Legal eagles who pay attention to the courthouse fortunes of the Affordable Care Act could tell something weird and bad was in the wind last Thursday, when three career attorneys at the Department of Justice abruptly withdrew from the team defending the law against a right-wing attack by Texas and 19 other red states.
“Forget the canary — this is more like the shrieking hyena in the coal mine,” Georgetown University law professor Marty Lederman tweeted that afternoon. His guess was that the “Trump DOJ” was “perhaps about to argue that ACA is 100% invalid.”
He was close. Only a couple of hours later, the Justice Department filed a brief ending its defense of the law against the Texas case. The department didn’t argue that the law was 100% invalid, which is the Texas position. But it asserted that two key provisions of the law, which protect Americans with preexisting conditions from being denied coverage or surcharged for it, are unconstitutional.
It isn’t unprecedented for the government to decide against defending a federal law in court, but the bar for doing so is very high. And it may be unprecedented for virtually the entire legal team representing the government in a case to withdraw en masse. (They were replaced by three relative newcomers to the department.)
“For three such respected DOJ attorneys to [withdraw] simultaneously — just hours before a major filing, and without replacement by any other career lawyers other than a rookie — is simply flabbergasting,” Lederman wrote after the brief was filed.
The Justice Department’s action won’t be definitive, at least not right away. The Texas lawsuit is still before a federal judge in Fort Worth. In any event, the DOJ asked the judge to issue a declaratory judgment in advance that the provisions will become unconstitutional as of Jan. 1, which is when the monetary penalty for not having health insurance is reduced to zero.
Since Thursday, experts in the law have been parsing the Justice Department’s action for its potential impacts on the politics of healthcare in America, on the cost of health coverage, and on the credibility of the department itself. Let’s take them in order, keeping in mind that from the standpoint of the public interest, it’s all bad news.
Politically speaking, the protections for those with preexisting conditions or medical histories consistently have ranked among the most popular provisions of Obamacare, crossing partisan lines. Overall, 69% of respondents to the latest poll on the Affordable Care Act by the Kaiser Family Foundation favored prohibiting insurers from denying coverage because of an applicant’s medical history. That included 63% of Republicans, 65% of independent voters and 75% of Democrats. A poll by Politico in March 2017 was even stronger, with 71% of respondents agreeing that these protections should be included in the GOP bill to replace the healthcare act.
That suggests, as Drew Altman of the Kaiser Family Foundation observed Monday in his column at Axios, that Trump has now given Democrats “a big health care opening for the midterms.”
Although the denial of protections under the Justice Department position would apply only to insurance customers in the individual market, Altman observed, “it may not play that way in the real world.” What happens with Obamacare resonates with policy-holders across the partisan spectrum, in part because the ACA sets standards for coverage that even big employers view as a benchmark.
Polling already shows that the public generally holds Republicans and the Trump administration responsible for the most recent run-ups in premium costs and other issues with the healthcare law, Altman adds. Democrats have accused Republicans of sabotaging the law with good reason: Every initiative Trump or the GOP Congress has taken with regard to the Affordable Care Act has posed the prospect of higher premiums or the proliferation of junk health plans — those that come with lower prices, but materially worse coverage.
The Justice Department’s claim that key ACA provisions are unconstitutional would almost certainly exacerbate that trend. At a minimum, the argument will inject more uncertainty into the insurance market. Previous Trump initiatives remove incentives for healthier, younger Americans to purchase ACA-compliant insurance. By leaving riskier customers in the insurance pool, that prompts insurers to raise their rates to compensate.
When the GOP-controlled Congress undermined the law’s individual mandate by reducing its penalty to zero as of next January, that pointed to an even riskier profile for the pool, another spur to higher rates. But insurers really don’t know what the pool will look like, which gives them reason to bail out on this market segment entirely.
Sabrina Corlette, a research professor at the Georgetown University Health Policy Institute. “Are some insurers going to cry uncle?” Georgetown University healthcare expert Sabrina Corlette asked in the Wall Street Journal. “Maybe there are some companies that say, ‘Enough already.’”
Whatever the pricing strategy, there can be little doubt that Republican policies point to a meaner, less serviceable health insurance environment. The administration is determined to open the gates wider to low-benefit plans that currently can be sold only as short-term insurance. As we’ve reported, typical plans of this type marketed currently often exclude preexisting conditions or maternity coverage, and restrict coverage even for hospitalization — one widely marketed plan won’t cover hospital admissions on a weekend under some circumstances.
Elimination of protection for preexisting conditions also opens the door for insurance company abuses such as recessions — the search for undisclosed medical histories that can justify denying claims, even when the undisclosed conditions have nothing to do with the claim. Prior to the Affordable Care Act, the list of conditions for which applicants could be rejected often could run to dozens of pages.
To legal analysts, what’s especially significant about the Justice Department’s filing is its transparent shallowness. “Just how indefensible does an argument in a government brief have to be to cause all the career litigators… to withdraw?” Georgetown’s Lederman asked in a blog post.
Pretty darn indefensible, was his answer. The department is duty-bound to defend federal laws in court, even when its lawyers or leaders disagree with the law, as long as reasonable arguments can be made in their defense. When the DOJ does withdraw support, it’s required by law to give Congress its reasons, in writing. The letters that result, dating back to 1979, are archived on the department website. They give a flavor of the standards that must be met.
Often, these standards include clear indications that a provision of the law is unconstitutional or likely to be declared unconstitutional. The best example may be the Obama DOJ’s 2011 decision not to support the Defense of Marriage Act, which declared marriage to be only between a man and a woman, in court. As then-Atty. Gen. Eric Holder informed Congress, federal courts, including the Supreme Court, already had started ruling against restrictions on the participation of gays and lesbians in society. It was clear that society had moved past the “moral disapproval of gays and lesbians and their family and intimate relationships” that underlay the act, Holder wrote, making the law even more questionable.
None of that applies to the Affordable Care Act. Atty. Gen. Jeff Sessions’ report to Congress on last week’s action is remarkably strained. It’s based on the idea that Congress meant the individual mandate and the protections for preexisting conditions to stand or fall together. Since Congress effectively canceled the individual mandate by reducing its penalty to zero, it must have intended to the protection to die with it.
The problem there is that Congress specifically took the opposite view — it canceled the mandate penalty via the tax cut bill enacted in December, but left the protections for preexisting conditions in place. Moreover, the tax cut act doesn’t render the individual mandate unconstitutional, as Sessions says. “Instead it is, at most, toothless,” Lederman observed. And if it’s not unconstitutional, “That’s the end of Texas’ case.”
That leads to the question of how it could be true that no one in the Department of Justice could muster a reasonable argument in the ACA’s defense — the bar the DOJ must clear to abandon defense of a law.
The only clue, outside of the known animus of the Trump administration to Obamacare, comes from the identities of the lawyers who stepped in to file the department’s brief after three career lawyers bailed out. They’re largely recent appointees with records as warriors for right-wing legal groups and Trump himself. They include Acting Assistant Atty. Gen. Chad Readler, who was a member of the incoming administration’s “beachhead team” imposing ideological purity on the DOJ’s civil rights division; and Deputy Assistant Atty. Gen. Brett Shumate, who has defended Trump in a lawsuit asserting that he’s violating the constitutional rule against presidents accepting “emoluments” by profiting from foreigners staying in Trump’s hotels.
Shumate’s involvement in the case drew fire late last year from Sen. Dianne Feinstein (D-Calif.) who asked Sessions to justify using DOJ lawyers to defend Trump in cases about his private businesses.