Trump Administration’s Latest Challenge to Affordable Care Act Rests on Shaky Legal Grounds

Originally published by Healio on May 20, 2019. Written by Janel Miller.

The Justice Department brief filed on May 1 amounts to the Trump administration picking and choosing what parts of the Affordable Care Act should stay in place and also suggests it does not understand the law, experts told Healio Primary Care Today.

“The administration wants to keep the components of the law that will help it the most and remove the components that help the American people the most,” Nancy Nielsen, MD, PhD, a former senior advisor at CMS while Barack Obama was president, who is now the senior associate dean for Health Policy at the University at Buffalo, said in an interview.

“This latest brief is tortured legal reasoning,” Phil Waters, JD, clinical fellow at the Center for Health Law and Policy Innovation at Harvard Law School added.

Background of latest brief

In December 2018, a district judge from Texas ruled that when Congress eliminated the penalty for not buying health insurance, the individual mandate was no longer constitutional under Congress’ taxation powers and thus, the ACA should be nullified. The Attorney General at the time, Jeff Sessions, declined to defend the ACA but did not say the entire law is unconstitutional.

In April, the Department of Justice asked the 5th District Court of Appeals in a two-sentence letter to affirm the District Court opinion. Then on May 1, the Justice Department filed a 50-page brief with the Court of Appeals, asking a federal appeals court to overturn the ACA. According to Health Affairs, oral arguments could take place between July 9 and 12, with the loser of those arguments undoubtedly appealing to the U.S. Supreme Court.

Nielsen said the newest brief adds a new layer of questions surrounding ACA’s legality, a debate that has been raging almost since the ink dried on the original ACA agreement almost 10 years ago.

“This is the third position the Justice Department has taken on this case that was considered down in Texas,” she said. “The May 1 Justice Department brief suggests that it is now taking the stance that all the ACA is unconstitutional. But it claims that since provisions like increased penalties for fraud and kickback don’t apply to the states, the Justice Department wants those parts to stay,” Nielsen told Healio Primary Care Today.

“In this 50-page brief, the Justice Department also repeatedly refers to the case where Supreme Court Justice John Roberts said the individual mandate was permissible. That case was considered a loss to conservatives, and a Republican-led administration referring to the dissenting side of a case that they lost to make the case for why they should win is not something I can recall happening before,” she continued.

Waters provided some hints to the Trump administration’s mindset.

“Its position on appeal is generally identical to the plaintiffs in the lower court who argued that the entire ACA is invalid. It believes that because the 2017 Congress reduced the individual mandate’s tax penalty to $0, it could no longer be upheld as constitutional. This alone would not matter much, as the mandate has little consequence without an enforcement penalty. However, the argument is that in addition to the mandate the rest of the ACA must also be invalidated; because when Congress enacted the ACA it expressly found that the community rating and guaranteed issue provisions were intertwined and essential to the mandate, these provisions cannot be severed from the rest of the law and therefore the entire ACA must be declared unconstitutional,” he said in an interview.

“The administration argues that in addition to having to purchase insurance, as the mandate is still law despite the lack of an enforcement mechanism, the plaintiffs are also harmed by the fact that the mandate ‘limits choices’ that they would otherwise prefer. This, in their view, is sufficient enough to allow them to challenge the entire ACA, even if, as they concede, the insurance reforms in question are constitutional standing alone,” Waters continued.

He suggested that the administration’s rationale indicates it does not understand the severability doctrine. “When one part of a law is found to violate the Constitution, [that] doctrine asks: does the entire law fail or is the law ‘severable’ such that only the offending provisions are invalidated?” he said.

“On this issue, congressional intent is highly dispositive. If part of a law is found to violate the Constitution, judicial restraint requires that courts only invalidate the portion of the law that is now unenforceable or unconstitutional as opposed to the entire legal scheme. This reinforces the principle of separation of powers — the judicial branch will avoid invalidating as much of the congressional branch’s work as possible,” Waters continued.

Nielsen added that the timing of these recent actions, coupled with the fact that there are several justices on the Supreme Court appointed by Trump cannot be ascribed to luck.

“The Trump administration is going into contortions to try and get what they want. What they want is to return this to the Supreme Court, which has a much different make up, a more conservative majority than before. Their end game is clear, and it’s nuts,” she said.

While Nielsen did not want to speculate on which might side win this legal round, Waters offered a possibility.

“Given the severability doctrine and the many obvious holes in the Administration and Plaintiffs’ legal reasoning, I am cautiously optimistic that the Court of Appeals will overturn the lower court’s decision. If it doesn’t, I am equally optimistic that even a conservative Supreme Court will,” he said.

The AMA, American Academy of Family Physicians and ACP have previously indicated they want the lower court decision overturned, stating that a Supreme Court decision to the contrary would eliminate individual marketplace and subsidies based on income, Medicaid eligibility expansion, coverage for certain preventive services, protections for pre-existing conditions and coverage for children under their parents’ health insurance plan until age 26; remove the 85% medical loss ratio insurance companies are currently obliged to follow; and reinstate annual and lifetime dollar limits to health care coverage.

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