Justice Department won't defend Affordable Care Act provisions in court

Trump justice department will stop defending key parts of Obamacare

Since Congress repealed the penalty for not having insurance in its tax reform package a year ago, much of the rest of the insurance statute becomes unconstitutional in 2019 and must be "struck down", attorneys for the Justice Department said in a court filing Thursday.

Three attorneys for the government withdrew from the case just minutes before the Justice Department's filing in federal court in Fort Worth, Texas, which signaled an internal rift within the administration over its role in defending USA law, according to University of Michigan Law Professor Nicholas Bagley.

The long-shot lawsuit argues that because Republicans repealed the ACA's individual mandate penalty as part of their tax overhaul, all of the remaining law is unconstitutional.

As a result, the Texas lawsuit contends, "the country is left with an individual mandate to buy health insurance that lacks any constitutional basis". It also said that provisions shielding people with medical conditions from being denied coverage or charged higher premiums and limiting how much insurers can charge older Americans should fall as well.

A group of Democratic state attorneys general, lead by California's Xavier Becerra, are riding to the law's defense.

Removing consumer friendly provisions like guaranteed issue, whereby health insurers can not deny coverage to applicants or charge more based on health status, will result in renewed uncertainty in the market as well as push up rates for older and sicker patients, AHIP added. If the Justice Department's analysis is ultimately persuasive, however, other parts of the law, including Medicaid expansion, could stay in place. As a result, the entire remainder of the ACA must be upheld, even if the court finds the mandate unconstitutional.

Democrats are seeking to tie the move into their argument that the Trump administration is "sabotaging" health care and driving up premiums, a key midterm message.

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Bailey's spokesman Corey Uhden said Friday that he wouldn't comment on the constitutionality of the ACA provisions.

Texas and the accompanying states have asked for a preliminary injunction that could suspend the entire law while the case plays out in court. If these people lost or left their jobs, they may not be able to get individual market coverage.

If the court agrees with the Justice Department's argument to toss out part of the law that protects individuals with an existing medical condition, that could affect millions of Americans who buy insurance directly from the marketplace. The administration's position is likely to destabilize an insurance market already struggling with repeated administration actions that have undermined the market.

"The question is, what does this do to insurance markets now?" said Jost. An NBC/Wall Street Journal poll released in early June found that 36 percent people are "very uncomfortable" with a candidate who supports repealing the ACA - a significant jump up from 25 percent in 2010.

Moreover, if the Trump administration did not want to defend the ACA expressly, it could simply have filed a jurisdictional motion, asserting that the states are not injured by the lack of an individual mandate penalty and that the litigation is not yet timely, as the tax is still in effect.

These consumer protections proved enormously popular with Americans and are among the reasons why efforts to repeal Obamacare in Congress failed previous year.

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