Trump administration move to gut Obamacare raises risks for 2020

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The Trump administration is hardening its position against the Affordable Care Act and arguing now that the entire law is unconstitutional.

The hard-line effort to move to repeal the law may be a shift that promises to bring the issue to the forefront of the 2020 election campaign.

The position is a change for the Justice Department after it argued last year that swaths of the 2010 law—but not all of it—should be struck down in the case Texas brought against the government. It’s now on appeal after a lower court judge voided the law in a December ruling. The Justice Department now says that President Barack Obama’s signature legislative achievement should be wiped out.

The filing assures renewed attention to President Donald Trump’s position that the Affordable Care Act, known as Obamacare, should be eliminated, including its subsidies and popular rules preventing insurers from discriminating against those with pre-existing conditions.

And while the U.S. Court of Appeals in New Orleans that’s handling the matter is known for its conservatism, Congress’s decision in 2017 to remove the penalty for not having coverage means Texas and its allies could have problems proving any harm to give them grounds for their challenge. That would put the issue firmly back in the hands of politicians, which could hurt Republicans in 2020 as they revive their decade-long quest to gut the law without a viable replacement.

The healthcare filing could prove to be a gift for Democrats as they seek to refocus their messaging on issues important to voters. The debate over so-called Obamacare—which Republicans tried unsuccessfully to repeal in 2017—caused heartburn for the party in the 2018 midterm elections and was a focal point for Democrats on the campaign trail.

“Tonight in federal court, the Trump administration decided not only to try to destroy protections for Americans living with pre-existing conditions, but to declare all-out war on the healthcare of the American people,” House Speaker Nancy Pelosi said in a statement Monday.

The move comes as the White House is celebrating Attorney General William Barr’s review of the long-awaited findings by Special Counsel Robert Mueller, which he reported didn’t find evidence to show the Trump campaign conspired with Russia to meddle in the 2016 election.

Senate Minority Leader Chuck Schumer, a New York Democrat, said the Justice Department decision “will prove far more detrimental” to the Republicans than any political “gains” they might enjoy from the end of Mueller’s investigation.

Democratic strategist and campaign veteran Jesse Ferguson said Trump’s party “lost the midterms" as a result of its position on healthcare. Exit polls published by CNN found that healthcare was the top issue for 2018 voters in House elections across the country. The 41 percent who cited it preferred Democratic candidates over Republicans by a margin of 75 percent to 23 percent.

The Affordable Care Act has extended coverage to about 20 million Americans through private insurance marketplaces and an expansion of Medicaid. It has long been a target of conservatives for its tax hikes, regulations and new spending, which they argue have exacerbated issues of the healthcare system.

Texas and its allied states assert that because Congress in 2017 zeroed out the tax penalty for violating Obamacare’s individual mandate to buy insurance, the measure is no longer constitutional, and that the rest of the law is “inseverable” from it and “therefore invalid.” Several states, including California, New York, Illinois, Connecticut and Virginia have intervened in the suit to keep Obamacare intact.

The Justice Department wrote in the filing to the Fifth Circuit Monday that it had “determined that the district court’s judgment should be affirmed. Because the United States is not urging that any portion of the district court’s judgment be reversed, the government intends to file a brief on the appellees’ schedule.”

In his December decision, U.S. District Judge Reed O’Connor said the ACA had survived its first wave of challenges only because the Supreme Court determined in 2012 that the penalty imposed on those who did not sign up for coverage was a valid exercise of Congress’ power to tax and spend. When Congress reduced that penalty to zero in 2017, it effectively removed the high court’s justification for upholding the act.

Timothy Jost, a Washington & Lee University law professor emeritus who has been tracking Obamacare litigation since the measure was signed into law in 2010, said the change actually had the opposite effect, removing any injury for which the suing states could demand redress. He predicted the appellate panel may dismiss the suit on those grounds. “How can you be injured by a tax that doesn’t exist?” Jost said.

Jonathan Adler, a law professor at Case Western Reserve University, agreed and called the administration’s maneuver unconventional. “Typically, we expect the Justice Department to defend federal statutes, particularly when there are reasonable arguments to be made,” Adler said. “Here there are reasonable arguments to be made.”

Adler said that the absence of an actual penalty means the appellate court will likely conclude the states’ lack the requisite legal injury to pursue their claims. Failing that, it could also reverse O’Connor’s determination that the so-called individual mandate—the purchase or penalty provision at the heart of the states’ suit—can be struck down without dismantling the remainder of Obamacare too.

"At the end of the day, I don’t think this is going to have a big effect," Adler said.

Bloomberg News