The Justice Department said in a court filing late Thursday that it will no longer defend key parts of the Affordable Care Act, beginning with the unpopular requirement that people carry health insurance, but also including widely supported provisions that guarantee access for people with medical problems and limit what insurers can charge older, sicker adults.
But Justice Department lawyers do argue that with no penalty for not having coverage, the federal government can not make health insurers cover sick consumers or prohibit insurers from charging sick consumers higher premiums, as was routinely done before the health care law was implemented.
In a brief filed in a federal court in Texas, the department said a tax law signed previous year by President Donald Trump that eliminated penalties for not having health insurance rendered the so-called individual mandate under Obamacare unconstitutional.
While the case still must play out before the nation's high court, the Justice Department's decision to not defend the law could create some uncertainty for health insurers that sell plans on the Affordable Care Act marketplace, according to Larry Levitt, a Kaiser Family Foundation senior vice president who closely monitors the health law.
Two months later, Texas and the 19 other states filed suit in U.S. District Court in Fort Worth, asserting that the mandate could no longer be justified as a tax and should therefore be struck down - and arguing that as a result, the rest of the law must be invalidated, too.
"Just read the brief of the states that intervened to defend the law".
The federal lawsuit hinges on the ACA's individual mandate, or the requirement to get health coverage or pay a penalty.
"The question is, what does this do to insurance markets now?" said Jost. "It's not uncommon to make this kind of switch", a department spokesperson said Thursday night.
The Trump administration's decision to stop defending in court the Obama health law's popular protections for consumers with pre-existing conditions could prove risky for Republicans in the midterm elections - and nudge premiums even higher. But it puts the law on far more wobbly legal footing in the case, which is being heard by a GOP-appointed judge who has in other recent cases ruled against more minor aspects.
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Health care is already a dominant issue in this year's elections, with voters regularly citing it as a leading determinant for how they will vote.
The Trump administration's decision not to defend the Affordable Care Act in federal court in Texas on Thursday provides the latest challenge for NY insurers and regulators.
Sessions, in his letter to Ryan, said that the parts of the law restricting the variance in the premiums that could be charged and requiring insurers to cover everyone did hinge on the mandate, because without the mandate, "individuals could wait until they become sick to purchase insurance, thus driving up premiums for everyone else".
The administration does not go as far as the Texas attorney general and his counterparts. Now, of course, as I mentioned, the attorneys general say that the entire rest of the law is unconstitutional without that penalty for not having insurance.
The main trade association for health insurers came out strongly against the administration's position.
That's not so surprising considering more than 52 million non-elderly Americans have health conditions that could have rendered them uninsurable prior to Obamacare, a Kaiser Family Foundation analysis found.
The reason so many people could be affected by this decision is because it would apply not just to people with individual insurance policies, "but also [to] people with preexisting conditions who have employer-sponsored coverage".
Moreover, if the Trump administration did not want to defend the ACA expressly, it could simply have filed a jurisdictional motion, asserting that the states are not injured by the lack of an individual mandate penalty and that the litigation is not yet timely, as the tax is still in effect.
Senate Minority Leader Charles Schumer, D-N.Y., released a letter with other top Democratic senators demanding the administration reverse the move, while the Democratic Senatorial Campaign Committee wasted no time blasting out news releases questioning whether Republican candidates agreed with the administration. United States has its roots in another legal travesty that these people also celebrated - the 2012 Supreme Court ruling in NFIB v. Sebelius. The Justice Department isn't asking for anything immediately. Judge Reed O'Connor was named to the court by President George W. Bush and has ruled against other aspects of the Affordable Care Act.