Health Care

Trump, GOP Urge 5th Circ. To Nuke Affordable Care Act

The Trump administration and nearly 20 Republican-led states pressed the Fifth Circuit on Wednesday to torpedo the Affordable Care Act, asserting that the elimination of the law’s individual mandate penalty has doomed the act.

In a pair of opening briefs, the White House and the states endorsed a district court ruling in December that invalidated the ACA from head to toe but that has been stayed pending appeal. Both briefs asserted that the penalty-free individual mandate to have health insurance is no longer a constitutional exercise of taxing power and that the rest of the ACA is too dependent on the mandate to carry on without it.

“The district court thus properly concluded that the ACA is invalid in its entirety,” according to a brief filed by the administration, which in late March surprisingly announced full-throated support for a Republican-backed lawsuit aimed at destroying the ACA. The law has helped about 20 million Americans buy private health insurance or enroll in Medicaid.

But the administration added at least a small caveat to its position Wednesday, arguing that the Fifth Circuit can affirm the district court “on the merits,” but that the remedy should not actually erase 100% of the ACA. Instead, the remedy “should be limited only to those provisions that actually injure the individual plaintiffs,” the administration said.

As examples of provisions that should be left intact, the administration cited health fraud statutes amended by the ACA, adding that the district court “can determine the precise scope of the judgment on remand.” The ACA contains many provisions unrelated to health insurance, such as a new pathway for biologic drug approvals, and it was not completely clear which provisions the administration might want to preserve.

Both of Wednesday’s briefs focused on three questions: whether individual or state challengers have suffered harm that gives them legal standing, whether the penalty-free mandate is unconstitutional, and whether all or part of the ACA would also have to fall if the mandate can’t be saved.

The Democrat-controlled U.S. House of Representatives and a coalition of Democrat-led states have argued that the answer to all three questions is no. Wednesday’s briefs mostly took the opposite view. How the questions are ultimately answered by the Fifth Circuit, and perhaps by the U.S. Supreme Court, will seriously affect health insurance coverage for millions of Americans.

With respect to standing, the administration on Wednesday argued that individual challengers have suffered harm even though the mandate isn’t backed up by an enforcement mechanism. The ACA’s consumer protections, including those for people with preexisting conditions, “increase the cost of insurance,” thereby inflicting financial harm that creates standing, the administration said.

The GOP-led states also defended their own standing, asserting that the mandate “directly causes higher enrollment in state-funded coverage programs,” thereby inflicting “a pocketbook injury” on the states.

With respect to the mandate’s constitutionality, both briefs argued that Congress cannot command consumers to buy health insurance without relying on its taxing power. According to the GOP-led states, the mandate is now an unconstitutional directive for Americans “to engage in commerce by buying particular insurance products in accordance with the government’s view of their best interests.”

As to whether the rest of the ACA can remain intact without the mandate, both briefs answered in the negative. Each brief noted that the ACA called the mandate “essential to creating effective health insurance markets.”

But the House has pushed back against that reading of the law. Although the ACA did call the mandate necessary to the creation of solid insurance markets, it “shed little light on what Congress would have believed about the need for the mandate now that insurance marketplaces are fully up and running,” the House told the Fifth Circuit in March.

The House and the Democrat-led states have also noted that Congress repealed the individual mandate’s penalty while leaving the rest of the law untouched, something they contend clearly demonstrated Congress’ intent to let the ACA keep operating.

California Attorney General Xavier Becerra, who is helping to lead opposition to the legal challenge, said in a statement on Wednesday that his allies “will vigorously defend the law and the Americans President [Donald] Trump has abandoned.”

Oral arguments in the case are expected to occur in early July.

The GOP-led states are represented by their respective attorneys general. The U.S. is represented by the U.S. Department of Justice.

The Democrat-led 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 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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