Obamacare Fate in Limbo as Mandate Tossed, Court Fight Rages On

The fate of the Affordable Care Act was thrown back into limbo after a federal appeals court found a key piece of the original law unconstitutional, then kicked the case back to the judge who struck it down a year ago.

Final resolution on whether former President Barack Obama’s signature health-care law lives or dies probably won’t come before the 2020 elections. The fight could still end up before the U.S. Supreme Court. For now, the ruling leaves intact access to health care for millions of Americans, who face the loss of coverage if the law is wiped out entirely.

U.S. District Judge Reed O’Connor in Fort Worth, Texas, who has ruled against Obamacare multiple times, was tasked by a divided three-judge panel Wednesday with parsing through which parts of the law could stand on their own and which must fall, because they relied upon the unconstitutional provision requiring people to have health insurance, known as the individual mandate.

By leaving the law in limbo, the appeals court’s decision will stoke further political debate. On one side is a Texas-led coalition of mostly Republican states and the Trump administration fighting to kill Obamacare. On the other is a band of mostly Democrat-led states and the U.S. House of Representatives. Democratic lawmakers jumped in to defend Obamacare when Trump refused.

House Speaker Nancy Pelosi called the ruling a “chilling threat” while Senate Minority Leader Chuck Schumer described it as “cowardly” and California Attorney General Xavier Becerra vowed “to move swiftly to challenge the decision.”

President Donald Trump said it’s a “win for all Americans” that the court struck down the Obamacare requirement that people buy insurance even if they don’t want it. Trump also took the opportunity to play to his conservative base and blast the “radical left” health-care policies of Democratic presidential contenders, saying their proposals “would strip Americans of their current coverage.”

Health scholars who support Obamacare say the writing is on the wall for the next ruling from O’Connor, a former prosecutor and aide to Republican senators who was appointed to the bench by former President George W. Bush.

“He’s going to say very substantial parts of the Affordable Care Act are invalid,” said Nicholas Bagley, a professor at University of Michigan Law School. “He’s already made that determination, so there’s really no uncertainty about what Judge O’Connor will say.”

Read More: Bush Judge in Northern Texas Was Go-To Guy to Gut Obamacare

During oral arguments, the appellate judges complained O’Connor hadn’t done a thorough analysis and that it wasn’t their job to complete his homework. Complicating matters, the Trump administration changed its position on how much of the law can be salvaged after O’Connor issued his decision last December.

In its ruling, the panel instructed O’Connor to review the law with a “finer-tooth comb” and address the Trump administration’s suggestion that only some Obamacare elements that actually harmed the states should be thrown out, or that the ACA should be blocked only in the states that challenged the law.

Critics of Trump’s piecemeal proposal point out it would lead to a hodgepodge of different health-care plans and inconsistent coverage state by state, effectively throwing the multibillion-dollar U.S. health care industry into chaos.

Wednesday’s majority opinion was written by U.S. Circuit Judge Jennifer Elrod, who was appointed by George W. Bush to the New Orleans-based appeals court, and joined by Kurt Engelhardt, an appointee of Trump.

In a dissenting opinion, U.S. Circuit Judge Carolyn Dineen King, an appointee of Jimmy Carter, criticized her colleagues for being “unwilling” to resolve whether the rest of the law can be saved without the mandate to buy insurance.

She said the court “merely identifies serious flaws in the district court’s analysis” and sends the case back for a “do-over, which will unnecessarily prolong this litigation and the concomitant uncertainty over the future of the healthcare sector.”

The case is Texas v. U.S., 19-10011, U.S. Court of Appeals for the Fifth Circuit (New Orleans).

(Updates with comments by political leaders)

--With assistance from Tom Korosec.

To contact the reporters on this story:
Lydia Wheeler in Arlington at ldavenport15@bloomberg.net;
John Tozzi in New York at jtozzi2@bloomberg.net;
Laurel Calkins in New York at lcalkins@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Peter Blumberg

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