Democrats vow rapid action after ruling casts doubt on ACA

(Bloomberg)—Obamacare was struck down by a Texas federal judge in a ruling that casts uncertainty on insurance coverage for millions of U.S. residents.

The judicial ruling is drawing sharp condemnation from medical professional organizations and a vow for immediate legal action by top Democrats.

The lawsuit was brought by 20 Republican-led states. The decision will be immediately appealed to the United States Court of Appeals for the Fifth Circuit, according to California Attorney General Xavier Becerra, which was one of 16 Democratic-led states who filed a brief defending the ACA.

The decision Friday finding the Affordable Care Act unconstitutional comes at the tail end of a six-week open enrollment period for the program in 2019 and underscores a divide between Republicans who have long sought to invalidate the law and Democrats who fought to keep it in place.

The White House said the ruling will be put on hold during an appeals process that’s destined to go all the way to the U.S. Supreme Court, drawing confirmation from Democrats vowing a rapid appeal.

It has “no impact to current coverage or coverage in a 2019 plan,” Seema Verma, administrator for the Centers for Medicare and Medicaid Services, said on Twitter.

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Seema Verma, Centers for Medicare and Medicaid Services administrator nominee for U.S. President Donald Trump, speaks during a Senate Finance Committee confirmation hearing in Washington, D.C., U.S., on Thursday, Feb. 16, 2017. Verma, the businesswoman Trump selected to oversee Medicaid, the health care program for 74 million low-income Americans, has said the program is structurally flawed by policies that burden states and foster dependency among the poor. Photographer: Pete Marovich/Bloomberg

U.S. District Judge Reed O’Connor in Fort Worth agreed with a coalition of Republican states led by Texas that the Affordable Care Act, the signature healthcare overhaul by President Barack Obama, needed to be eviscerated after Congress last year zeroed out a key provision—the tax penalty for not complying with the requirement to buy insurance.

“Today’s ruling is an assault on 133 million Americans with pre-existing conditions, on the 20 million Americans who rely on the ACA’s consumer protections for healthcare, and on America’s faithful progress toward affordable health care for all Americans,” California Attorney General Xavier Becerra said in a statement. A spokeswoman for Becerra vowed a quick challenge to the ruling by O’Connor, who was appointed to the federal bench by President George W. Bush.

Representative Nancy Pelosi, who’s likely to become Speaker in the new Congress, called the ruling “absurd,” adding that Democrats in the House will “swiftly intervene in the appeals process” once they take control in January.

Senator Chuck Schumer, the top Democrat in the Senate, castigated Republicans for “pretending to support people with pre-existing conditions while quietly trying to remove that support in the courts.” He tweeted that Democrats “will force votes to expose their lies.” Senator Joe Manchin, a West Virginia Democrat who won re-election in November on a pro-Obamacare platform, called the ruling “misguided and inhumane.”

Democrats weren’t the only ones to criticize the decision. Arthur Evans, chief executive officer of the American Psychological Association, said his group was “very concerned for the millions of Americans” who get insurance through the health law.

“As our nation is in the midst of an opioid crisis, this coverage is especially needed,” Evans said in a statement. “We should be expanding access to health insurance, including behavioral health services, rather than stripping coverage from Americans in need.”

The American Medical Association called the decision “an unfortunate step backward for our health system.”

In a statement, AHA President and CEO Rick Pollack said, "America's hospitals and health systems are extremely disappointed with today's federal district court ruling on the constitutionality of the ACA. The ruling puts health coverage at risk for tens of millions of Americans, including those with chronic and pre-existing conditions, while also making it more difficult for hospitals and health systems to provide access to high-quality care. We strongly disagree with the ruling and urged the court not to accept the plaintiff's severability argument in an amicus brief filed earlier this year along with other national organizations representing hospitals and health systems. We join others in urging a stay in this decision until a higher court can review it and will continue advocating for protecting patient care and coverage."

Texas and an alliance of 19 states argued to the judge that they’ve been harmed by an increase in the number of people on state-supported insurance rolls. They claimed that when Congress last year repealed the tax penalty for the so-called individual mandate, it eliminated the U.S. Supreme Court’s rationale for finding the ACA constitutional in 2012. The Texas judge agreed. He likened the debate over which provisions of the law should stand or fail to “watching a slow game of Jenga, each party poking at a different provision to see if the ACA falls.” He also wrote that it’s clear the individual mandate is the linchpin of the law “without marching through every nook and cranny of the ACA’s 900-plus pages.”

Some healthcare law experts were quick to critique the judge’s reasoning and predicted the ruling will be overturned.

“We know what Congress’ intent was in 2017—that was to pull the individual mandate while keeping the rest of ACA intact,” University of Michigan law professor Nicholas Bagley said. “Now, we have a judge saying we have an unenforceable mandate. This whole thing is bonkers.”

With just one day left in the sign-up period for 2019 Obamacare coverage, the judge’s ruling is unlikely to have much of an effect on those actively shopping for insurance for next year. As of Dec. 8, 4.1 million people had chosen plans through the federal-government run portal that 39 states use for enrollment. Total enrollment is on track to be lower than in previous years, which many critics have credited to efforts by the Trump administration to promote alternatives to the law or cut back on its promotion.

California and Democratic officials in 14 states, along with the District of Columbia, won permission to defend the ACA in the Fort Worth case when the Trump administration sided with the states seeking to dismantle it. They contended that overturning the law would throw millions off health insurance rolls by reversing Medicaid expansion, ending tax credits that help people and empowering insurers to once again deny coverage based on pre-existing conditions.

Justice Department lawyers urged the judge to strike down the individual mandate and provisions requiring insurance companies to cover individuals with pre-existing health conditions and charge them the same premiums as healthy individuals. They argued the judge should spare the rest of the law, which includes Medicaid expansion, the employer mandate, health exchanges, premium subsidies and federal healthcare reimbursement rates for hospitals.

The judge’s ruling would, since it overturns the entire act, also end provisions that have little to do with health insurance. Those include parts of the law on adding calorie counts on restaurant menus and speeding to market cheaper versions of costly biotechnology drugs.

Maryland Attorney General Brian Frosh launched a counterattack September 13 to save Obamacare, seeking a judgment that the Affordable Care Act is constitutional and a court order barring the U.S. from taking any action inconsistent with that conclusion. Frosh sued then-U.S. Attorney General Jeff Sessions and the federal departments of Justice and Health and Human Services.

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