HEALTH POLICY CENTER

Implications of the Fifth Circuit Court
Decision in Texas v. United States
Losses of Coverage, Federal Health Spending, and Provider Revenue

Jessica Banthin, Linda J. Blumberg, Matthew Buettgens, John Holahan, Clare Wang Pan,
and Robin Wang
December 2019
The US Court of Appeals for the Fifth Circuit issued a ruling in Texas v. United States, a
case that challenges the constitutionality of the Affordable Care Act (ACA) given the
elimination of the law’s individual mandate penalties. This ruling means that the case
continues to pose a considerable risk that the entire ACA will be overturned. In the
decision, the Court remanded the case to the District Court for further analysis on
whether any parts of the ACA are severable from the individual mandate and thus may
stay in effect. Ultimately, the case is likely to be reviewed by the Supreme Court.
If the Supreme Court finds that the entire ACA is unconstitutional without the penalties in place
(the argument made by the plaintiffs), then the law would be overturned, and insurance coverage rates,
federal spending on health care, and health care provider revenue would decline. Previous Urban
Institute analyses found that elimination of the ACA would cause nearly 20 million people to lose
insurance coverage, a dramatic decline that would coincide with a substantial loss of federal health
spending. The surge in the number of uninsured would increase current law uninsurance by 65.4
percent (Blumberg et al. 2019). The total number of uninsured in the US would rise to more than 50
million, or 18.3 percent of the nonelderly population. Coverage losses of this magnitude would affect
every state and all types of individuals and families; in this brief we identify the states and people who
would face the largest losses and include new estimates by city.
A court ruling overturning the ACA would substantially decrease federal spending on health care
and would have significant implications for state budgets. We estimate federal spending would have
shrunk by about $134.7 billion in 2019 if the ACA had been eliminated at the start of this year. As we
show in this brief, these declines under ACA repeal would vary widely by state (Holahan, Blumberg, and
Buettgens 2019). States would have to decide whether to use state funding—and if so, how much—to

 make up for the loss of federal funds, for supporting both the costs of coverage and the increased
demand for uncompensated care due to a much larger uninsured population.
The declines in coverage and federal spending resulting from ACA repeal 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. However, the greater number 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. This squeeze
could cause financial distress for some providers and increase unmet medical need.

Overview of the Effects of ACA Repeal on Hospitals and
Insurance Markets
Because hospitals are the last-resort providers for many uninsured people, their finances are
particularly affected by changes in the number of uninsured. Recent studies have found strong evidence
that hospital finances improved in states that expanded Medicaid eligibility under the ACA relative to
states that did not (Blavin 2016, 2017; Lindrooth et al. 2018; Rhodes et al. 2019). Those studies also
found that spending on uncompensated care fell and Medicaid revenues rose, resulting in improved
margins for hospitals in Medicaid expansion states compared with hospitals in states that did not
expand Medicaid. Rural and small hospitals were among those that benefitted the most. Thus, rolling
back the ACA would reverse financial gains for hospitals in expansion states and could jeopardize the
financial stability of rural hospitals in those states.
The nongroup market would also be thoroughly disrupted by an overturn of the ACA. With the
elimination of premium tax subsidies, people would drop coverage and the market would shrink. Market
regulations enacted under the ACA would be repealed. Those regulations prohibit insurers from
denying coverage to people with preexisting conditions and require that premiums be set according to
modified community rating rules, limiting variation by age. The ACA also mandated that plans cover
essential health benefits and limit out-of-pocket costs by conforming to one of four actuarial value tiers
that measure plans’ generosity of coverage. Without those protections, people with preexisting health
conditions seeking to purchase coverage in the nongroup market could be denied coverage, charged
higher premiums than other people their age, or offered a plan that excludes care for those conditions.
About 63 percent of adults ages 45 to 64 had at least 1 of 10 serious chronic conditions, and 32 percent
reported having 2 or more serious chronic conditions in 2012, according to a recent study based on a
large federally sponsored household survey (Ward, Schiller, and Goodman 2014). The high prevalence
of chronic health conditions suggests many older adults would face denial of coverage, higher
premiums, or exclusion from the nongroup market if the ACA were overturned. Many people denied
coverage in the nongroup market would face high out-of-pocket costs, contribute to rising levels of
uncompensated care and bad debt, and/or be unable to access necessary care.

2

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 Under ACA repeal, insurance plans in the nongroup and small group markets would no longer be
required to cover essential health benefits. Before the ACA and in most states, many nongroup plans
excluded or strictly limited benefits such as maternity care, prescription drugs, and mental health and
substance use treatment, though exclusions varied by state. Under ACA repeal, average premiums
would likely be lower for people not denied coverage, but plans would generally cover fewer services
and impose higher cost-sharing obligations on enrollees (i.e., deductibles, coinsurance, copayments, and
out-of-pocket maximums). People needing significant amounts of health care would face higher out-ofpocket costs and financial burdens. People needing benefits excluded from insurance policies would
have to pay the full costs or forgo that care. These significant costs could increase bankruptcy rates and
demand for uncompensated care.
A ruling that the ACA is unconstitutional would also affect the employer-sponsored insurance
market. ACA provisions prohibit annual and dollar lifetime benefit maximums, require zero cost sharing
for certain preventive care services, and require employers to cover young adults up to age 26 on their
parents’ policies, in addition to other changes. Without the ACA, none of those provisions would hold,
and employers would be free to discontinue such protections. States are very limited in their ability to
replace the federal provisions of the ACA with similar state regulations, because of restrictions under
the Employee Retirement Income Security Act that exempt self-insured employers from state
regulations (Fernandez 2010).
This brief focuses on the coverage provisions of the ACA that primarily affected people below age
65. However, the regulatory changes at the state and federal levels, changes to the Medicare program—
and any adjustments made to the health care delivery system in response—make it difficult to grasp
how ACA repeal would unfold. For example, an ultimate finding by the Supreme Court that the ACA is
unconstitutional would put Medicare payment rules in disarray, in addition to increasing prescription
drug costs for many elderly adults by reopening the Part D “doughnut hole.” It is beyond the scope of
this brief to consider the potential impacts in those areas, but that does not minimize their importance.

Estimated Effects of Full Repeal on Insurance Coverage
A judicial decision overturning the ACA would hit hardest those states where insurance coverage
increased most under the law, including many states that expanded Medicaid eligibility. In those states,
the number of uninsured people would almost double, climbing by an average of 91.8 percent (table 1).
In Arkansas, Kentucky, Louisiana, Maine, Montana, New Hampshire, Pennsylvania, and West Virginia,
the number of uninsured people would climb by more than 133 percent (figure 1). Conversely, the
number of uninsured people would rise by an average of 38.2 percent in states that did not expand
Medicaid eligibility. In Florida, an additional 1.5 million uninsured people would drive up the state’s
uninsurance rate by 67.0 percent, the highest percent increase among nonexpansion states.

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

3

 TABLE 1

The Uninsured under Current Law and Full ACA Repeal by State, Nonelderly Population, 2019
CURRENT LAW
FULL ACA REPEAL
Diff. from Current Law
1,000s of
1,000s of
1,000s of
people
%
people
%
people
%
Expansion states
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Hawaii
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Montana
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Dakota
Ohio
Oregon
Pennsylvania
Rhode Island
Vermont
Virginia
Washington
West Virginia
Nonexpansion states
Alabama
Florida
Georgia
Idaho
Kansas
Mississippi
Missouri
Nebraska
North Carolina
Oklahoma
South Carolina
South Dakota
Tennessee
Texas
Utah
Wisconsin
Wyoming
Total

15,452
75
768
206
3,421
396
171
66
35
132
1,297
600
149
252
335
51
374
137
627
331
63
376
66
732
207
1,488
56
704
304
644
57
32
670
538
92
14,924
504
2,327
1,594
202
342
404
639
182
1,168
617
536
101
738
4,678
383
436
74
30,377

8.8
10.5
12.8
8.1
10.0
8.4
5.8
8.4
6.1
10.4
11.6
10.6
5.7
6.8
8.7
4.9
7.1
2.5
7.7
7.0
7.5
13.8
6.0
9.7
11.3
8.9
9.6
7.4
9.1
6.2
6.6
6.5
8.9
8.8
6.4
15.3
12.3
14.4
16.9
13.8
13.7
16.2
12.5
11.4
13.3
18.2
13.3
14.0
13.2
19.2
13.6
9.0
14.8
11.1

29,632
143
1,064
505
7,210
796
394
94
69
143
1,902
1,097
336
630
830
134
719
239
1,347
596
175
658
155
1,327
434
2,095
81
1,445
676
1,502
124
45
1,312
1,102
254
20,621
647
3,887
2,055
281
404
504
808
234
1,672
763
778
114
905
6,411
484
589
85
50,253

16.8
20.1
17.7
19.9
21.0
17.0
13.2
12.0
12.1
11.2
17.0
19.3
12.9
17.1
21.5
13.0
13.6
4.3
16.6
12.6
20.9
24.1
14.3
17.6
23.7
12.6
14.0
15.2
20.3
14.4
14.3
9.1
17.4
18.1
17.6
21.1
15.8
24.1
21.8
19.3
16.1
20.2
15.8
14.7
19.1
22.5
19.3
15.7
16.3
26.3
17.2
12.2
17.1
18.3

14,180
68
297
299
3,789
400
223
28
34
11
605
497
187
379
494
83
345
102
720
265
112
282
89
595
226
607
25
741
372
858
67
13
642
565
162
5,697
143
1,560
461
79
62
100
169
52
503
146
242
12
168
1,733
102
153
12
19,877

91.8
91.4
38.6
145.1
110.7
101.2
130.0
41.8
97.2
8.1
46.6
82.7
125.7
150.5
147.4
164.8
92.2
74.0
114.8
80.0
176.8
75.1
136.0
81.3
109.0
40.8
45.6
105.3
122.2
133.2
116.3
39.9
95.7
105.0
175.6
38.2
28.4
67.0
28.9
39.4
18.0
24.9
26.4
28.7
43.1
23.7
45.0
11.9
22.7
37.0
26.5
35.2
16.0
65.4

Source: Urban Institute Health Insurance Policy Simulation Model.
Notes: ACA = Affordable Care Act. Diff. = difference. States are listed alphabetically by Medicaid expansion status.

4

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 FIGURE 1

Percent Increase in the Uninsured under Full ACA Repeal by State, Nonelderly Population, 2019

URBAN INSTITUTE

Source: Urban Institute Health Insurance Policy Simulation Model.
Note: ACA = Affordable Care Act.

We present new estimates that highlight the effects of eliminating the ACA on the 50 most
populous census-designated places, hereafter called cities. These 50 cities, listed in descending order by
size, are in 29 states and account for about 15 percent of the US population. Eight of the most populous
50 cities in the US are in California, seven are in Texas, and three are in Arizona. Colorado, Florida,
North Carolina, Ohio, and Tennessee each contribute two cities to the list. Our city analysis shows much
more dramatic jumps in uninsurance in some cities than in others.
Fifteen of the largest 50 cities would see their numbers of uninsured people double or more than
double if the ACA were rolled back (table 2). A sudden change of that magnitude would be challenging
for any local jurisdiction to manage and would likely involve substantial increases in uncompensated
care and use of emergency rooms and safety net providers. The uninsured populations in Baltimore,
Cleveland, Louisville, Philadelphia, Sacramento, and San Francisco would swell by about 130 to more
than 170 percent. The uninsured populations in Albuquerque, Denver, Detroit, Portland, Seattle,
Washington, DC, and several California cities, including Fresno, Long Beach, Oakland, San Diego, and
San Jose, would roughly double, expanding by about 100 to 120 percent. In the two largest cities in the
US, New York and Los Angeles, the number of uninsured would grow by 300,000 (37.0 percent) and
556,000 (90.9 percent), respectively, if the ACA were eliminated.

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

5

 TABLE 2

The Uninsured under Current Law and Full ACA Repeal in the 50 Largest Cities, Nonelderly
Population, 2019
CURRENT LAW
1,000s of
people
New York, NY
Los Angeles, CA
Chicago, IL
Houston, TX
Philadelphia, PA
Phoenix, AZ
San Antonio, TX
San Diego, CA
Dallas, TX
San Jose, CA
Jacksonville, FL
Indianapolis, IN
San Francisco, CA
Austin, TX
Columbus, OH
Fort Worth, TX
Charlotte, NC
Detroit, MI
El Paso, TX
Memphis, TN
Baltimore, MD
Boston, MA
Seattle, WA
Washington, DC
Nashville-Davidson, TN
Denver, CO
Louisville/Jefferson, KY
Milwaukee, WI
Portland, OR
Las Vegas, NV
Oklahoma City, OK
Albuquerque, NM
Tucson, AZ
Fresno, CA
Sacramento, CA
Long Beach, CA
Kansas City, MO
Mesa, AZ
Virginia Beach, VA
Atlanta, GA
Colorado Springs, CO
Omaha, NE
Raleigh, NC
Miami, FL
Cleveland, OH
Tulsa, OK
Oakland, CA
Minneapolis, MN
Wichita, KS
Arlington, TX

812
612
457
969
120
297
321
207
599
102
92
127
48
226
117
249
137
91
212
129
32
34
72
35
102
63
45
100
102
158
210
70
101
78
79
46
120
62
43
120
59
61
130
180
34
126
49
42
77
88

%
10.9
14.5
15.8
20.6
8.4
15.4
17.4
10.5
21.8
6.7
11.8
14.6
6.5
15.7
8.7
17.2
14.4
12.8
26.0
14.9
5.8
4.8
8.8
6.1
16.8
10.0
6.9
12.5
9.0
16.1
18.1
10.6
11.4
10.2
7.8
10.2
13.7
11.0
10.4
16.5
9.9
12.7
12.1
23.3
9.7
17.3
9.2
10.5
14.3
19.5

1,000s of
people
1,112
1,168
687
1,278
299
383
437
411
793
227
154
213
112
295
206
346
185
196
286
153
88
41
145
69
120
127
107
129
211
268
247
140
144
170
193
102
145
88
75
152
114
77
176
259
80
153
106
73
91
118

FULL ACA REPEAL
Diff. from Current Law
1,000s of
%
people
%
14.9
27.6
23.8
27.2
20.9
19.8
23.7
20.8
28.8
14.9
19.7
24.4
15.2
20.5
15.4
23.9
19.6
27.5
35.1
17.7
15.7
5.8
17.6
12.1
19.7
20.2
16.4
16.2
18.7
27.4
21.2
21.2
16.2
22.3
18.9
22.4
16.6
15.5
17.9
20.9
19.0
15.9
16.4
33.6
22.5
21.0
19.8
18.3
16.9
26.2

300
556
230
309
179
86
116
203
194
124
61
85
64
69
89
97
49
105
74
24
56
7
73
34
18
65
62
30
109
110
37
70
43
93
114
55
25
26
32
32
55
16
46
79
45
27
57
31
14
30

37.0
90.9
50.2
31.9
149.3
29.1
36.3
98.1
32.4
121.4
66.6
67.2
132.9
30.8
76.7
39.0
35.7
115.1
35.0
18.7
172.7
21.0
101.2
97.2
17.4
102.6
138.6
29.6
107.8
69.9
17.4
100.4
42.3
119.3
143.3
120.2
21.0
41.7
73.3
26.4
92.6
25.8
35.3
44.2
132.3
21.1
114.9
73.3
18.1
34.4

Source: Urban Institute Health Insurance Policy Simulation Model.

6

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 Notes: ACA = Affordable Care Act. Diff. = difference. These cities are the most populous census-designated places and are listed
in descending order by size.

Without the ACA, the share of the population uninsured would jump in all income, race, ethnic, and
age categories (Holahan, Blumberg, and Buettgens 2019). The largest increases would occur among
people whose family incomes are below 138 percent of the federal poverty level (FPL): under ACA
repeal, their national uninsurance rate would grow from 18 percent under current law to 31 percent
(figure 2). In states that expanded Medicaid, the uninsurance rate for this income group would more
than double, jumping from 13 to 30 percent (data not shown). Likewise, the national share of uninsured
people in families whose incomes fall between 138 and 200 percent of FPL would climb from 15 to 26
percent. Such low-income people have very few alternatives for obtaining health insurance without the
ACA. Uninsurance rates among higher-income people would increase as well, but by smaller
magnitudes.
FIGURE 2

Uninsurance Rates under Current Law and Full ACA Repeal by Family Income Relative to Poverty,
Nonelderly Population, 2019
Current law

ACA repeal
31%
26%

18%
15%

15%
10%
5%

3%

< 138% of FPL

138–200% of FPL

200–400% of FPL

> 400% of FPL
URBAN INSTITUTE

Source: Urban Institute Health Insurance Policy Simulation Model.
Notes: ACA = Affordable Care Act. FPL = federal poverty level.

The number of uninsured people would rise within each racial and ethnic group if the ACA were
repealed (figure 3). The share of uninsured Hispanic individuals and families would grow from 21 to 31
percent, nearly one-third of that population. Uninsurance among black people would increase from 11
to 20 percent, one-fifth of that population.

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

7

 FIGURE 3

Uninsurance Rates under Current Law and Full ACA Repeal by Race and Ethnicity, Nonelderly
Population, 2019
Current law

ACA repeal
31%

21%

20%
18%

14%

11%

10%

8%

Non-Hispanic white

Hispanic

Non-Hispanic black

Other
URBAN INSTITUTE

Source: Urban Institute Health Insurance Policy Simulation Model.
Note: ACA = Affordable Care Act.

In the wake of a final judicial decision overturning the ACA, the share of uninsured nonelderly
adults would also increase within each age group (figure 4). Uninsurance would climb from 17 to 29
percent of all young adults ages 19 to 34. Among adults ages 35 to 54, uninsurance would rise from 13
to 21 percent. The percentage of uninsured older adults, ages 55 to 64, would double in the wake of an
ACA rollback, increasing from 8 to 16 percent. Children, from birth to age 18, would be less affected by
elimination of the ACA, because broad Medicaid and Children’s Health Insurance Program eligibility
rules for children were established before the ACA and would remain in place despite ACA repeal.

8

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 FIGURE 4

Uninsurance Rates under Current Law and Full ACA Repeal by Age Group, Nonelderly Population,
2019
Current law

ACA repeal
29%

21%
17%

16%
13%

6%

8%

7%

Birth to 18

19–34

35–54

55–64
URBAN INSTITUTE

Source: Urban Institute Health Insurance Policy Simulation Model.
Note: ACA = Affordable Care Act.

The Estimated Effects of Full Repeal on Federal
Health Care Spending
Federal spending on Medicaid and premium tax subsidies in the Marketplaces would drop by billions of
dollars if the ACA were upended (table 3). We estimate federal spending would have shrunk by about
$134.7 billion in 2019 if the ACA had been eliminated at the start of this year. Those reductions vary
widely by state and are driven by Medicaid expansion decisions and state populations. The biggest
losses in federal health care spending would accrue to states that expanded Medicaid under the ACA.
California would forgo $22.4 billion (45.8 percent) and New York $10.1 billion (36.4 percent) in 2019
under an ACA rollback. Kentucky, Michigan, Ohio, Pennsylvania, Virginia, and Washington would each
sustain losses in federal spending ranging from about $4.2 to $5.2 billion (31 to 54 percent).
Nonexpansion states would experience smaller losses than expansion states. In 2019 dollars, federal
spending would fall by $9.3, $6.5, and $4.6 billion (21 to 41 percent) in Florida, Texas, and North
Carolina, respectively, if the ACA had been eliminated by judicial ruling at the start of 2019.

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

9

 TABLE 3

Federal Spending on Marketplace Subsidies and Medicaid/CHIP Acute Care under Current Law and
Full ACA Repeal by State, Nonelderly Population, 2019
CURRENT LAW

Expansion states
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Hawaii
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Montana
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Dakota
Ohio
Oregon
Pennsylvania
Rhode Island
Vermont
Virginia
Washington
West Virginia
Nonexpansion states
Alabama
Florida
Georgia
Idaho
Kansas
Mississippi
Missouri
Nebraska
North Carolina
Oklahoma
South Carolina
South Dakota
Tennessee
Texas
Utah
Wisconsin
Wyoming
Total

Millions of $

Millions of $

259,209
1,212
10,810
5,179
48,893
5,940
4,661
1,413
1,411
1,139
9,133
8,307
3,798
8,650
7,637
1,942
6,927
7,617
13,707
6,404
2,218
3,076
951
6,687
5,254
27,920
488
14,243
5,838
15,795
1,303
1,146
8,631
7,949
2,929
130,531
5,009
22,825
10,149
1,869
2,091
4,673
8,001
1,691
15,097
4,746
5,388
826
8,196
31,271
3,179
4,970
553
389,740

159,049
672
8,691
3,401
26,491
3,128
2,810
1,111
1,130
833
6,136
5,261
2,401
4,504
4,030
1,446
3,988
5,900
8,516
4,563
1,126
1,906
586
3,989
3,089
17,770
309
9,829
3,286
10,743
794
976
3,953
3,799
1,884
95,973
3,853
13,483
7,830
1,274
1,546
3,956
6,841
917
10,527
3,510
3,734
626
6,609
24,815
2,188
3,953
310
255,022

FULL ACA REPEAL
Difference from Current Law
Millions of $
%
-100,160
-540
-2,119
-1,778
-22,403
-2,812
-1,851
-302
-281
-305
-2,997
-3,046
-1,398
-4,146
-3,606
-495
-2,939
-1,718
-5,191
-1,841
-1,092
-1,170
-366
-2,698
-2,165
-10,149
-180
-4,414
-2,552
-5,052
-509
-169
-4,679
-4,150
-1,045
-34,559
-1,155
-9,342
-2,318
-594
-545
-717
-1,161
-774
-4,570
-1,236
-1,653
-200
-1,586
-6,456
-991
-1,017
-243
-134,718

-38.64
-44.5
-19.6
-34.3
-45.8
-47.3
-39.7
-21.4
-19.9
-26.8
-32.8
-36.7
-36.8
-47.9
-47.2
-25.5
-42.4
-22.5
-37.9
-28.7
-49.2
-38.1
-38.4
-40.3
-41.2
-36.4
-36.8
-31.0
-43.7
-32.0
-39.1
-14.8
-54.2
-52.2
-35.7
-26.48
-23.1
-40.9
-22.8
-31.8
-26.1
-15.3
-14.5
-45.8
-30.3
-26.0
-30.7
-24.2
-19.4
-20.6
-31.2
-20.5
-43.9
-34.6

Source: Urban Institute Health Insurance Policy Simulation Model.

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IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 Notes: CHIP = Children’s Health Insurance Program. ACA = Affordable Care Act.

The Estimated Effects of Full Repeal on Total Health Care
Spending and Demand for Uncompensated Care
Providers would face serious financial consequences if the ACA were overturned by judicial decision. As
patients lose insurance coverage and federal spending falls, total health care spending and provider
revenues also decline. Without insurance, people use less health care. Simultaneously, many seek
uncompensated care from providers, by requesting free or reduced-price care or failing to pay medical
bills in full. These twin effects reduce provider revenues and place new financial pressures on those
providing services to the uninsured.
Accounting for all private insurance claims paid, Medicaid spending on health care services, and
household out-of-pocket spending by insured and uninsured people, we estimate that total health care
spending for the nonelderly population would have fallen from $1.9 to $1.8 trillion, a drop of $94.6
billion (or 5 percent) had the ACA been overturned at the start of 2019 (table 4). This decline would be
distributed across hospitals ($38.0 billion decline), physician practices ($11.5 billion decline), other
services ($24.3 billion decline), and drug manufacturers ($20.8 billion decline).
From 2019 to 2028, the drop in total health care spending by the nonelderly population would total
$1.3 trillion (about 6 percent), declining from $23.3 to $22.0 trillion (table 4), if the ACA had been
repealed at the start of this period. Revenues would fall by $510 billion for hospitals, $180 billion for
physician practices, $360 billion for other services, and $290 billion for drug manufacturers.
Simultaneously, the amount of uncompensated care sought by the nonelderly population would
nearly double from about $61.3 billion to $111.4 billion, if the ACA had been overturned at the start of
2019. This $50.1 billion increase would be distributed across hospitals ($14.8 billion increase), physician
practices ($5.9 billion increase), other services ($19.3 billion increase), and drug manufacturers ($10.2
billion increase). Our estimates of uncompensated care reflect the amount of such care sought (not
always fully met) by uninsured people and others with inadequate coverage (see the methods section
for more information).
If the ACA had been repealed at the start of that 10-year period, the amount of uncompensated
care sought by the nonelderly population would climb by about $580 billion (181 percent), from $700
billion to $1,280 billion. That increase in uncompensated care sought would be distributed across
hospitals ($170 billion increase), physicians ($70 billion increase), other services ($220 billion increase),
and drug manufacturers ($120 billion increase).

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

11

 TABLE 4

Health Care Spending under Current Law and Full ACA Repeal, Nonelderly Population, 2019 and
2019–28
Billions of dollars
2019

Current-law ACA
Full ACA repeal
Difference

Total health
care spending
1,862.1
1,767.5
-94.6

Hospitals

Physician
practices

Other
services

Prescription
drug
manufacturers

673.8
635.8
-38.0

299.4
287.9
-11.5

476.2
451.9
-24.3

412.7
391.9
-20.8

Other
services

Prescription
drug
manufacturers

5,960
5,600
-360

5,130
4,840
-290

2019–28

Current-law ACA
Full ACA repeal
Difference

Total health
care spending

Hospitals

Physician
practices

23,320
21,980
-1,340

8,460
7,950
-510

3,760
3,580
-180

Source: Urban Institute Health Insurance Policy Simulation Model.
Notes: ACA = Affordable Care Act. Health care spending includes private insurance claims, spending by Medicaid, and household
out-of-pocket health spending. Other services include spending on nonphysician providers, dental, home health care, and medical
equipment.

TABLE 5

Uncompensated Care Sought under Current Law and Full ACA Repeal, Nonelderly Population, 2019
and 2019–28
Billions of dollars
2019

Current-law ACA
Full ACA repeal
Difference

Total
uncompensated
care

Hospitals

Physician
practices

Other
services

Prescription
drug
manufacturer
s

61.3
111.4
50.1

18.0
32.8
14.8

7.8
13.7
5.9

23.3
42.6
19.3

12.1
22.3
10.2

2019–28

Current-law ACA
Full ACA repeal
Difference

Total
uncompensated
care

Hospitals

Physician
practices

Other
services

Prescription
drug
manufacturer
s

700
1,280
580

210
380
170

90
160
70

270
490
220

140
260
120

Source: Urban Institute Health Insurance Policy Simulation Model.
Notes: ACA = Affordable Care Act. Health care spending includes private insurance claims, spending by Medicaid, and household
out-of-pocket health spending. Other services include spending on nonphysician providers, dental, home health care, and medical
equipment.

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IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 Key Methodological Assumptions
We generated our estimates using the Urban Institute’s Health Insurance Policy Simulation Model, and
the methods follow those used in previous publications (Blumberg et al. 2019; Holahan, Blumberg, and
Buettgens 2019). Our estimates assume that pre-ACA Medicaid coverage expansion waivers would be
reinstated following ACA repeal in the seven states that had these waivers (Arizona, Delaware, Hawaii,
Massachusetts, New York, Vermont, and Wisconsin). Whether the federal government would approve
waivers to restore pre-ACA coverage levels in these states is unclear. Without reinstating these
waivers, repeal could lead to 1.3 million more uninsured people, in addition to the 20 million people who
would become uninsured if the waivers were renewed (Blumberg et al. 2019).
A special feature of the Health Insurance Policy Simulation Model is its ability to estimate changes
in total health care spending and changes in the value of uncompensated care sought by uninsured
people from providers. Estimates of health care spending include insurance claims paid by private
insurance, Medicaid spending on health care services, and household out-of-pocket spending by insured
and uninsured people. Spending by other government programs, such as Medicare, Indian Health
Services, and military insurance, is excluded from these calculations. Estimates of uncompensated care
sought are based on historical medical expenditure data and illustrate the potential increase in demand
for free care that providers would face if the ACA were eliminated. We note that the free care sought by
the uninsured is not necessarily provided in full; some of the care sought will further increase unmet
need.
Estimates presented here are for 2019 and reflect the changes that would have occurred had the
ACA been repealed at the start of the calendar year. Spending estimates are in 2019 dollars.

Conclusion
If the Supreme Court ultimately finds for the plaintiffs in Texas v. US, the full ACA would effectively be
repealed. This would have vast consequences that would be felt throughout the US health care system,
which we cannot measure here. In this analysis, we show that the resulting declines in health coverage
and federal spending on health care would affect every state and locality, though the size of the impact
would vary. Reductions in health coverage and federal spending combined with a growing demand for
uncompensated health care would have important financial consequences for state and local
governments and health care providers. Additionally, reversing the insurance coverage gains achieved
under the ACA would reduce access to health care for those losing coverage.

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

13

 References
Blavin, Fredric. 2016. “Association between the 2014 Medicaid Expansion and US Hospital Finances.” JAMA 316
(14): 1475–83. https://doi.org/10.1001/jama.2016.14765.
Blavin, Fredric. 2017. “How Has the ACA Changed Finances for Different Types of Hospitals? Updated Insights
from 2015 Cost Report Data.” Washington, DC: Urban Institute.
Blumberg, Linda J., Matthew Buettgens, John Holahan, and Clare Wang Pan. 2019. “State-by-State Estimates of the
Coverage and Funding Consequences of Full Repeal of the ACA.” Washington, DC: Urban Institute.
Fernandez, Bernadette. 2010. “Self-Insured Health Insurance Coverage.” Washington, DC: Congressional Research
Service.
Holahan, John, Linda J. Blumberg, and Matthew Buettgens. 2019. “The Potential Implications of Texas v. United
States: How Would Repeal of the ACA Change the Likelihood That People with Different Characteristics Would
Be Uninsured?” Washington, DC: Urban Institute.
Lindrooth, Richard C., Marcelo C. Perraillon, Rose Y. Hardy, and Gregory J. Tung. 2018. “Understanding the
Relationship between Medicaid Expansions and Hospital Closures.” Health Affairs 37 (1): 111–20.
https://doi.org/10.1377/hlthaff.2017.0976.
Rhodes, Jordan H., Thomas C. Buchmueller, Helen G. Levy, and Sayeh S. Nikpay. 2019. “Heterogeneous Effects of
the ACA Medicaid Expansion on Hospital Financial Outcomes.” Contemporary Economic Policy. Published ahead
of print, April 10, 2019. https://doi.org/10.1111/coep.12428.
Ward, Brian W., Jeannine S. Schiller, and Richard A. Goodman. 2014. “Multiple Chronic Conditions among US
Adults: A 2012 Update.” Preventing Chronic Disease: Public Health Research, Practice, and Policy 11.
https://doi.org/10.5888/pcd11.130389.

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IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 About the Authors
Jessica S. Banthin is a senior fellow in the Health Policy Center at the Urban Institute, where she studies
the effects of health insurance reform policies on coverage and costs. Before her arrival at the Urban
Institute, she served more than 25 years in the federal government, most recently as deputy assistant
director for health at the Congressional Budget Office. During her eight-year term at the Congressional
Budget Office, Banthin directed the production of numerous major cost estimates of legislative
proposals to modify the Affordable Care Act. She led the development of a new microsimulation model
based on cutting-edge technology and managed a portfolio of research on health policy topics
requested by Congress. Banthin has contributed to many Congressional Budget Office reports and
written extensively about how reform proposals can affect individuals’ and families’ incentives to enroll
in coverage, influence employers’ decisions to offer coverage to their employees, and improve insurance
market competitiveness. In her recent work, Banthin has written on the accuracy of various data
sources used in modeling health reforms. Banthin has also conducted significant work on the financial
burden of health care premiums and out-of-pocket costs on families and published in scientific journals
on this topic. She has special expertise in the design of microsimulation models for analyzing health
insurance coverage and a deep background in the design and use of household and employer survey
data. Banthin’s experience in estimating the effects of health reform on cost and coverage extend back
to her service on the President’s Task Force on National Health Care Reform in 1993. She earned her
PhD in economics from the University of Maryland at College Park and her AB from Harvard University.
Linda J. Blumberg is an Institute Fellow in the Health Policy Center. She is an expert on private health
insurance (employer and nongroup), health care financing, and health system reform. Her recent work
includes extensive research related to the Affordable Care Act (ACA); in particular, providing technical
assistance to states, tracking policy decisionmaking and implementation at the state and federal levels,
and interpreting and analyzing the implications of particular policies. Examples of her work include
analyses of the implications of congressional proposals to repeal and replace the ACA, delineation of
strategies to fix problems associated with the ACA, estimation of the cost and coverage potential of
high-risk pools, analysis of the implications of the King v. Burwell case, and several studies of competition
in ACA Marketplaces. In addition, Blumberg led the quantitative analysis supporting the development of
a “Road Map to Universal Coverage” in Massachusetts, a project with her Urban colleagues that
informed that state’s comprehensive health reforms in 2006. Blumberg frequently testifies before
Congress and is quoted in major media outlets on health reform topics. She serves on the Cancer Policy
Institute’s advisory board and has served on the Health Affairs editorial board. From 1993 through 1994,
she was a health policy adviser to the Clinton administration during its health care reform effort, and
she was a 1996 Ian Axford Fellow in Public Policy. Blumberg received her PhD in economics from the
University of Michigan.
Matthew Buettgens is a senior fellow in the Health Policy Center, where he is the mathematician
leading the development of Urban’s Health Insurance Policy Simulation Model (HIPSM). The model is
currently being used to provide technical assistance for health reform implementation in
Massachusetts, Missouri, New York, Virginia, and Washington as well as to the federal government. His

IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

15

 recent work includes a number of research papers analyzing various aspects of national health
insurance reform, both nationally and state by state. His research topics have included the costs and
coverage implications of Medicaid expansion for both federal and state governments; small firm selfinsurance under the Affordable Care Act and its effect on the fully insured market; state-by-state
analysis of changes in health insurance coverage and the remaining uninsured; the effect of reform on
employers; the affordability of coverage under health insurance exchanges; and the implications of age
rating for coverage affordability. Buettgens was previously a major developer of the Health Insurance
Reform Simulation Model—the predecessor to HIPSM—used in the design of the 2006 “Road Map to
Universal Coverage” in Massachusetts.
John Holahan is an Institute fellow in the Health Policy Center, where he previously served as center
director for over 30 years. His recent work focuses on health reform, the uninsured, and health
expenditure growth, developing proposals for health system reform most recently in Massachusetts. He
examines the coverage, costs, and economic impact of the Affordable Care Act (ACA), including the
costs of Medicaid expansion and the macroeconomic effects of the law. He has also analyzed the health
status of Medicaid and exchange enrollees and the implications for costs and exchange premiums.
Holahan has written on competition in insurer and provider markets and implications for premiums and
government subsidy costs as well as on the cost-containment provisions of the ACA. Holahan has
conducted significant work on Medicaid and Medicare reform, including analyses on the recent growth
in Medicaid expenditures, implications of block grants and swap proposals on states and the federal
government, and the effect of state decisions to expand Medicaid in the ACA on federal and state
spending. Recent work on Medicare includes a paper on reforms that could both reduce budgetary
impacts and improve the structure of the program. His work on the uninsured explores reasons for the
growth in the uninsured over time and the effects of proposals to expand health insurance coverage on
the number of uninsured and the cost to federal and state governments.
Clare Wang Pan is a research analyst in the Health Policy Center, where she works primarily on the
Health Insurance Policy Simulation Model. Pan holds a master of public policy from the McCourt School
of Public Policy at Georgetown University.
Robin Wang is a research analyst in the Health Policy Center, where he helps develop Urban’s Health
Insurance Policy Simulation Model. The model provides technical assistance for health reform
implementation in Massachusetts, Missouri, New York, Virginia, and Washington, as well as to the
federal government. He is an MPA graduate of the London School of Economics and Political Science.

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IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

 Acknowledgments
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. We are grateful to them and to all our
funders, who make it possible for Urban to advance its mission.
The views expressed are those of the authors and should not be attributed to the Urban Institute,
its trustees, or its funders. Funders do not determine research findings or the insights and
recommendations of Urban experts. Further information on the Urban Institute’s funding principles is
available at urban.org/fundingprinciples.

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IMPLICATIONS OF THE FIFTH CIRCUIT COURT DECISION IN TEXAS V. UNITED STATES

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