ACA Brief: Trump Administration Shows Change in Thinking

But it's unlikely to affect outcome in Texas v. Azar, one expert says.

This article was first published on Tuesday, May 14, 2019 in MedPage Today.

By Joyce Frieden, News Editor, MedPage Today   

The recent legal brief, by the Department of Justice agreeing with a group of Republican attorneys general that the entire Affordable Care Act should be overturned, shows how the Trump Administration's position has changed over time, but it is unlikely to have a big effect on the overall outcome of the case, according to one expert.

"I doubt that it will affect the legal arguments," Bob Laszewski, president of Health Policy and Strategy Associates, a healthcare consulting firm in Alexandria, Virginia, said in an email to MedPage Today. "Both sides are well represented in terms of the legal arguments and I doubt the Justice Department will bring any new breakthrough arguments to the table. The real significance is political."

The Justice Department filed its brief on May 1 in the case of Texas v. Azar. That case was filed in February 2018 by the state of Texas along with 19 other states, all led at the time by Republican governors. It argued that because the tax reform bill passed by Congress -- the Tax Cuts and Jobs Act of 2017 -- gets rid of the ACA's "individual mandate" penalty for not having health insurance, the requirement for individuals to have health insurance is void, and because of that, the rest of the law -- which they say hinges on the mandate -- should be invalidated. Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas ruled in the plaintiffs' favor last December, but the decision has been stayed pending an appeal.

An Evolving Position

The Trump administration's position in the case has evolved. At first, the department declined to defend certain provisions of the law -- namely, its community rating and guaranteed issue provisions, as well as the mandate itself. Then-Attorney General Jeff Sessions explained in a letter written in June 2018 to then-House Speaker Paul Ryan (R-Wisc.) that community rating, which restricts the variance in the premiums that could be charged, and guaranteed issue, which requires insurers to cover everyone, both hinge on the mandate, because without the mandate, "individuals could wait until they become sick to purchase insurance, thus driving up premiums for everyone else."

But Sessions added, "Outside of these two provisions of the ACA, the department will continue to argue that [the individual mandate] is severable from the remaining provisions of the ACA" and therefore the rest of the law is valid.

In late March, however, the Justice Department changed its tune, filing a letter stating that it had determined that Judge O'Connor's decision overturning the entire law "should be affirmed." The May 1st brief explains some of the reasoning behind that decision.

"Once the individual mandate and the guaranteed-issue and community-rating provisions are invalidated, the remaining provisions of the ACA should not be allowed to remain in effect -- again, even if the government might support some individual provisions as a policy matter," wrote Assistant Attorney General Joseph Hunt and Special Counsel August Flentje, of the department's civil division.

"As the Supreme Court recently recognized when addressing a set of provisions that 'were obviously meant to work together,' once the core provisions are struck down, the others should also be invalidated if Congress would not 'have wanted [them] to stand alone,'" they continued. "Elimination of the guaranteed-issue and community-rating provisions would fundamentally alter the ACA's other insurance reforms, which were premised on the availability of uniform plans to all potential purchasers of insurance in the individual and small-group markets."

Possible Political Consequences

That stance could put Republicans in a difficult position, said Laszewski. "By arguing that the ACA should be overturned all at once without having an alternative ready, Republicans really put themselves on the defensive against Democratic arguments that Trump and the Republicans want to blow the Affordable Care Act up without an alternative. Democrats can point to pre-existing condition reforms and the Medicaid expansion being suddenly gone without the Republicans even having a plan to replace them."

Robert Field, PhD, MPH, JD, professor of health management and policy at Drexel University in Philadelphia, was not impressed by the brief. "It contorts logic beyond recognition," Field said in an email. "The administration is arguing that the mandate is unconstitutional because it has been repealed. Logic like that belongs in Alice in Wonderland."

"The brief argues that the entire ACA must be struck down because the rest of the law is inseparably intertwined with the now defunct mandate," Field said. "But the rest of the law includes dozens of provisions that bear no conceivable relationship to the mandate. How is a mandate to purchase insurance central to calorie counts on chain restaurant menus, breast feeding areas in workplaces, or generic versions of biotechnology drugs? The brief doesn't even try to provide an answer."

The case itself is a “wild card” in terms of its effect on the ACA, Jonathan Weiner, DrPH, professor of health policy and management at Johns Hopkins University, in Baltimore, said in an email. “The original ruling underscores how easy it seems to be to find a high court judge who will agree with one side or the other no matter the validity of the case. Many legal scholars view the non-severability argument as ludicrous; and I can tell you from a health policy perspective it certainly is.”

Marie Fishpaw, director of domestic studies at the Heritage Foundation, a right-leaning think tank in Washington, sees the case as an opportunity of sorts. "This court case is a good reminder that Congress still needs to return to healthcare reform in order to deal with the root causes behind American's frustration with healthcare -- high costs, fewer choices, and the ability of the sick to get care when they need it," she said in an email.

Looking Ahead

Right now, people on both sides of the aisle seem intent on replacing the law, Jonathan Oberlander, PhD, professor of social medicine at the University of North Carolina at Chapel Hill, noted in a Perspective piece in the New England Journal of Medicine (subscription required)."In key respects, Obamacare is stronger politically now than it ever has been," he wrote. "It is ironic, then, that the 2020 presidential election could see both parties nominate candidates who want to supplant the ACA."

"Trump's reelection campaign will probably embrace conservative plans to repeal the law and shift more responsibility to the states. And multiple Democratic presidential candidates have embraced Medicare for All (though some Democrats support the incremental goal of expanding Medicare eligibility to more people, which would leave the ACA largely intact)."

The next step in the case will be oral arguments before a federal appeals court. "Whichever way it rules, the losing side will likely appeal to the Supreme Court," Field predicted. "If the appeal is by the administration and those challenging the law, the Supreme Court will likely decline to hear the case. The last thing it wants is an ACA redux. If those defending the law bring the appeal, the Supreme Court is likely to hear the case and uphold the law. It is unlikely that the justices would want blame for the collapse of American healthcare and the political firestorm that would ensue."