Health Law & Business

Trump Administration Pushes Justices to Invalidate Obamacare (2)

June 25, 2020, 6:31 PM; Updated: June 26, 2020, 10:21 AM

The Trump administration is standing firm on its position that Obamacare should be invalidated, telling the Supreme Court in its opening brief the law is tied to one provision that’s now unconstitutional.

The Department of Justice said the entire Affordable Care Act “must fall with the individual mandate” to buy insurance, but said the “scope of relief entered in this case should be limited to provisions shown to injure” the individuals challenging the law.

The justices are set to hear arguments next term, beginning in October, in the high stakes fight over the constitutionality of President Obama’s signature health-care law. The case threatens health-care coverage for millions of Americans, many of which are newly unemployed as a result of the coronavirus pandemic.

A group of Democratic states, which stepped in to defend the law after the Trump administration refused, are appealing a Fifth Circuit decision that left the fate of the law in limbo. In a 2-1 ruling, the appeals court said the provision requiring everyone to buy insurance is unconstitutional because the 2017 Congress dropped the penalty for those that fail to comply down to $0. Without a penalty, the court said the provision was no longer a valid exercise of Congress’s taxing power.

But the court failed to answer a major question—whether the rest of the law can survive without that provision or if the entire law is tied to it and therefore unconstitutional too. Instead, the court kicked that question back to the federal judge in Texas who had already found the entire law unconstitutional.

The DOJ shocked the legal world in March 2019 when it told the U.S. Court of Appeals for the Fifth Circuit that the entire law must be struck down, after arguing in the trial court that parts of the law could survive. Several career attorneys quit over the DOJ’s shift in stance, and legal scholars from different sides of the ideological line have come together to argue against it in friend-of-the-court briefs.

The agency maintained it’s position against the law and told the high court Thursday night to send the case back to the lower court to decide which provisions actually hurt the challengers.

“It seems like the administration is trying to preserve the ability to cherry pick the parts of the law that they like and want to keep later,” said Katie Keith, a health law professor at Georgetown University.

Major and Minor Provisions

The coalition of GOP-led states, which challenged the law alongside two individuals, told the court in its opening brief that the statutory text directs this court to declare the remaining major and minor provisions of the ACA unconstitutional.

“Both Congress and the Department of Justice have repeatedly described the mandate as essential to the ACA’s community-rating and guaranteed-issue provisions. And this Court has observed that those provisions ‘would not work’ without the mandate,” the GOP states argued.

The community rating provision prevents health insurers from varying premiums or denying within a geographic area based on age, gender, or health status. The guaranteed-issue requires insures to provide coverage regardless of preexisting conditions.

“Once the individual mandate and the guaranteed issue, and community-rating provisions are invalidated, the remainder of the ACA should not be allowed to remain in effect,” DOJ argued in its brief.

Despite their claims that the law cannot function without the provision requiring everyone to buy insurance, the federal marketplace has continued to function. Almost half a million people have enrolled in Obamacare this year as a result of job loss or other reasons for losing other health coverage, according to a report issued Thursday from the Centers for Medicare & Medicaid Services. That’s up almost 50% from a year earlier, and Covid-19 is the likely reason.

After analyzing changes in health insurance enrollment, the Center for American Progress is now saying more than 23 million Americans could lose health coverage if the Supreme Court strikes down the law.

“The surge of nearly 3.4 million additional Americans at risk of losing their insurance stems from the job losses caused by the coronavirus pandemic,” the group said in a news released Wednesday.

But the GOP states repeatedly refer to the mandate as the third leg of a three-legged stool that causes the ACA to collapse if removed.

“The ACA’s text confirms that ‘the requirement [to buy health insurance] is essential to creating effective health insurance markets,’” the states argue.

The legal fight is playing out as the country grapples with a global pandemic that has killed over 124,000 people in the U.S. as of Thursday night. Proponents of the law say Americans need access to affordable health insurance now more than ever.

“The ACA has been life-changing and now through this pandemic, we can all see the value in having greater access to quality healthcare at affordable prices,” California Attorney General Xavier Becerra (D) said in a statement released ahead of the filing. “Now is not the time to rip away our best tool to address very real and very deadly health disparities in our communities.”

The GOP-led coalition criticized the Democratic states in their brief for citing the pandemic as a key reason to uphold the law.

“In the end, petitioners defend the ACA as good policy, citing the current pandemic,” they said. “Not only are those policy arguments incorrect, but they miss the point.”

The case is California v. Texas, U.S., No. 19-840, brief filed 6/25/20.

(Updates June 25 story throughout with Justice Department brief. )

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Alexis Kramer at akramer@bloomberglaw.com

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