-death experiences it confronted in its first few years took place in the courts, while its practical evolution was largely the work of regulators in the executive branch responding to resistance from the states.

Over the course of the Obama years, two Supreme Court cases above all — NFIB v. Sebelius in 2012 and King v. Burwell in 2015 — seemed to raise problems that might have led to significant portions of the law being overturned. NFIB v. Sebelius involved a constitutional challenge to (among other provisions) the ACA's requirement that individuals purchase health insurance or else face a fine. The Court famously upheld the mandate by treating it as a tax. Along the way, it also rendered the law's expansion of Medicaid eligibility optional for state governments. This move unlocked a new field of political combat that turned out to be much more significant than anything involving the individual mandate.

King v. Burwell, meanwhile, hinged not on a constitutional question, but on an issue of statutory interpretation. The law as written seemed to suggest that federal subsidies for coverage could only flow to states that had established their own state-run insurance exchanges. The system couldn't have been intended to work that way, and yet the letter of the law seemed to say it should. The Court ultimately ruled that the law could not mean what it seemed to say on that front, and that subsidies should be available everywhere.

While each of these legal challenges drew intense public attention, in the end the Court sustained the law. Several other rulings in key ACA cases either re-arranged the bargaining positions of the respective parties — such as states skeptical of what became an optional Medicaid expansion as a result of NFIB — or extended into questions of conscience rights and religious liberty sparked by the law's requirement that employer-provided insurance plans cover contraceptives. These have been important questions, but none of them threatened the law existentially. Rather, the most consequential battles over the ACA in its early years were fought in the state and regulatory arenas.

Since there was never quite the infrastructure, adaptive flexibility, or political appetite at the national level to handle a host of complex and largely unresolved follow-through tasks, the architects of the ACA delegated much of the administrative-implementation dirty work to state-level government officials. This enabled Republican-run states to drag their feet, work around, evade, and otherwise resist the law's implementation. Their attempts to adopt work requirements, accommodate augmented savings accounts, operate expanded Medicaid coverage through private insurance channels, blend Medicaid coverage with individual-market coverage, and allow Medicaid coverage to fit within ACA-exchange eligibility parameters encountered mixed success, but they kept federal and state political markets busy.

The Supreme Court only complicated this dynamic further with its transformation of the law's Medicaid expansion into a voluntary option, which provided a new bargaining chip for reluctant states to use in negotiating various terms through waiver agreements. The resulting political dynamics encouraged recalcitrant states to hold out for more concessions before they would engage in Medicaid expansion or further implementation of the ACA exchange. In the wake of King, the states also gained the fallback option of accepting a larger federal role that ensured insurance coverage and tax credits arrived on time but diverted to Washington any political blame for implementation problems. As a result, several states were able to have their ACA-opposition cake and eat their premium tax-credit subsidies, too.

Since appealing to Congress for technical corrections of the law was not a realistic option — particularly once Republicans took control of the House of Representatives in 2011 — the various questions and complications raised by the ACA's rollout at the state level could only be settled through federal administrative action. In several areas, Obama officials adopted measures to block red-state end runs around the administration's narrower view of what the law's regulations should require. Guidance issued in December 2015, for example, tightened the regulatory guardrails limiting state innovation waivers under section 1332 of the ACA, and a formal rule issued in 2016 reduced the maximum length of short-term limited-duration insurance (STLDI) plans to no more than three months to prevent them from competing with the ACA's preferred insurance model.

Every such move was open to challenges in court, and many were made on such dubious legal grounds that the outcome of those challenges was far from clear. The administration's goal, however, was ensuring the survival of the overarching system, and achieving this relied on a combination of administrative flexibility, bureaucratic ingenuity, litigation brinksmanship, federal subsidies, health-sector economic incentives, and, in time, bias in favor of the status quo.

The key to the ACA's long-term survival was short-term survival. So while the law certainly survived to the end of Obama's term in office, it was still remarkably unsettled when that time came.


The Trump administration began its term in 2017 with a promise to repeal and replace the ACA. But that commitment was never much more than rhetorical for the president, and moving from rhetoric to legislative strategy proved impossible for Republicans in Congress. Although the party was able to zero out the despised individual-mandate penalty in its tax-reform bill later that year, a separate measure to replace the ACA never quite came together. By the summer of Donald Trump's first year in office, the repeal effort had failed in the Senate, and prospects for its revival appeared dim. It was clear that the battle over the ACA during the Trump years would take place in the same arenas as it had during the Obama years: executive agencies and the courts.

Once Trump officials lowered their sights from a full repeal, they set them instead on using regulatory efforts to undermine the ACA and its implementation while providing relief to some consumers facing the highest costs. Their strategy reflected the political equivalent of Isaac Newton's third law of motion: For each action, there is an equal and opposite reaction. "Obama did it, so we can do it in reverse" might be a more accurate motto for the approach. Meanwhile on the left, advocates and interest groups that had questioned the legal standing of various plaintiffs who brought suits against administrative actions during the Obama years began to adjust their views of such lawsuits once they saw a need to use similar tactics. Again, turnabout was the primary strategy, whether a fair one or not.

The Trump administration's regulatory approach revolved primarily around three strategies: cutting off taxpayer-funding flows to insurers, rewriting regulatory interpretations, and granting waivers to states to allow for greater policy experimentation. These were ambitious endeavors that were largely scattershot and slow to develop; the results proved uneven and impermanent.

The funding-cutoff drive began on October 12, 2017, when the administration announced it would seek to end taxpayer reimbursements of insurers for providing cost-sharing reduction (CSR) subsidy enhancements to ACA-exchange coverage. These reimbursements were meant to encourage insurers to participate in the exchanges, but Congress never authorized funds for them. The Trump administration hoped that ending them would help spark insurer interest in alternatives to the exchanges.

Insurers and others initially sued the administration for ending the CSR-subsidy reimbursements. But while those cases worked their way through lower federal courts, insurers discovered that losing those payments in the short term was not so bad after all. They began to engage in a practice called "silver loading," by which they added the amount of money they stood to lose in unpaid CSR subsidies to the premiums they charged for their "silver tier" plans on the exchanges — the mid-level insurance plans that the government uses to determine the total subsidies income-eligible consumers can receive for purchasing plans on ACA exchanges. By increasing silver-tier premiums, insurers increased the amount they received in such subsidies. In other words, the amount they could no longer receive through CSR subsidies was made up through premium subsidies.

These inflated premium subsidies enabled most participating insurers to improve their financial circumstances relative to how they would have performed under the old CSR system. Individuals receiving subsidies for purchases of exchange plans also came out ahead: Their out-of-pocket premium payments are capped relative to their family incomes, so they could use the larger subsidies and distorted plan pricing to purchase more generous coverage at lower net costs than they had before. In short, everyone involved came out a winner — except, of course, for federal taxpayers.

While the Trump administration attempted to cut off insurer subsidies through regulatory countermoves, Republicans in Congress opened up a second front in the battle. Using riders on each year's budget, they prohibited any additional appropriated funds from being transferred to insurers in the form of "risk corridor" payments. Risk corridors were designed so that insurers who earned profits in the exchanges would distribute some of those profits into a fund that would provide payments to insurers who took losses, thereby keeping the system more solvent. But as the exchanges began operating, it became clear that most insurers were fairing less well than the actuaries had projected, so that outgoing payments would need to exceed incoming ones. The Obama administration had set out to fill the gap with taxpayer dollars, but congressional Republicans denied them the funds. So the insurers sued, arguing that the law entitled them to payment.

This fight, like the CSR one, raged in the courts throughout the Trump years. It finally came to an end on April 27, 2020, when the Supreme Court in Maine Community Health Options v. United States definitively ruled that ACA insurers and their creditors were entitled to full payment of more than $12 billion in accrued claims. The majority's core reasoning was that the accrued risk-corridor payment obligations were tied to statutory text in the ACA that operated as a money-mandating provision even in the absence of annual appropriations. The decision effectively settled further appellate rulings on the merits of the CSR-subsidy cases as well.

Though the administration faced serious setbacks in its attempts to cut the flow of taxpayer dollars to insurers, its record on rewriting Obama-era regulatory measures was more mixed. In October 2017, on the same day his administration announced its funding-cutoff measure, President Trump issued Executive Order 13813. The order directed several executive-branch departments to increase health-care competition and choice, with the twin aims of reducing prices and improving quality of care.

In carrying out the order, agencies were told to prioritize expanding the availability of three alternative sources of coverage: association health plans (AHPs), health reimbursement arrangements (HRAs), and the aforementioned STLDI plans. AHPs are group health plans offered through an association of employers, such as an industry group. They allow smaller employers to aggregate their combined employee count and market clout to enjoy some of the benefits otherwise only available to larger employers. An HRA is a type of account-based group health plan, funded solely by employer contributions, that reimburses an employee for medical-care expenses incurred by the employee or the employee's spouse and dependents, up to a maximum dollar amount for a coverage period. The reimbursements under HRAs are tax-advantaged. Until 2016, STLDI coverage was defined as coverage that expires within 12 months of the date the contract becomes effective, subject to renewal with the insurer's consent. STLDI plans are excluded from the definition of individual health-insurance coverage under federal law.

On the employer-market side, the Department of Labor sought an expansive definition of what constituted an AHP-eligible employer, which would allow employers — including the self-employed — greater latitude in aggregating their employees to bypass the ACA's counting rules for the small-group insurance market. The rule was adopted in June 2018, but in March of the following year, the U.S. District Court for the District of Columbia struck it down as an "end-run around the ACA" that exceeded the department's statutory authority. Even under Chevron-style review of an ambiguous statutory definition of the term "employer," the court found that the rule's interpretation stretched beyond what the underlying law could bear.

The case proceeded to the U.S. Court of Appeals for the D.C. Circuit. The final decision was delayed for more than a year after oral argument concluded, and in late January 2021, the Biden administration received permission to pause the case while it reviewed its regulatory options. In the interim, more traditional AHPs can continue to do business, but operations of those proposed under the June 2018 rule have been suspended since the lower-court ruling in 2019.

In terms of individual-market coverage, the administration issued a rule in August 2018 that expanded STLDI plans' permissible term and duration. Though Trump officials made some progress in sustaining the rule, their success might prove fleeting. A solid foundation of statutory analysis indicates that Congress had never revisited its much earlier 1996 decision to exempt such plans from federal regulation, but the D.C. Circuit's split decision upholding the rule treated it as a permissible interpretation that could be revisited and changed again by future administrations. The ruling invited a Democratic administration to reverse the Trump administration's efforts, and the Biden administration remains likely to do so eventually.

The Trump administration had somewhat more success with regulatory revisions aimed at expanding insurance options for consumers beyond the narrow definition of "insurance" at the heart of the ACA. A June 2019 rule overturned Obama-era regulatory guidance regarding HRAs, which had stated that employer-provided HRA funds could not be integrated with individual-market coverage. The measure provided a regulatory workaround, offering various ways to slice and dice current employer groups between traditional coverage and HRA-subsidized individual coverage while maintaining most of the ACA's cushions and guardrails.

It remains to be seen if claims that this rule could transform the economics of the small-group insurance market were well founded. The rule applies to plan years beginning on or after January 1, 2020, and early progress on its implementation was complicated by the Covid-19 pandemic. More fundamentally, the rule's primary strategy — opening escape hatches in the ACA's regulatory maze — still includes protective overlays, complicated exceptions, new safe harbors, and untested options. But unlike most Trump-administration attempts to roll back or revise Obama-era ACA restrictions, the HRA rule hasn't faced any challenges in court and remains relatively uncontentious. It offers a modest hope not only for expanding insurance coverage in areas where the original ACA faltered (the small-group market), but for venturing beyond the traditional confines of the employer-group market without threatening to overturn ACA-related regulatory protections per se.

A final Trump rule attempted to make the process of purchasing any kind of hospital-based care more informative and competitive, regardless of one's coverage. This effort encountered a noticeably warmer reception in federal courts, and the final rule for price-transparency requirements went into effect on January 1, 2021. The measure was built around a revised interpretation of the ACA's statutory requirement that hospitals publicly post "standard charges." (A related price-transparency rule change applying to insurers was also launched but has yet to be implemented.)

The price-transparency rulemaking venture benefitted from the lack of practical value to patients and other payers of simply making available hospitals' chargemaster "list" prices, which was the initial requirement adopted under the Obama administration. Once the final rule expanded the operational definition of "standard charges" to include more useful categories, it sailed through legal challenges. The D.C. Circuit's opinion in American Hospitals Association v. Azar bypassed the district court's clearance of the rule[correction appended] under Chevron-style analysis and treated it as a best de novo reading of the law's definitions and requirements. The court emphasized the language of rational connections and reasonable judgments in finding sufficient grounds for upholding the change in policy position.

Though non-compliance penalties are low and the cost-reducing impact of price transparency per se is likely overstated, in this case, the Trump administration's regulators harnessed better preparation and statutory rationales to effect a more popular policy goal. Their work here is thus likely to endure. In fact, the Biden administration recently signaled that it intends to increase enforcement penalties for non-compliant hospitals.


Trump officials' efforts to free the states to experiment with Medicaid rules and other forms of coverage, on the other hand, met with stiff resistance.

In January 2018, the Centers for Medicare and Medicaid Services (CMS) launched an initiative to encourage states to seek Medicaid waivers and establish work requirements for certain categories of beneficiaries. In the fall of that year, CMS issued additional guidance that revised the Obama administration's interpretations of the guardrails surrounding waivers for various state innovations. The aim of both measures was to expand state-level experimentation with new ways of providing health benefits.

CMS's first state-waiver measure — encouraging states to consider work-requirement waiver requests — was rooted in the argument that requiring Medicaid enrollees to become more involved in regular hours of "community engagement" activities as a condition of continued insurance coverage would be beneficial to their health. But the courts soon ruled that the administration had failed to adequately consider the effects of the proposed waivers on Medicaid coverage levels. In a challenge to Arkansas's waiver provision, a D.C. Circuit panel unanimously held that any Medicaid demonstration program must promote the objectives of Medicaid, which are grounded in providing health coverage without restrictions geared to healthy outcomes, financial independence, or transition to commercial coverage.

It usually takes some convincing for a court to find an administrative agency guilty of "arbitrary and capricious" decision-making under the rules of the Administrative Procedure Act, but the panel found as much here because the Department of Health and Human Services (HHS) failed to consider adequately the coverage effects of the work-requirement rules. In response, instead of pulling back to a narrower approach — such as targeting a smaller segment of the able-bodied adult population covered by the ACA Medicaid expansion, augmenting administrative support for beneficiary compliance with information-disclosure requirements, or suggesting limited ways to increase overall, though less-comprehensive, coverage for a broader population — the Trump administration sought review of the decision at the Supreme Court.

The petition for certiorari was granted in December 2020, with oral argument initially slated for March 29 of the following year. But with the Biden administration signaling that it is adopting a different legal stance on the case (as well as on the work-requirement issue more generally), defending the waiver will be left to attorneys for the Arkansas state petitioners. Oral argument in the case has since been delayed indefinitely.

CMS's second state-wavier effort worked on two levels: It disaggregated the Obama administration's enhanced guardrail requirements for state individual-market waiver proposals under section 1332 of the ACA, and it re-interpreted statutory standards for the coverage, affordability, comprehensiveness, and budget-neutrality components of the waivers far more permissively than Obama-era rulemakers had allowed. The goal was to unleash a flurry of new experiments in alternative individual-market configurations among red states chafing against ACA regulatory constraints.

The administration's efforts met with a tepid response from its state allies. Several states had already been disappointed, if not outright burned, by CMS's halting and inconsistent responses to their waiver proposals, and the new guidance appeared to come too late in the election cycle to convince skeptical states to invest heavily in fresh attempts, as they could not be sure Trump's team would be in office when their work came to fruition. States were interested in adapting the waiver process more pragmatically — in the form of proven state re-insurance mechanisms that both reduced their individual-market premiums and provided federal pass-through funding in return — but the only significant waiver approved for more than re-insurance purposes was Georgia's.

The Georgia Access Model was approved near the end of Trump's term, and had been substantially scaled down from its initial ambitions, focusing primarily on enabling direct-enrollment mechanisms that bypassed regular ACA-exchange enrollment mechanisms in favor of federally subsidized individual-market coverage. In January 2021, a federal lawsuit was filed to challenge the waiver's statutory authority, and in June 2021, CMS — now under the authority of Joe Biden — ordered the state of Georgia to further study the access and health-equity issues involved in the direct purchase of ACA coverage through web brokers and insurance companies.

As Election Day 2020 drew nearer and the prospects for a Trump second term grew dim, administration officials developed a set of post-election contingency plans to either secure the remaining portions of its limited legacy or make it more difficult for Biden officials to quickly displace their efforts. The first step was CMS's approval of Medicaid-expansion waivers for the states of Nebraska in October 2020 and Tennessee in January 2021, in addition to the Georgia one. Nebraska set out to establish two tiers of Medicaid benefits tied to non-exempt adult Medicaid enrollees' compliance with community-engagement-activity measures, while Tennessee sought to craft a quasi-block-grant limitation on future program spending growth with more leeway for the state to recapture and redirect any savings.

To secure their regulatory legacy more broadly, Trump officials published "Good Guidance" regulations on December 7, 2020, designed to become final and effective on January 6. The new regulations made it easier to rescind existing sub-regulatory guidance but more difficult to issue new guidance. They required HHS to post significant guidance on a department repository, to insert "non-binding" notices on most guidance documents, and to seek the approval of the department's secretary before significant guidance documents are issued. Finally, the regulations made it easier for outside parties to seek withdrawals or modifications of existing guidance documents.

The administration also worked to transform into a final rule, and incorporate wholly by reference, its 2018 guidance on section 1332 state-empowerment waivers, thereby making changes to it somewhat more difficult and time consuming. The rule required the HHS and Treasury departments to review and administer such waivers in the same manner as they had since the 2018 guidance changes, with the stated rationale of providing more certainty for states investing in developing such waiver applications. Most of this final rule was rushed to publication at the last moment, on January 19, 2021.

In sum, although the Trump administration's barrage of regulatory measures, funding restrictions, and litigation efforts slowed some areas of ACA expansion, officials never derailed the law significantly, let alone permanently. Having failed to push Congress to act while it could, the administration ended up relying on a strategy very much analogous to that of the Obama administration, even if the two pursued roughly opposite goals. In doing so, officials under both presidents stretched the boundaries of administrative authority in countless ways to comply with their respective party's priorities. In the process, they further battered and deformed our already weakened constitutional system.

Six months into the Biden era, the Supreme Court handed down a decision that could have undermined the entire statute but ultimately changed very little. In California v. Texas, a handful of Republican-run states argued that, because Congress had zeroed out the individual-mandate penalty in 2017, the remaining statutory language establishing the mandate could no longer be considered a tax, and therefore could no longer be considered constitutional. If that provision fell, they argued, the entirety of the law should fall, too. The Supreme Court ultimately determined that the plaintiffs lacked standing to bring the case at all. And with that decision came the last gasp of Republicans' decade-long effort to repeal the ACA.

As older threats and opportunities wind down, no new major litigation over ACA matters appears imminent. The lower-intensity conflicts have largely shifted to administrative-law skirmishes over secondary settings on the regulatory dials. What these fights lack in scope and scale, they promise to make up in volume.


In January 2021, health-policy planners in the Biden administration faced a target-rich environment for redirecting ACA-related health policy. Advocates of a more active federal role in expanding health-insurance coverage through increased regulation and subsidization entertained ambitious claims for what the new president's team could do unilaterally. But if the past decade has shown us anything, it is that these ambitions confront a variety of administrative, legal, and political constraints.

Every administration in recent decades — including the Biden administration — has moved to "freeze for review" proposed regulations that have been finalized and published in the Federal Register but not yet fully activated. This buys officials time to slow the predictable rush of regulations that outgoing administrations try to publish before closing time. Yet the move by itself does not permanently end the proposals that made it into the register. If they became final rules, reversing or revising them is an option, but only with greater procedural difficulty, investments of time, and expenditures of political capital during an incoming administration's first year.

In addition to the regulatory freeze, the simplest moves available to any new administration involve issuing executive orders. It's no surprise, therefore, that the Biden administration's earliest efforts involved a slate of such measures. The president withdrew his predecessor's 2017 executive order, which had been used to launch various moves to deregulate ACA policies; rescinded an October 2019 order setting procedural limits on agency guidance documents; and directed all executive-branch officials handling Medicaid and ACA matters to review current policies and assess how well they protect and strengthen those programs. He also ordered agencies to review policies to advance racial equity and combat discrimination based on gender identity and sexual orientation, which could revive a stronger use of less-emphasized ACA provisions and bolster related coverage- and benefits-expansion initiatives.

Thus far, Biden officials have tended to rely far more on reversals of previous regulatory guidance and waiver approvals than launching new, full-blown rulemaking processes requiring stronger rationales and greater procedural resources. This strategy is understandable, as revising or reversing previous regulatory guidance is far easier, both procedurally and substantively, than promulgating new final rules and actions. But in response to various ACA supporters outside the administration, the Biden team has increasingly focused on the latter. In this vein, it has rescinded Trump-era Medicaid waivers, begun to remove Trump-era guidance on section-1332 waivers, re-imposed shorter maximum periods for STLDI plans, delayed proposed Trump changes on expanded AHP eligibility for large-group regulatory treatment, and challenged state-based expansions of web-based brokers selling alternatives to plans administered on the ACA exchanges. While remaining slow to limit the maximum term of STLDI plans directly, the Biden administration's other proposals to expand the generosity of subsidies for ACA-exchange plans are aimed at recapturing most of that customer base through other means.

In terms of state Medicaid waivers, the Biden administration committed early on to formally revoking previously approved waivers as soon as possible, while also relying on a continuing Covid-19 public-emergency rationale for limiting any state moves to reduce existing coverage eligibility. After several rounds of litigation in federal courts, the handful of states granted such waivers had already either suspended their operation, abandoned support for work-related waivers, or been enjoined from enforcing them. Outgoing Trump-era officials at CMS had also installed various procedural protections, requirements for public notice and comment, and appeal mechanisms for states that placed modest speed limits on the process. Nevertheless, Biden officials issued a series of communications to state leaders signaling that several Trump-era Medicaid rules and policies are under review and likely to be reversed. By the spring of 2021, revocations of several of those state waivers were underway. CMS also rescinded the initial guidance favoring work-requirement experimentation in order to eliminate any future basis for renewing or reviving those waivers.

There are drawbacks in going down this road. For instance, it forecloses future efforts to improve Medicaid-waiver terms, which might bring holdout Republican states on board with some version of expanded Medicaid coverage. It also risks inadvertently limiting waiver authority to expand Medicaid more aggressively in other states. In fact, the trade-offs involved in cracking down on these and other state-level waivers, such as those under section 1332, may have slowed what might have otherwise been an all-out rollback. One illustration comes from the appellate brief filed by the Biden administration last March in Arkansas v. Gresham. Instead of calling on the Court to overturn the Trump-era Medicaid work requirements in cases where they would cause "substantial coverage loss," the administration hedged its bets by asking the Supreme Court to vacate prior rulings in the case and remand matters back to HHS. Why? Because the Biden administration wanted its HHS secretary to retain the authority to offer other kinds of Medicaid waivers. In other words, while executive agencies under different presidents may hold differing political perspectives, they share a desire to maintain discretionary authority — which is not possible when they are hamstrung by court rulings.

Aside from issuing new executive orders, an incoming administration may also opt to reverse agencies' legal stances on pending court cases and alter enforcement policies in areas where the executive can exercise discretion. On the litigation side, the path of least resistance is to seek pauses in ongoing cases while the new administration considers policy options that might render the disputes moot. As noted above, Biden administration attorneys intervened in the Arkansas Medicaid work-requirement appeal at the Supreme Court to produce an indefinite delay in oral argument. On the enforcement side, Biden officials have opted to promote ACA-exchange coverage more aggressively, provide a new special-enrollment period, and use discretionary outreach funds to boost enrollment-assistance activities by subsidized health-plan navigators.

An incoming administration has one final policy lever at its disposal: legislation. After cautiously preparing for divided government, in January 2021, Washington Democrats found themselves with narrow majorities in both houses of Congress, which gave them (at least in theory) a greater mandate for ambitious health-care reform. The potential elasticity of budget-reconciliation mechanisms, along with the desire to avoid allowing extended claims of a Covid-19 crisis and an initially uneven recovery "go to waste," have further raised hopes of legislative activity on the health-care front.

The American Rescue Plan Act of 2021, enacted in March, included some such activity. The law included substantial sweetening of federal-subsidy terms for coverage of several constituencies, including the unemployed, exchange purchasers both below and above the previous ceiling of 400% of the federal poverty level, states finally agreeing to Medicaid expansions, and perhaps other cohorts to come. All of this was wrapped inside another round of heavy spending on pandemic relief.

Those expansions are technically temporary, but Democrats are already preparing to extend them in further reconciliation measures. Another $1.8 trillion proposal — the American Families Plan, as outlined by the Biden White House in late April 2021 — would render the recent ACA premium tax-credit enhancements for lower- and middle-income individuals permanent.

Making ACA coverage more financially attractive may be the safest route, politically speaking, to achieving the Biden administration's health-policy goals. The aim would be to crowd out regulatory escape hatches with comparatively lower pricing and broader benefits on a more tilted playing field, as opposed to closing them off through multiple rounds of restorative rulemaking. But it remains to be seen how much actual legislating will occur during the Biden era. For the time being, we can certainly expect more aggressive regulatory action and more aggressive litigation in response — just as we witnessed over the past decade.


The ACA remains a sweeping law with many potential regulatory expansions and enhancements yet to be fully exploited. An activist Biden administration promises to try. The combination of probes and other efforts to clean up or reverse changes made over the previous four years promises to increase the volatility of disputes concerning what the outer margins of the law allow, control, and prohibit. Given the likelihood of continued political polarization, further congressional gridlock, and fill-in-the-blank outsourcing of lawmaking authority to regulatory agencies, this recurrent testing of statutory boundaries imposes costs beyond those in litigation betting markets.

These battles, which now stretch over 10 years, offer two urgent, cautionary lessons — albeit ones our country is ill-prepared to learn just yet. First, Congress's willful dereliction of its central role in our system of government has fundamentally deformed that system. Second, by stepping in to fill the power vacuum created by legislators, regulators have made a mockery of the rule of law. While courts have overruled some of the most egregious affronts in this regard, judges' hands are largely tied by doctrines that counsel deference to agency decisions.

These lessons enhance the case for reconsidering the current parameters of Chevron deference, both practical and theoretical. The theory behind judicial deference to regulatory judgements is that these judgements are fundamentally substantive, not political. This is plainly not the case — not only in the health-care context, but in general. Keeping the executive branch in its proper place in our political arrangement requires a judiciary that is more assertive in policing the separation of powers. And it requires a Congress that is willing to resume its place as America's chief lawmaking institution.

A decade of squabbles over the ACA has battered and abused our constitutional system. The law was not written in a way that could resolve those disputes, and Congress has declined to step in to address them. The result has tested the boundaries of administrative action and judicial review. While some of the fighting has abated, almost no major question has been fully resolved. Any sane observer of this ongoing spectacle would have to conclude that this is no way to govern a republic.

Correction appended: The text originally indicated that the D.C. Circuit bypassed the district court's decision to set aside the rule. We regret the error.[return to text]

TOM MILLER is a senior fellow at the American Enterprise Institute and a senior lecturing fellow at the Duke University School of Law.


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