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Trump's DOJ Argues Key ACA Provisions Unconstitutional

Analysis  |  By Steven Porter  
   June 08, 2018

The federal government is siding with conservative states in a challenge of the Obama administration's signature healthcare law.

In perhaps its biggest move yet to axe the Affordable Care Act, the Trump administration has announced that it will not defend key provisions of the Obama-era healthcare law against a legal challenge.

Weighing in on a lawsuit brought by 20 conservative states, the U.S. Department of Justice urged a federal judge Thursday evening to find two of the ACA's provisions unconstitutional on the basis that they are inextricably linked to the law's individual mandate.

Although the Supreme Court declared the mandate constitutional in 2012, it did so on the basis that the mandate qualifies as a tax. Since lawmakers passed a tax reform package late last year that zeroed out the mandate's financial penalty effective January 1, 2019, it will no longer be accurate next year to describe the mandate as a tax, rendering the provision unconstitutional, the DOJ argued.

Additionally, the DOJ's filing argued that the individual mandate cannot be severed from the ACA's community-rating and guaranteed-issue provisions. Among other things, these provisions protect beneficiaries with preexisting conditions from being locked out of coverage.

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"This question of statutory interpretation does not involve the ACA's constitutionality and therefore does not implicate the Department's general practice of defending the constitutionality of federal law," Attorney General Jeff Sessions wrote in a letter Thursday to House Speaker Paul Ryan. "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."

  • Obama's team shocked: Andy Slavitt, who ran the Centers for Medicare & Medicaid Services during the previous administration, described the DOJ's filing as the "biggest health care news of the year."
  • Three attorneys quit: Shortly before the DOJ's filing, three career DOJ attorneys quit the case. They were replaced by two political appointees, as the Associated Press reported.
  • Legal scholars dubious: Jonathan H. Adler, director of the Center for Business Law & Regulation at Case Western Reserve University School of Law in Cleveland—who has argued in past years that the ACA's implementation overstepped its legal authority—took issue with the DOJ's argument. "The problem with the Trump Administration's response to the latest ACA suit is not its refusal to defend the mandate so much as its adoption of problematic (and quite cynical) approach to severability," Adler wrote in a tweet. "No matter how one conceives of severability doctrine, the underlying premise here is absurd," he added.
  • Legal scholars taken aback: Nicholas Bagley, who teaches health law at the University of Michigan, wrote that he was astounded by the DOJ's abandonment of a longstanding and bipartisan commitment to defending the law when arguments can be made that aren't frivolous. "I am at a loss for words to explain how big of a deal this is," he wrote, arguing that this case is substantially different from the Obama administration's decision in 2011 to quit defending the Defense of Marriage Act.
  • Not so fast: "To be clear, the ACA remains intact, and will remain intact for the foreseeable future. This case is not going anywhere fast, and the likelihood that the Supreme Court endorses this travesty of an argument is slim," Bagley wrote in a tweet.
  • Liberal states file challenge: Sixteen state attorneys general, led by California's Xavier Becerra, announced Thursday a challenge to the plaintiffs seeking to undo the ACA. "The lawsuit initiated by Texas is dangerous and reckless and would destroy the ACA as we know it. It would leave millions of Americans without access to affordable, quality healthcare. It is irresponsible and puts politics ahead of working families," Becerra said in a statement.
  • Potential consumer impact: The Kaiser Family Foundation estimated in 2016 that 27% of American adults under age 65 have health conditions "that would likely leave them uninsurable if they applied for individual market coverage under pre-ACA underwriting practices that existed in nearly all states." Many in this group have insurance through work, so they wouldn't automatically lose access to coverage, the KFF noted.

Politico's Renuka Rayasam noted that the DOJ is asking the judge to dismantle two of the ACA's most popular provisions—but to wait until after the midterms this fall to do so.

180607 HHS Sides Against ACA in Suit by HLMedit on Scribd

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

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