Friday, December 4, 2020

Obamacare faces Supreme Court remade by Trump

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Severability is a central issue to the Obamacare case, California v. Texas. The red states and DOJ argue the law was rendered unconstitutional after Congress in its 2017 tax-cut package struck the penalty for not having health insurance — but left the individual mandate itself on the books. Since the Supreme Court previously ruled the penalty is what made the coverage mandate constitutional, Obamacare’s challengers contend the mandate alone, even a now-toothless one, is problematic. And if the mandate falls, so must the rest of the law, they say.

Supporters of the health care law, and even some critics, believe that argument is faulty. Even if the mandate is now unconstitutional, they say it can be cleanly removed from the law without damaging the insurance protections and its many other provisions, like Medicaid expansion to millions of low-income adults, lower drug costs for seniors and reforms to how health care is delivered. Congress’ decision to scrap just the mandate penalty after the GOP’s broader Obamacare repeal effort collapsed is proof that lawmakers believed Obamacare could survive without penalizing people who forgo coverage.

“The 2017 change in the tax law — that this made the entire law unconstitutional is a really long mile to travel, constitutionally and logically,” said California Attorney General Xavier Becerra, who’s leading Obamacare’s legal defense.

Health insurers who are now largely profiting from Obamacare say that the elimination of the mandate penalty hasn’t hurt the law’s insurance marketplaces or undermined its coverage protections. Even as the Trump administration urges the court to overturn Obamacare, it also brags about how well the law’s insurance marketplaces are performing on its watch.

“The individual markets have remained stable, and in fact they’ve seen more plans participating in certain markets, premiums going down,” said Pratik Shah, counsel for the main insurance trade association America’s Health Insurance Plans.

Though the Obamacare lawsuit was seen as a longshot when it was introduced almost three years ago, it’s passed reviews from Republican-appointed justices who’ve reviewed the case. A federal judge in Texas ruled the entire law should be thrown out, and a divided appeals court panel ruled that the individual mandate was unconstitutional without saying if other parts of the law should fall. Critical legal experts attributed those rulings more to the judges’ partisan leanings than sound legal theory.

Conservative Justices Samuel Alito and Clarence Thomas ruled against Obamacare in the two previous major challenges and are expected to do so again. Thomas and Trump’s first appointee, Neil Gorsuch, have shown unease with the court’s use of severability to essentially edit laws passed by Congress

Trump’s second appointee, Justice Brett Kavanaugh, is viewed as a likely swing vote in the case. A decision he authored this summer embracing the severability doctrine was seen by court watchers as a cue of how he might rule on the health care law.

Few expect that the chief justice, after authoring two previous opinions upholding Obamacare, would now throw out the law. However, the law’s challengers see a potential opening. They point out that Roberts’ opinion in a 2015 case on Obamacare subsidies explicitly linked the individual mandate penalty to the law’s other “interlocking reforms,” including the protections for preexisting conditions. At the time, the Obama-era Justice Department also argued that the mandate was essential to making the market’s insurance protections work.
“At a minimum you can’t separate the individual mandate from the [insurance protections], which the Supreme Court has said are intertwined,” said Robert Henneke, general counsel at the Texas Public Policy Foundation, a conservative think tank that helped bring the lawsuit. In his view, the Supreme Court should at least strike down those protections, including provisions barring insurers from denying people coverage or charging them more because of a medical condition.

This is a scenario that stirs anxiety on Capitol Hill and for the health care industry, given the inability of Republicans and Democrats to come together on even small changes to Obamacare.

“We so fundamentally disagree on how to solve the problem,” said a senior GOP congressional aide. “I think we all agree that we should protect people with pre-existing conditions through a mandate of some form, but we fundamentally disagree on how to do it.”

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