The Justice Department said the 2010 health law, a signature achievement of the Obama administration, is invalid because Congress in 2017 ended the financial penalty for not having health insurance, though it didn’t take effect until 2019.
“The entire ACA thus must fall with the individual mandate,” Solicitor General Noel Francisco wrote in the Justice Department’s brief, which was filed late Thursday. “The individual mandate is no longer a valid exercise of Congress’s legislative authority in light of Congress’s elimination of the penalty for noncompliance.”
Supreme Court consideration of the ACA won’t happen until the fall at the earliest, with any decision likely coming after Election Day.
The administration’s continued support for toppling the ACA is a political gamble as jobless claims stabilize around a historic high of about 20 million because of the pandemic. Democrats, including presumptive Democratic presidential nominee Joe Biden, are seeking to portray President Trump as endangering health coverage at a time when more than 120,000 people have died from coronavirus.
The Supreme Court upheld most of the Affordable Care Act in 2012, reasoning that because it required many Americans to maintain health insurance or pay a penalty when filing income-tax returns, the health-care overhaul fell within Congress’s power to levy taxes.
Republicans almost universally opposed the Obama administration’s signature legislation, and Mr. Trump, as a 2016 presidential candidate, pledged to repeal the act and replace it with a better alternative. They failed to do either during the next two years while the GOP controlled both Congress and the White House, but the 2017 tax-cut bill, passed over Democratic objections, effectively eliminated the penalty by setting it at zero percent of an individual’s income.
A coalition of Republican-leaning states, led by Texas, then sued to strike down the entire health-care law, arguing that by eliminating the penalty, Congress implicitly destroyed the law’s constitutional basis in the congressional tax power. A federal district court in Texas agreed, in a decision upheld by the Fifth U.S. Circuit Court of Appeals, in New Orleans.
California and a group of Democratic-leaning states appealed to the Supreme Court, where they argue the law remains constitutional. Even if Congress’s power to impose an insurance mandate ended with the elimination of the tax penalty, they argue that the rest of the law should stand, including a ban on insurers denying coverage based on pre-existing conditions and other provisions intended to expand the number of Americans with health care.
A decision invalidating the ACA would be a shock to the U.S. health system. It wouldn’t only end coverage for the 11.4 million people who signed up for insurance for this year, but also halt the expansion of Medicaid that covers more than 12 million people. Insurers would again be able to deny people health coverage or charge higher premiums to consumers with pre-existing conditions. It would end new ACA taxes, insurance-premium subsidies, changes to the way health providers get paid and state grants to combat chronic disease.
Democrats are attacking the administration for its support of the case during the pandemic.
“The ACA has been life-changing and now through this pandemic, we can all see the value in having greater access to quality health care at affordable prices,” said California Attorney General Xavier Becerra, one of the Democratic attorneys general defending the health-care law. “Now is not the time to rip away our best tool to address very real and very deadly health disparities in our communities.”
Mr. Trump has repeatedly promised to release a new, better health plan but hasn’t done so. His administration has said states should be given more control over the health-insurance market, which Republicans have said would give consumers more choice and lower-priced health plans.
Mr. Biden, during a speech in Lancaster, Pa., urged the president to drop his effort to repeal the ACA, referring to Mr. Trump’s “twin legacies: his failure to protect the American people from the coronavirus, and his heartless crusade to take health-care protections away from American families.”
Trump campaign spokesman Tim Murtaugh responded: “Joe Biden has no credibility on health care since he sold Obamacare under the lie of, ‘If you like your plan, you can keep your plan.’ His support for a government-run ‘public option’ for health care, which drives people into government-controlled plans and kills rural hospitals, is an admission that Obamacare was fatally flawed.”