The Trump administration argued in a court brief filed on Thursday that Obamacare’s protections for preexisting conditions should be ruled unconstitutional, opening up another front in the White House’s crusade to roll back the law’s core insurance reforms.
The brief was filed in a case brought by several conservative states, led by Texas, which argued that because Republicans in Congress repealed Obamacare’s individual mandate penalty in their tax bill, the mandate is now unconstitutional — and so is the rest of the law.
The lawsuit argued that without an actual monetary fine for not having health insurance, the mandate should be considered illegal under the rationale used by Chief Justice John Roberts to uphold the law in the famous 2012 lawsuit. Roberts had said that Congress could not order people to buy insurance, but that it could impose a tax penalty on them for not having insurance, which allowed the mandate and the rest of the law to stand and take effect. Without the financial penalty, repealed in the tax bill, the Republican-led states argued the requirement to buy insurance cannot legally stand. Because the mandate is so crucial to Obamacare, they continued, the whole law should be found unconstitutional too.
Usually, a presidential administration defends current law, but the Trump administration took a different tack, agreeing with the conservative states that the mandate and, with it, the law’s rules that prohibits insurers from denying people health insurance or charging them higher rates should now be found unconstitutional. However, the Justice Department lawyers told the court that the rest of the law could stand, including the law’s massive expansion of Medicaid to millions of the nation’s poorest citizens.
If the Trump administration’s argument were to prevail, insurers could once again be able to flat-out deny Americans insurance based on their health status. No amount of federal subsidies would protect them. Medicaid expansion would remain, but the private insurance market would no longer guarantee coverage to every American.
To be clear, the litigation’s success is far from assured. Many legal scholars have long thought the lawsuit, first filed in February, is spurious and that higher courts — up to and including the Supreme Court, which has upheld Obamacare against existential legal threats on several prior occasions — would not take it seriously. Protections against preexisting conditions also remain one of the most popular provisions in the law, and openly attacking them might lead to severe political backlash for Republicans during an election year that Democrats already want to focus on health care.
The Trump administration’s position also doesn’t necessarily change the legal ground all that much, as several Democratic-led states had already stepped in to defend Obamacare in the case.
Nevertheless, the brief sends a strong signal that the Trump administration believes the central insurance reforms in the ACA should be totally undone. The administration has, of course, taken regulatory steps to undermine those rules — such as expanding short-term plans that don’t have to comply with the reforms — but it is now seeking a different avenue, outside of Congress, to end them for good.
While the lawsuit must play out in the slow grind of the courts, health insurers are setting their Obamacare insurance rates for 2019. Some plans are already hiking premiums by 30 percent or more after the uncertainty introduced by the Trump administration and the GOP Congress. More uncertainty engendered by this lawsuit and the administration’s position is not going to help.
“Any time there’s uncertainty about the future, insurers are going to build extra cushion into their premiums to make sure they get revenues while they can,” Larry Levitt, senior vice president at the Kaiser Family Foundation, told me.
There is one other notable thing about the Trump administration’s brief: As the University of Michigan’s Nicholas Bagley noted, several career federal lawyers withdrew from the case shortly before the brief was filed. He told me that was highly unusual and suggested the attorneys thought the Trump administration’s arguments were “meritless.”
“You take your name off a brief because you believe the arguments being made are not good-faith arguments,” Bagley said.
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