Health Care

Entire ACA Should Fall, Trump Tells 5th Circ.

In a dramatic escalation, the Trump administration late Monday told the Fifth Circuit that it supports a recent court ruling that invalidated the entire Affordable Care Act.

In a letter to the appeals court, the U.S. Department of Justice endorsed a Texas federal judge’s December ruling that said the entire ACA must fall. The DOJ “has determined that the district court’s judgment should be affirmed” and “is not urging that any portion of the district court’s judgment be reversed,” according to Monday’s single-page letter.

In a statement late Monday, DOJ spokeswoman Kerri Kupec said the administration will continue enforcing the ACA while litigation is ongoing. The district court’s ruling has been stayed pending appeal.

The Trump administration had previously voiced partial support for an anti-ACA lawsuit brought by Republican-led states. It said the law’s protections for consumers with preexisting conditions should disappear, but that the rest of the law should remain intact.

The lawsuit brought by Texas and other states asserts that the ACA’s individual mandate — upheld by the U.S. Supreme Court as a valid exercise of Congress’ taxing power — became unconstitutional when congressional Republicans in 2017 repealed its tax penalty effective in 2019. It argues further that the rest of the ACA is inextricably linked to the mandate and therefore must also vanish — an argument the district court accepted.

“The Department of Justice has determined that the district court’s comprehensive opinion came to the correct conclusion and will support it on appeal,” Kupec said in her statement.

It’s not clear why the DOJ, now helmed by newly confirmed Attorney General Bill Barr, changed its position.

The district court’s ruling has been widely criticized by legal scholars. Its conclusion, and the Trump administration’s new position, have little support outside of conservative legal circles. Groups representing insurers, doctors, hospitals, seniors and consumers have overwhelmingly said the ACA should continue to operate.

Briefs filed at the Fifth Circuit on Monday by Democrat-led states and the Democrat-controlled U.S. House of Representatives sharply criticized the district court’s ruling. The states, for example, said on Monday that the ruling “is unsound in all respects.”

Earlier Monday, the Centers for Medicare & Medicaid Services reported that the ACA had “another successful open enrollment period,” with 11.4 million people signing up for 2019 coverage. That number was barely down from 2018 despite repeal of the mandate penalty.

The briefs filed by Democrat-led states and the House focused on three arguments: legal standing, the mandate’s constitutionality, and whether the mandate can be “severed” from the rest of the ACA if it is deemed unconstitutional.

With respect to standing, the Democrat-led states argued that individual plaintiffs “suffer no legal harm” because they can either purchase health insurance or decline to do so without facing a penalty. As a result, they don’t have standing, the states argued.

The GOP-led states also “have not suffered any injury” and therefore lack standing, the House argued. In its brief, the House noted that the states have said the absence of a mandate penalty could drive up enrollment in Medicaid, thereby costing them money. But that prediction “relies on an attenuated chain of speculative and improbable inferences, unsupported by any record evidence,” the House said.

The Democrat-led states on Monday also argued that the penalty-free mandate remains constitutional.

“A provision that offers individuals a choice between buying health insurance and suffering no legal consequences for not doing so neither imposes any legal injury nor violates the Constitution,” the states argued.

The House added that even if the mandate has become unconstitutional, the district court overreached by invalidating the entire ACA, which spans almost 1,000 pages and touches on many areas unrelated to private health insurance, including drug approvals, Medicaid expansion and value-based reimbursement in Medicare.

“The district court disregarded established limits on judicial power when it struck down the act,” the House said.

The plaintiff states are represented by their respective attorneys general.

The defendant states are represented by their respective attorneys general. The House is represented by Munger Tolles & Olson LLP, the Constitutional Accountability Center and the Office of General Counsel for the U.S. House of Representatives.

The U.S. is represented by the DOJ.

The case is Texas et al. v. U.S. et al., case number 19-10011, in the U.S. Court of Appeals for the Fifth Circuit.

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