Trump Administration Says Obamacare Pre-existing Conditions Coverage Requirement is Unconstitutional

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Attorney General Jeff Sessions is declining to defend several key provisions of the landmark health care law from a lawsuit by 20 states.

 

By Craig Idlebrook/GluCraig

On Thursday, Justice Department lawyers filed paperwork in a federal lawsuit stating that the Trump administration would no longer defend key parts of the Affordable Care Act, including provisions barring health insurance companies from denying coverage or charging more because of pre-existing conditions like type 1 diabetes. This move could expediate another Supreme Court showdown for the law.

The filings were in response to a lawsuit that attorneys general in 20 states have filed against the ACA, also known as Obamacare in U.S. District Court in the Northern District of Texas, according to a Politico report. That lawsuit asserts that Obamacare became unconstitutional once Congress repealed a tax penalty against those who don’t have health insurance; that tax was repealed during the tax code overhaul of 2017. The plaintiffs in the lawsuit are basing this argument from a 2012 Supreme Court ruling in which at least Chief Justice John Roberts found that the ACA was constitutional largely because it was a form of tax.

In a letter to Congress on Thursday, U.S. Attorney General Jeff Sessions wrote that the Justice Department will not defend the mandate that individuals carry health insurance because, he reasoned, that mandate is no longer constitutional without the penalty tax. Attorney General Sessions further stated that the requirement that health insurance companies provide coverage for those with pre-existing conditions at general market rates was too entwined with the individual mandate to stand on its own. A guarantee of same-price coverage for those with pre-existing conditions coverage could not survive without the mandate, he wrote, “because otherwise individuals could wait until they become sick to purchase insurance, thus driving up premiums for everyone else.”

Mr. Sessions did state, however, that the Justice Department still finds parts of the ACA constitutionally valid – namely, the expansion of Medicaid coverage for states that opt for it and the establishment of the health insurance marketplace, where individuals can shop for coverage. The ACA is being defended in court by attorneys generals in 15 states.

Republicans in Congress have long attempted to repeal or largely rewrite the ACA through legislation, only to have that effort come up short, often by one or two votes.

If the case eventually makes its way to the Supreme Court, it will go before a Court that has largely the same ideological makeup as the one that ruled in favor of the ACA in 2012, with Justice Neil Gorsuch replacing Justice Antonin Scalia, who passed away in 2016. In the 2012 case, conservative Chief Justice Roberts sided with his more liberal colleagues in favor of the ACA largely based on the strength of the argument that the ACA represented a tax that Congress had the authority to levy. In a subsequent 2015 ruling, the Justices seemed to go a step further towards upholding the validity of the ACA, with a 6-3 ruling allowing the government to offer subsidies to low-income individuals to afford insurance coverage. However, the repeal of the tax penalty may reset the calculus of the constitutionality of the law in the eyes of Justice Roberts, and possibly other Justices.

Should that happen, people with type 1 diabetes and those with other pre-existing conditions may find themselves navigating a health insurance marketplace that would be similar to the way it was before the ACA took effect. In the pre-ACA days, people with pre-existing conditions could be charged more for health insurance than those without pre-existing conditions or not be given health insurance at all.

We’ll provide continuing coverage of this lawsuit as it progresses through the federal court system.

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