Editor's note: This story has been updated.
Taking a harder line on health care, the Trump administration on Wednesday joined a coalition of Republican-led states, including Indiana, in asking a federal appeals court to entirely overturn former President Barack Obama’s signature health care law — a decision that could leave millions uninsured.
Congress rendered the Affordable Care Act completely unconstitutional in 2017 by eliminating an unpopular tax penalty for not having insurance, the administration and GOP states told the court.
The “Obamacare” opponents hope to persuade the 5th Circuit Court of Appeals in New Orleans to uphold District Court Judge Reed O’Connor’s ruling late last year striking down the law.
If the ruling is allowed to stand, more than 20 million Americans would be at risk of losing their health insurance, re-igniting a winning political issue for Democrats heading into the 2020 elections. President Donald Trump, who never produced a health insurance plan to replace “Obamacare,” is now promising one after the elections.
The Trump administration acknowledged it had changed positions in the case. Early on, the administration argued only certain key parts of the ACA, such as protections for people with pre-existing medical conditions, should be invalidated. But it said other important provisions such as Medicaid expansion, subsidies for premiums and health insurance markets could continue to stand.
Wednesday, the administration said it had reconsidered in light of O’Connor’s ruling. “The remaining provisions of the ACA should not be allowed to remain in effect — again, even if the government might support some individual positions as a policy matter,” the administration wrote in its court filing.
The Justice Department’s legal brief also seemed to be trying to carve out some exceptions. For example, the administration said the ACA’s anti-fraud provisions should remain in effect.
The now-repealed fines enforce the law’s insurance requirement, and without them the rest of the law cannot pass constitutional muster, the administration wrote.
O’Connor’s ruling last December came in a case filed by Texas and a coalition of Republican-led states. He said that without a tax penalty, the law’s requirement that most Americans have insurance is unconstitutional. Democratic attorneys general, led by California’s Xavier Becerra, and the U.S. House of Representatives have appealed.
Legal battles aside, the Obama health law has remained remarkably stable. Even with the repeal of the law’s tax penalty, 11.4 million people signed up for coverage this year, just a slight dip from 2018. The law’s Medicaid expansion continues to insure about 12 million low-income people. And several million young adults are on their parents’ health insurance as a result of the ACA.
The appeals court is expected to hold oral arguments in July. Meanwhile, the effects of the lower court ruling have been on hold pending appeals.
The last word on any decision to strike down the health care law almost certainly will come from the Supreme Court, which has twice sustained the 2010 health law. Chief Justice John Roberts and four more liberal justices who voted in favor of the law remain on the court. A court victory would fulfill Trump’s goal of undoing the law, but it could be politically costly for the GOP by ending popular provisions such as protection for pre-existing conditions and coverage for young adults on their parents’ health plans.
The states took the same position as the administration.
“At issue is not what health-insurance system is optimal, but ‘only whether Congress has the power under the Constitution’ to command the people as the ACA does,” the states wrote in their brief.
Indiana Attorney General Curtis Hill added Indiana to the Republican lawsuit early on but has endured criticism for that move. Even so, Hill was among those who praised O'Connor's ruling striking the health care law.
In a statement released Thursday, Hill called on "leaders at all levels of government" to "work to craft sensible and effective health care policies."
"The Affordable Care Act had previously been determined constitutional because of the tax penalty accompanying the individual mandate, which fell under the taxing authority of Congress," Hill said in the statement. "When Congress eliminated the tax penalty, the individual mandate lost the constitutional leg on which it stood."
"All Americans – not just the 85 to 90 percent covered by their employers and/or Medicare/Medicaid – should have access to quality health care that they can afford," he continued. "Congress and the individual states must develop sound constitutional policies that safeguard the health care needs of all individuals, including those with pre-existing conditions."
In their appeal, Becerra and his coalition argued that zeroing out the penalty does not make the individual mandate unconstitutional — noting the framework for the tax remains in place.
Becerra was defiant Wednesday. “Our legal coalition will vigorously defend the law and the Americans President Trump has abandoned,” he said in a statement.
Even if the individual mandate were unconstitutional, the law’s defenders argued in briefs earlier this year that the rest of the law remains legally viable.
They said that when Congress repealed the tax penalty for those remaining uninsured, it was more like a tweak than a blow designed to bring down the entire 974-page statute. The health law also rewrote federal laws on a broad range of topics, from fighting fraud to promoting public health.
After the fines were repealed, Republican lawmakers in Congress explained their votes as an attempt to correct the law’s most unpopular provision, not bring down the entire law.
Democrats also argue that if the law is to be repealed and replaced, that’s the job of Congress and the president under the Constitution, not the courts.