Justice Dept. Says Crucial Provisions of Obamacare Are Unconstitutional

Is it a tax if it raises no revenue………………………………….?

By Robert Pear

June 7, 2018

WASHINGTON — The Trump administration told a federal court on Thursday that it would no longer defend crucial provisions of the Affordable Care Act that protect consumers with pre-existing medical conditions.

Under those provisions of the law, insurance companies cannot deny coverage or charge higher rates to people with pre-existing conditions.

The Justice Department said the provisions were part of an unconstitutional scheme that required most Americans to carry health insurance.

In a court case filed by Texas and 19 other states, the Justice Department said in a brief on Thursday that the requirement for people to have insurance — the individual mandate — was unconstitutional.

If that argument is accepted by the federal court, it could eviscerate major parts of the Affordable Care Act that remain in place despite numerous attacks by President Trump and his administration. Insurers could again deny people coverage because of their medical condition or history.

A definitive court ruling could be months away and appeals of any decision could take many more months, during which the law is likely to stay in effect.

The Supreme Court upheld the individual mandate in 2012 as an exercise of the government’s power to tax. But since Congress repealed the tax last year, the mandate and the law’s consumer protections can no longer be justified, the Justice Department said.

The mandate cannot be interpreted as a tax “because it will raise no revenue as Congress has eliminated the monetary penalty,” the department said in a brief filed in the Federal District Court in Fort Worth.

Brad Woodhouse, the director of the Protect Our Care Campaign, an advocacy group that supports the health law, said the Justice Department’s position threatened to “steal coverage from millions of Americans.” It is, he said, Mr. Trump’s “most dangerous sabotage effort yet.”

Even though the Justice Department is not defending crucial provisions of the law, California and 15 other states have intervened in the court proceeding, and they filed a brief on Thursday defending the law, including its consumer protections.

The Justice Department said that the protections for people with pre-existing conditions were inseparable from the individual mandate and must also be struck down.

But it did not go as far as Texas and the other states, which argued that all of the Affordable Care Act and the regulations issued under it were now invalid.

The 2010 health care law includes many other provisions, such as the creation of health insurance marketplaces, premium subsidies for low- and moderate-income people and expansion of the Medicaid program, as well as changes in Medicare and public health services.

The Justice Department did not challenge those provisions of the law. Indeed, it said, they can continue to operate without the individual mandate.

By contrast, the department said, the Supreme Court held that the individual mandate was “closely intertwined” with the requirement for insurers to offer coverage to all consumers at the same basic prices, regardless of their health status.

Attorney General Jeff Sessions sent a letter to congressional leaders on Thursday notifying them that he would not defend the constitutionality of the individual mandate or the requirement for insurers to sell insurance to all applicants at standard rates — the “guaranteed issue” and “community rating” provisions.

The Justice Department has a long tradition of defending statutes enacted by Congress, regardless of whether it supports the policies reflected in those laws.

But, Mr. Sessions said, this is “a rare case” in which the Justice Department has decided not to defend certain provisions of a law, because he could not find any “reasonable arguments” to support the constitutionality of the provisions.

Earlier on Thursday, three career lawyers at the Justice Department who had been working on the Texas case abruptly withdrew from the litigation.

Brett A. Shumate, a Trump administration political appointee in the civil division of the Justice Department who has played a leading role in defending the White House in a range of lawsuits, has joined the team handling the Texas case.

Even before the litigation is resolved, it could have more immediate effects on consumers’ wallets.

“The Justice Department’s brief creates another cloud of uncertainty for insurers, just as they’re filing proposed rates for 2019,” said Larry Levitt, a senior vice president of the Kaiser Family Foundation. “When insurance companies face uncertainty, they increase premiums.”

Xavier Becerra, the attorney general of California, said the Texas lawsuit was “based on a dubious legal claim.”

“We’re leading 16 attorneys general in court to stop Texas from destroying the Affordable Care Act” because “the Trump administration won’t defend the law of the land,” Mr. Becerra said.

Under the $1.5 trillion tax cut that Mr. Trump signed into law in December, the tax penalties for people who go without insurance will be eliminated next year.

“The individual mandate thus still exists, but it will no longer be fairly possible to describe it as a tax because it will no longer generate any revenue,” the Justice Department said in its brief on Thursday. “As of 2019, therefore, the individual mandate will be unconstitutional under controlling Supreme Court precedent holding that ‘the federal government does not have the power to order people to buy health insurance.’”

The Supreme Court said in 2012 that the individual mandate could not be upheld as an exercise of Congress’s broad power to regulate commerce, but was a valid exercise of the taxing power.

The Justice Department’s latest position, though framed as an interpretation of federal law, is consistent with the president’s political views.

“We have essentially repealed Obamacare,” Mr. Trump said in December as Congress finished work on the tax bill.

Likewise, at a cabinet meeting in October, he said: “Obamacare is finished. It’s dead. It’s gone. It’s no longer — you shouldn’t even mention. It’s gone. There is no such thing as Obamacare anymore.”

In their lawsuit, filed in February, Texas and other Republican-led states argued that the individual mandate was no longer constitutional after passage of the Republican tax bill.

“Once the heart of the Affordable Care Act — the individual mandate — is declared unconstitutional,” they said, “the remainder of the A.C.A. must also fall.”

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Charlie Savage contributed reporting.