Two Republican-appointed judges on the appeals panel hearing a Trump-backed challenge to Obamacare — a majority of the three-judge panel — suggested Tuesday that they might side with a lower court judge who said last year that the whole law should be struck down.
Lawyers from the Trump administration and a group of Republican states squared off against attorneys from a coalition of Democratic states and the House of Representatives in a New Orleans appeals court to argue the fate of the Affordable Care Act.
If the challenge is upheld, it threatens to wipe away coverage for millions of Americans, as well as the law’s protections for those with pre-existing conditions. And it would do what Congress failed to accomplish in 2017 — take down Obamacare.
Three 5th US Circuit Court of Appeals judges — one nominated by President Donald Trump, one by George W. Bush and one by Jimmy Carter — heard the arguments. Because the case is before one of the most conservative appellate courts in the country, it is almost guaranteed to wind up in the Supreme Court.
The lawsuit against the ACA was brought by 20 Republican state attorneys general and governors, as well as two individuals — though the number of attorneys general is now down to 18 after Democrats took control of Maine and Wisconsin in the midterm election last year. The challenge revolves around the congressional decision to effectively eliminate the individual mandate penalty by reducing it to $0 as part of the 2017 tax cut bill. The mandate requires nearly all Americans to get health insurance or pay a penalty.
The Republican coalition, led by Texas Attorney General Ken Paxton, maintains that the change rendered the mandate itself unconstitutional.
The states say that the voiding of the penalty, which took effect this year, removes the legal underpinning the Supreme Court relied upon when it upheld the law in 2012 under Congress’ tax power.
A federal judge in Texas agreed, ruling in December that the change invalidates Obamacare in its entirety. The law remains in effect while the case works its way through the courts.
Douglas Letter, arguing for the now-Democratic controlled House of Representatives, said that Texas and other states are exaggerating the impact of the law Trump signed in 2017 eliminating the mandate. Texas, he said, created a new excuse to challenge a law it doesn’t like, which was upheld in 2012.
“Texas said ‘HA! — you just did something unconstitutional,'” Letter said.
Even though the tax penalty is now $0, Letter argued, the choice people had still exists: buy insurance or don’t.
“The Supreme Court said unequivocally, either you shall maintain health insurance or incur a tax,” he said, adding that it doesn’t matter if that tax is $0.
“That means the choice is still there,” he said. In fact, he argued “there’s less coercion than there was before” to buy insurance.
Trump’s Justice Department wants law struck down
Notably, the Trump administration is not defending the law. Initially, it argued that zeroing out the penalty invalidates only two of the law’s protections of those with pre-existing conditions — specifically the provisions banning insurers from denying people policies or charging them more based on their medical histories.
But in a surprise move in March, the Justice Department said it now agrees with the December ruling that the entire Affordable Care Act should be struck down.
Trump is pinning his hopes on the court striking down the law, allowing him to fulfill his campaign promise to repeal it, but congressional Republicans are keeping their distance since it gives Democrats fodder to attack the GOP for not protecting those with pre-existing conditions — a hallmark of the landmark health reform law.
Trump has repeatedly said he is working on a replacement plan that will preserve those protections but has yet to release any details. He has said Congress won’t vote on it until after next year’s presidential election.
The administration’s stance left the task of defending Obamacare to a coalition of Democratic attorneys general, which now number 21, and the House of Representatives, which joined in earlier this year after Democrats took control. They argue that the mandate remains constitutional and that the rest of the law, in any event, can stand without it. Also, they said that eliminating Obamacare or the protections for those with pre-existing conditions would harm millions of Americans.
But the 5th Circuit threw a new twist into the saga in late June, questioning whether the Democratic coalition and House of Representatives have the legal standing to bring the appeal. That could become a key element of Tuesday’s oral arguments.
Overturning the law would have far-reaching consequences — way beyond disrupting coverage for the millions of people who get their health insurance on the exchanges or through Medicaid expansion.
Obamacare saves senior citizens money on their Medicare coverage and prescription drugs. It lets many Americans obtain free birth control, mammograms and cholesterol tests. And it allows children to stay on their parents’ health insurance plans until they turn 26. Even the Trump administration is using the law to try to lower prescription drug prices.
The Affordable Care Act’s broad impact on the health care system is central to the arguments of both sides — with Texas saying that the passage of the law has forced it to spend more money, and California charging that its nullification would cost it money.