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Trump administration urges court to strike down Obamacare rule that requires insurers to cover the sick

Trump administration urges court to strike down Obamacare rule that requires insurers to cover the sick
A legal move by the Trump administration takes aim at consumer protections in the Affordable Care Act. (TNS)

The Trump administration has elected not to defend key parts of the Affordable Care Act against a sweeping legal challenge filed by a group of conservative states, marking an unusual departure from the Justice Department’s traditional responsibility to safeguard federal law.

The practical effect of the move may be relatively minor, as the challenge is widely viewed as a long shot that stands little chance of threatening the 2010 law, often called Obamacare.

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And though the federal government will apparently no longer defend a pillar of the law, a group of left-leaning states, including California, have stepped in to back it in court.

The Justice Department legal position nevertheless signals a remarkable willingness by the Trump administration to abandon landmark consumer protections in the healthcare law that for the first time prohibit health insurers from turning away sick consumers.

The administration’s decision also is likely to further roil insurance markets that are seeing very large premium increases, fed in part by other moves by the Trump administration to loosen insurance regulations.

The president has backed new rules that would allow for an expansion of skimpier health plans that do not have to cover a full range of health benefits. These plans are overwhelmingly opposed by consumer and patient advocates and others, who have warned that they will drive up costs for sicker consumers who need more comprehensive health coverage.

The healthcare law’s core consumer protections, which the president once signaled he supported, have been among the most popular parts of the law and have helped extend coverage to millions of previously uninsured Americans.

The legal challenge led by the state of Texas argues that these consumer protections – as well as the law’s multibillion-dollar program for expanding the Medicaid safety net to poor Americans – should be scrapped because Congress last year repealed the penalty on Americans who don’t have health coverage.

That penalty, Texas and the other conservative states argue, is so central to the law that without it, the rest cannot stand.

Many healthcare experts disagree with that position. And the Trump administration has not asserted that the Medicaid expansion made possible by the healthcare law should be rolled back.

But Justice Department lawyers do argue that with no penalty for not having coverage, the federal government cannot make health insurers cover sick consumers or prohibit insurers from charging sick consumers higher premiums, as was routinely done before the healthcare law was implemented.

“The individual mandate is not severable from the [Affordable Care Act’s] guaranteed-issue and community-rating requirements,” the department said in its legal filing.

The Trump administration’s move drew strong criticism from defenders of the healthcare law and some legal scholars, who noted how unusual it is for the Justice Department not to defend federal law.

Equally notable, three career prosecutors in the department withdrew from the case just before the administration announced the decision not to defend the healthcare law.

“Withdrawing from a case en masse like this, right before the brief is filed, is unheard of,” said Nicholas Bagley, a former Justice Department lawyer who now teaches at the University of Michigan Law School.

“These attorneys are civil servants. They routinely defend policies they dislike and make arguments they personally disagree with. That's the nature of the job. Their withdrawal signals that they believed the arguments in the brief went far beyond the pale -- that they were so frivolous they could not endorse them and remain faithful to their professional duties.”

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