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Analysis

DOJ Drops Its Partial ACA Defense, Argues Entire Law Should Fall

By Steven Porter  
   March 25, 2019

After previously arguing that most of the sprawling healthcare legislation should stand, even if its individual mandate falls, the DOJ changed course.

The U.S. Department of Justice signaled in a court filing Monday evening that its position on the validity of the Affordable Care Act has shifted.

The DOJ had argued in District Court proceedings last fall that most of the sprawling healthcare legislation should remain intact, even if the ACA's individual mandate were to be struck down in light of Congress zeroing out its tax penalty. Only the ACA's community-rating and guaranteed-issue provisions—which protect consumers with preexisting conditions—should fall with the mandate, the DOJ had argued.

District Judge Reed O'Connor's decision last December went much further than the DOJ had urged, declaring the entire ACA invalid, as the Texas-led coalition of plaintiff states had requested. Now that an appeal is pending at the Fifth Circuit, however, the DOJ has decided that it agrees with the plaintiffs' argument and O'Connor's decision after all.

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The revelation came in a short letter signed by Assistant Attorney General Joseph H. Hunt, Deputy Assistant Attorney General Brett A. Shumate, and DOJ Civil Division appellate staff attorney Martin V. Totaro. It also came less than six weeks after Attorney General William Barr's swearing-in.

Barr had said during his confirmation hearing that he would "reconsider" the DOJ's position on the ACA suit. "I don't think this is what the Senators questioning him had in mind," Jonathan H. Adler, JD, director of the Center for Business Law & Regulation at Case Western Reserve University School of Law in Cleveland, wrote in a tweet Monday.

Adler, who has opposed the ACA in the past, said the DOJ's shift to this new position is "astounding" and legally unsound. This is a case in which the DOJ owes a duty to defend federal laws that are readily defensible, he argued in a blog post, adding that politics may be to blame.

"I was among those who cheered the selection of William Barr as Attorney General and hoped his confirmation would herald the elevation of law over politics within the Justice Department," Adler wrote. "I am still hopeful, but this latest filing is not a good sign."

University of Michigan law professor Nicholas Bagley, JD, who cosigned an amicus brief with Adler and others for this lawsuit, wrote in a blog post that this latest shift by the DOJ should not be mistaken for "business as usual."

"This is far beyond the pale," Bagley wrote. "And it is a serious threat to the rule of law."

While the plaintiff states and federal government defendants now agree that the entire ACA is invalid, a California-led coalition of Democratic states and the Democrat-controlled U.S. House of Representatives have intervened in the case to argue that the entire law should be upheld.

Legal wrangling aside, if the DOJ's new position ultimately prevails, canceling the ACA would bring significant and far-reaching real-world implications for the U.S. care delivery system. Not only would the ACA exchanges disappear, but Medicaid expansion in 36 states, plus D.C., would vanish as well. The number of uninsured people in the U.S. would increase by an estimated 19.9 million, according to an Urban Institute report released this month. Furthermore, the federal government would lose authorization to test out new payment models, which the Trump administration itself has been using.

Judges at the Fifth Circuit could affirm or reject the logic of O'Connor's decision, but they are not necessarily locked into a binary outcome that either upholds or strikes down the ACA in its entirety. The California-led coalition of states intervening in the lawsuit acknowledged as much in their opening brief filed Monday. Even if the judges determine that Texas and its fellow plaintiff states have standing to sue and that the ACA's individual mandate is unconstitutional—two points that the California-led intervenors dispute—they should strike down the mandate only and leave the rest of the law intact, the intervenors argue.

"By reducing the amount of the alternative tax imposed by [the mandate] to zero, Congress eliminated the only potential consequence for choosing not to maintain healthcare coverage," they wrote. "At the same time, it left every other provision of the ACA in place. In these unique circumstances, there is no need to hypothesize about whether Congress 'would have preferred' to preserve the rest of the ACA if it had known that the minimum coverage provision could not be enforced. ... That is the exact situation that the 2017 Congress itself created. In other words, in this case we already know—for certain—that Congress would 'have preferred what is left' of the ACA to 'no [Act] at all.'"

Editor's note: This story was updated Tuesday, March 26, 2019, with additional information.

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


KEY TAKEAWAYS

The plaintiffs and defendants now agree that Congress rendered the entire ACA invalid when it eliminated the individual mandate's tax penalty.

The intervenors, including a California-led coalition of states and the U.S. House of Representatives, will argue the entire ACA should be upheld.

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