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Attorney General Jeff Sessions told House Speaker Paul Ryan in a June 7 letter that the Department of Justice will not defend the constitutionality of the Affordable Care Act mandate for individuals to maintain essential health insurance coverage, in a lawsuit brought by 20 GOP-led states.
While the DOJ has a longstanding tradition of defending federal laws when they are challenged in court, there is a rare case when the proper course is to forgo defense of the law, Sessions said.
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 budget bill amendment goes into effect in 2019.
America's Health Insurance Plans said Friday that it plans to file a brief opposing the plaintiffs' request for emergency relief that would provides detail about the harm that would come to millions of Americans should their request to invalidate the ACA is granted either in whole or in part.
The mandate is the core provision of the ACA and is inseparable from the rest of the 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.
"Weighing those considerations here, I have concluded that this is a rare case where the proper course is to forgo defense of Section 5000 (a)," Sessions said of the ACA's requirement for individuals to have essential health coverage.
The DOJ's decision not to defend the mandate's constitutionality will not prevent the court in Texas v United States from resolving the question, Sessions said.
But Sessions also said that he agrees with the Department of Justice's opinion at the time of the 2012 case, that if the mandate is unconstitutional, it is separate from the ACA's other provisions, except those guaranteeing issuance of coverage in the individual and group market.
"I concur in the Department's prior determination," Sessions said. "Outside of these provisions of the ACA, the Department will continue to argue that Section 5000A(a) is severable from the remaining provisions of the ACA."
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.
Without the mandate, insurers have warned of premium price hikes for 2019, and states have already reported increases, as payers fear healthy individuals will flee the ACA market, leaving a higher-cost, riskier population.
Of Texas v. United States America's Health Insurance Plans said Friday, "Initial filings for 2019 plans have shown that, while rates are higher due to the zeroing out of the individual mandate penalty, the market is more steady for most consumers than in previous years, with insurance providers stepping in to serve more consumers in more states."
AHIP said it agrees with the Trump administration that the plaintiffs should not be granted a preliminary injunction. It also agrees that the ACA's provisions affecting Medicaid, Medicare Advantage, and Medicare Part D should remain law.
"However, we believe that a declaratory judgment would have the same destabilizing effect as a preliminary injunction, and therefore should not be granted," AHIP said. "Zeroing out the individual mandate penalty should not result in striking important consumer protections, such as guaranteed issue and community rating rules that help those with pre-existing conditions. Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019."
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.