Judge Reed O’Connor’s decision in a Texas federal district court case pertaining to the Affordable Care Act (ACA) may shortly assume center stage in news media reports since oral arguments were ended Sept. 5, 2018. It is possible that O’Connor’s decision on this legal case filed on Feb.28, 2018, may have been rendered by the time you read this article. Regardless of the verdict, Texas v. United States is likely to be just one of many cases under President Trump targeted at dismantling the ACA.
Brief Introduction to Lawsuit
The suit focuses on whether the law’s requirement that most Americans have health insurance is unconstitutional, but that comes with broader implications due to the Justice Department’s unusual decision earlier this year whereby it disagreed with the plaintiffs that the entire law should be struck down, but it decided that the individual mandate and several other central provisions, including protections for people with pre-existing conditions, would be fair game.
Filed by 20 Republican state attorneys general and governors of Maine and Mississippi, Texas v. United States will likely have major adverse ramifications for patients, medical providers, and insurers offering plans on the federal exchange. Defeat of the Republican-sponsored AHCA (resulting in a Trump tirade aimed at Senate Majority Leader McConnell) in 2017 did not halt President Trump’s goal of fully repealing the ACA. Instead, the strategy merely shifted to the non-legislative sphere (e.g., executive orders, DHHS rulings, and lawsuits).
Republican Reaction to Texas Case – Not All Are Happy
It is not only Democrats that are unhappy with the DOJ’s support of the Texas lawsuit. Even such ACA-opponent members of Congress as Lamar Alexander, Mitch McConnell, and Orrin Hatch were “caught off guard” that the US Department of Justice (DOJ) under the leadership of Jeff Sessions supported the Texas argument that both the individual mandate and required coverage for preexisting conditions are unconstitutional, according to an article in Health Affairs.
Since coverage for preexisting conditions is widely popular, most congressional Republicans are reluctant to oppose this ACA provision prior to the November congressional elections. They reacted instead to the Texas-filed lawsuit reaching Judge O’Connor’s court by introducing a preemptive bill on Aug. 23, 2018, to protect coverage for preexisting conditions—albeit with enormous loopholes.
Defendants: Who Are Opposing the Plaintiffs?
Under normal circumstances, the DOJ would defend legislated federal law. But due to Jeff Sessions’ refusal (as directed by President Trump) to offer a defense against the plaintiffs’ lawsuit, California’s attorney general (AG) Xavier Becerra intervened to provide the defense (along with the AGs of 16 other states plus Washington, DC).
The American Hospital Association and numerous other healthcare organizations have filed amicus briefs in support of the defense. Additionally, the American Academy of Family Physicians (AAFP) website notes that—besides the AAFP—the following physician membership organizations filed a joint amicus brief to resist this latest attempt to dismantle the ACA:
- American Medical Association;
- American College of Physicians;
- American Academy of Pediatrics;
- American Academy of Child and Adolescent Psychiatry
What Is the Texas Attorney General Seeking?
As lead plaintiff, Texas is demanding a preliminary injunction against the entire ACA in Texas until the constitutionality of aforementioned provisions are determined. This may seem like a legally far-fetched strategy; but Judge Reed O’Connor previously ruled against Obama Administration rules prohibiting healthcare providers from discriminating against transgender people, and another requiring states to reimburse federal premium taxes paid by Medicaid managed care plans (per an article in Managed Care magazine).
The following Republican-controlled states are supporting Texas in this lawsuit, according to the website of the National Conference of State Legislatures: Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wisconsin.
Pandora’s Box: Congressional Repeal of the Tax Penalty
Texas Attorney General Ken Paxton argued that a provision in the tax reform law passed in 2017. eliminating the IRS financial penalty for failure to have health insurance, was tantamount to a repeal of the ACA’s individual mandate —rendering the individual mandate itself unconstitutional.
Furthermore, Paxton argued that the elimination of this IRS financial penalty was central to the federal funding of each provision of the ACA, making all provisions of the ACA unconstitutional. Thus, the underlying argument presented by the plaintiffs in the Texas federal district court was for an injunction against the ACA in Texas until its constitutionality could be determined. Of course, the constitutionality of the ACA would need to be addressed in the United States Supreme Court.
The Congressional Budget Office (CBO) determined in November 2017 that elimination of the individual mandate alone would result in an increase of 4 million uninsured people in the United States in 2019 alone, and 13 million in 2027. Since the mandate was a mechanism to ensure health insurance coverage of the entire US population, and not just people requiring immediate medical care.
Determining Severability—Why It Matters
Paxton presented the legal issue of severability as one of the central issues in the Texas v. US case, his argument being that the ACA’s individual mandate could not be separated from some other key ACA provisions.
A June 2018 New York Times article suggests two specific ACA provisions could be derailed if the plaintiffs’ claim that the individual mandate cannot be separated from other ACA provisions is upheld. These two provisions are termed guaranteed issue and community rating.
While the guaranteed issue mandate is that insurance companies need to sell insurance to anyone who wants to buy it (such as someone with a preexisting condition), the community rating mandate is that every consumer who buys similar health insurance will be charged a similar price. The result is that in tandem these ACA provisions protect the capacity of patients with preexisting conditions to obtain health insurance that covers their most pressing health needs.
Judge O’Connor’s Record as a Republican Appointee
Based on Judge O’Connor’s judicial record, it is not probable that he will completely dismiss the plaintiffs’ arguments and rule in favor of the defendant (and especially since the federal government—as named defendant—is supporting the plaintiffs’ arguments).
On the other hand, the sudden elimination of ACA provisions in Texas via an injunction is widely recognized as likely to generate chaos in the Texas healthcare system (and for insurers in Texas). Given the mainly favorable public opinion of the ACA’s provision requiring preexisting condition health insurance coverage, it is generally expected that Judge O’Connor (a George W. Bush appointee) will attempt to bump the case to a higher Texas federal court stacked with Republican appointees in order to delay halting preexisting condition coverage in Texas.
This tactic will also expedite forwarding the case to the Supreme Court to decide the ACA’s constitutionality.
The Confirmation Impact of Kavanaugh as a Supreme Court Justice
Neil Gorsuch and Brett Kavanaugh were hand-picked as Supreme Court nominees by the Federalist Society because they both support the philosophy of weakened federal government authority in favor of states’ rights and prioritizing individual religious liberty.
Kavanaugh’s confirmation by Congress as a Supreme Court Justice is therefore expected to solidify a conservative court (including the tendency to decide cases in favor of state self-determination, and individual religious choices in the retail business realm). Since the Republicans control Congress, it is unlikely that Kavanaugh will not be confirmed (unless Democrats win control of Congress in the November elections, and Kavanaugh’s confirmation is delayed until December).
Adding Kavanaugh to the Supreme Court not only does not bode well for decisions impacting the constitutionality of the ACA, but also for women’s access in future to reproductive health services. For example, while serving on the US Court of Appeals (District of Columbia), Kavanaugh sided with the plaintiffs against allowing an insurance company’s usual employment-based contraceptive coverage in his dissenting argument framed on the right to religious liberty.
Concluding Thoughts – Preparing for 2019
The Trump Administration was unable to repeal the ACA legislatively, but may win their war against the ACA within two years by dismantling it through DHHS rules and lawsuits aimed at a Supreme Court determination of constitutionality. No matter if this creates undue financial hardship and preventable disabilities for millions of Americans.
President Trump, his cabinet appointees, and many of the congressional Republicans do not care about the wide-ranging public health impact—but professionals engaged in the provision of healthcare coverage or services should care.
Newsflash, President Trump and Attorney General Sessions: harnessing the legal and judicial systems to gut provisions or overturn the ACA is a bad idea. Returning to the pre-ACA healthcare system status quo will just cost states and the federal government billions of dollars to care for a more unhealthy and disabled population in the long run.