America's Health Insurance Plans on Friday asked a United States District Court to deny the effort of Texas and 19 other Republican-led states to shut down key provisions of the Affordable Care Act.
Last week, Attorney General Jeff Sessions backed the plaintiff states' efforts in one respect. He said the Department of Justice would not defend the ACA in the mandate for individuals to maintain essential health benefits. The DOJ would uphold other aspects of the law, Sessions said.
AHIP on Friday submitted an amicus brief in Texas v. United States, asking the court to deny the plaintiff states' motion for a preliminary injunction of the ACA and to reject the federal government's request for a declaratory judgment invalidating the individual mandate, guaranteed-issue and community rating provisions that are set to go into effect on Jan. 1, 2019.
AHIP's brief focuses on the impacts that a preliminary injunction or declaratory relief would have on patients, health insurance providers, states and other stakeholders.
To grant the injunction would affect consumers, payers and providers in coverage of Medicaid, Medicare Advantage, and Medicare Part D, AHIP said.
"The healthcare system, while constantly evolving cannot pivot to a new (or, worse yet, non-existent) set of rules without consequences. Abruptly threatening or even cutting off billions of federal dollars that allow individuals to purchase insurance and that fund benefits offered through Medicaid or Medicare would have devastating effects," AHIP said in the brief. "Enjoining enforcement of federal laws like the federally-facilitated marketplaces and the products sold on them would be similarly disruptive."
The brief also explains why the declaratory relief sought by the Administration regarding the inseverability of the individual mandate from the ACA's guaranteed-issue and community-rating provisions would be just as disruptive as a preliminary injunction.
As explained in the brief, "shifting to a marketplace that eschews guaranteed-issue and community-rating would only upend a steadying market, not save it," AHIP said.
The injunction would, for example, halt payments made in connection with advance premium tax credits, which 8.7 million consumers use to buy health insurance, AHIP said in the brief.
It would end the ACA risk adjustment programs that financially help plans that take on higher-risk enrollees.
The interlocking of federal and state laws would create complicated questions regarding the enforcement of the law and ACA regulations, AHIP said.
The injunction would disrupt coverage for 12 million individuals in 34 states that have expanded Medicaid, according to the brief.
Medicaid managed care plans, operating under contracts negotiated with states, would face financial and operational uncertainty as states would be unable to make contracted payments, AHIP said.
The ability for low income consumers to buy prescriptions would be cast into doubt and Medicaid programs would see drug prices increase due to the loss of the ACA's prescription drug rebates.
The 44 million seniors covered by Medicare Part D and 20 million enrolled in Medicare Advantage plans would also suffer, AHIP said.
The prospective monthly payments paid to MA insurers would be disrupted, leaving Medicare Advantage plans in uncertainty. The ACA made fundamental changes to the methodology used to set annual payment rates for Medicare Advantage plans and to the design of the Part D program, including eliminating the donut hole gap in prescription drug coverage.
In a June 7 letter to House Speaker Paul Ryan, Sessions said the Department of Justice would not defend the constitutionality of the Affordable Care Act mandate for individuals to maintain essential health insurance coverage, in the Texas lawsuit.
The February lawsuit brought in the U.S. District Court by Texas and 19 other states argues that the ACA is unconstitutional and should be overturned because the Tax Cuts and Jobs Act which passed in December removed tax penalties against individuals who choose not to get insurance.
The mandate is the core provision of the ACA and is inseparable from the rest of President Obama's signature law, the plaintiffs said. Without it, all of the ACA's regulations should be invalid, they said, citing a 2012 Supreme Court ruling.
Sessions said he agreed with the plaintiffs that without the mandate, the decision in the 2012 National Federation of Independent Business vs. former Health and Human Services Director Kathleen Sebelius, is the proper course. In that case, the Supreme Court held up the individual mandate as constitutional only because it could be construed as a tax that raised revenue for the government.
Sessions said because there is no longer a tax that brings in federal revenue, he would not uphold the individual mandate.
The DOJ's decision not to defend the mandate's constitutionality will not prevent the United States District Court in Texas from resolving the question, Sessions said.
Republican leaders have tried to overturn the ACA through legislative efforts but have come up short. President Trump has said he wants a repeal and replacement of the law.
The 20 states that brought the lawsuit include Texas, Wisconsin, Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Missouri, Nebraska, North Dakota, South Dakota, South Carolina, Tennessee, Utah, Virginia, and Gov. Paul LePage for the State of Maine and Gov. Phil Bryant for Mississippi.