Obamacare’s future will once again be at stake Tuesday when a federal appeals court considers a Trump-backed lawsuit aimed at scrapping the health care law in the heat of the 2020 election cycle.
The court will hear oral arguments on whether the Affordable Care Act is no longer valid after Congress eliminated the tax penalty for not purchasing health insurance. The lawsuit, brought by 18 Republican-led states, could jeopardize health care coverage for more than 20 million people insured through the 2010 health care law, eliminate insurance protections for preexisting conditions, and severely disrupt the country’s $3.5 trillion health care system.
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Should the 5th U.S. Circuit Court of Appeals in New Orleans rule against the law, that would all but guarantee the Supreme Court would again take a case directly challenging the ACA’s survival. The high court, which has twice upheld the health care law since it passed in 2010, would likely deliver a final verdict on the ACA as the 2020 campaign season ramps up.
A group of red states filed this latest legal threat to Obamacare in February 2018, months after Republican-led efforts to repeal the law collapsed in Congress. They argue that Congress’ decision to scrap the individual mandate penalty in 2017 rendered the law unconstitutional because the Supreme Court previously upheld the mandate as a valid exercise of taxing power. In December, U.S. District Court Judge Reed O’Connor sided with the Republican-led states, stunning legal experts.
“If ultimately the trial court’s decision does get upheld, it’s going to have really far-reaching consequences,” said MaryBeth Musumeci, associate director of the Kaiser Family Foundation’s Program on Medicaid and the Uninsured. “That will be pretty complicated to disentangle and reach nearly everyone in the country.”
Legal experts across the political spectrum, who had earlier dismissed the lawsuit as a long shot, contend Reed’s decision was an overreach. Even if the individual mandate was unconstitutional, they say unrelated provisions of the law — like the expansion of Medicaid to millions of low-income adults in nearly two-thirds of states — should be allowed to stand. Even a pair of Republican attorneys general in Ohio and Montana, which both expanded Medicaid, have argued that O’Connor’s ruling went too far and would have detrimental consequences.
“There’s a pretty strong bias … to try to preserve things under law, rather than knock them down,” said Tom Miller, a health care expert at the conservative American Enterprise Institute. “The preponderant stance has been to go minimal in terms of knocking out broad federal laws.”
Democrats seized on failed Republican efforts to dismantle Obamacare as a top rallying cry in the last election cycle, which helped them win control of the House and minimize losses in the Senate. In particular, the Trump administration’s stance in the lawsuit has been a political gift for Democrats.
Last year, the administration refused to defend Obamacare but urged the court to strike only the law’s popular protections for pre-existing conditions. In March, the administration expanded its legal attack by urging the 5th Circuit to uphold the federal judge’s ruling against the entire law.
“The scale of cruelty is so large it’s almost unimaginable,” Senate Minority Leader Chuck Schumer said on a call with reporters Monday. “President Trump and the Republicans are just playing a dangerous political game with people’s lives.”
Democrats’ health care messaging has been muddled this year by growing calls among progressives, including some 2020 presidential candidates, to vastly expand government coverage and virtually abolish private insurance. Republicans have lambasted such a universal, government-run system as socialized medicine that will lead to skyrocketing taxes and rationing of care, and moderate Democrats fear “Medicare for All” could cost the party its advantage on health care in 2020.
“The Republicans’ best argument … is, ‘Hey, you folks thought we were crazy a couple of years ago? Look at these ‘Medicare for All’ Democrats,” said Miller of AEI, the conservative think tank.
However, an appellate court ruling against the ACA would again put pressure on Republicans to produce a health care plan after failing to agree on a viable replacement for years.
California and 19 other Democratic-led states have led the legal defense against the ACA lawsuit. The House of Representatives also joined the defense this year after Democrats won back control of the chamber in November.
Even before oral arguments, the conservative-leaning 5th Circuit spooked ACA supporters by questioning whether the blue states or the House have the legal standing to appeal the federal judge’s decision invalidating the law. The inquiry, issued two weeks ago, was sparked by the Trump administration’s recent shift in legal strategy to support the judge’s decision, essentially putting the plaintiffs and defendants on the same side of the lawsuit.
Obamacare advocates feared that the appeals court could let O’Connor’s ruling against the law stand without a review by a higher court. But in legal briefs filed last week, all of the parties involved in the lawsuit — including the Republican-led states behind it — argued that the appeal should be allowed to proceed.
If the appeals court reverses the judge’s decision and finds the ACA is constitutional, the red states and the Trump administration could appeal the decision to the Supreme Court, which again could determine the law’s fate. In previous major cases, the court narrowly saved the individual mandate in 2012, and in 2015 it upheld the law’s premium subsidies in a 6-3 decision.
“Judge O’Connor is not going to get to decide the constitutionality of the ACA — either in the red states or nationwide — without some kind of Supreme Court review,” said Nicholas Bagley, a University of Michigan Law School professor who’s written extensively about the case. “By hook or by crook, the Supreme Court will get the case.”
The ACA has remained in effect since the judge found it unconstitutional, and the Trump administration has said it will enforce it while the lawsuit winds through the courts. Meanwhile, the law’s insurance marketplaces have largely stabilized after a few rocky years. Enrollment has decreased slightly and many insurers are turning a profit, despite the elimination of the individual mandate penalty.