The U.S. Justice Department has told a Texas federal court that it won't defend provisions in the Affordable Care Act that ban insurers from refusing to cover people with pre-existing conditions and from charging them more money.
"Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019", said America's Health Insurance Plans, one of the industry's main lobbying groups.
"The more uncertainty there is, the more the actuaries are going to be plugging into their projections for premium rates", says Sabrina Corlette, a research professor at Georgetown University's Health Policy Institute.
"This sabotage also has those with pre-existing conditions once again facing the prospect of denied coverage, increased costs, and medical bankruptcy".
In 2012, the U.S. Supreme Court ruled that the individual mandate - requiring Americans to purchase insurance and exacting a yearly financial penalty from those who don't - was not a constitutional use of the Commerce Clause, but that it was a lawful use of Congress' authority to require taxes. The letter acknowledges that the decision not to defend an existing law deviates from history but contends that it is not unprecedented.
That was what five Justices of the Supreme Court said when a different combination of five Justices voted to uphold the mandate as a form of tax.
Before the Affordable Care Act became law, insurance companies routinely declined health insurance coverage to people who had ongoing medical conditions or recent illnesses. Texas and other Republican-led states, including Utah, sued in February to strike down the entire law because Congress recently repealed a provision that people without health insurance must pay a fine. Yet he has granted standing to a group of 17 Democratic-led states that filed a brief on Thursday night arguing for the preservation of Obamacare, and will no doubt give them a fair hearing.
Senior House Democrats on health care committees called the administration's refusal to defend the federal health law a "stunning attack on the rule of law".
As many as 130 million adults under age 65 in the USA have pre-existing conditions that could result in their not being able to get insurance coverage in the private market, according to the Department of Health and Human Services.
The chances for that argument succeeding are viewed with deep skepticism by legal experts, in part because Congress itself indicated that the rest of ObamaCare could still stand without the mandate when it moved to repeal the tax penalty a year ago. "Congress has now kicked that flimsy support from beneath the law".
The 20 states that brought the lawsuit include Texas, Wisconsin, Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Missouri, Nebraska, North Dakota, South Dakota, South Carolina, Tennessee, Utah, Virginia, and Gov. Paul LePage for the State of ME and Gov. Phil Bryant for Mississippi. "A compelling defense of the law is right there in black and white", Verrilli said in a statement. Before the ACA passed, insurers commonly refused coverage for people with cancer, heart failure, diabetes, arthritis and even less serious conditions. Typically, the department defends federal laws in court.
Three career lawyers in the department's civil division withdrew from the case earlier Thursday and did not sign the brief.
Reyes said that the Department of Justice's decision "strengthens our case, and we look forward to seeing if the district judge agrees".
Dismantling the ACA could "push people into positions where they have to make decisions on whether they're going to get treatment or whether they're going to eat", said Charlie Quinn, CEO of RECAP, an Orange County nonprofit that provides social services. Whatever the lower courts decide, the case seems destined to reach the Supreme Court.
Texas said that without the fine in place the requirement to have health insurance is unconstitutional and the entire law should be struck down as a result.
The Texas case will be decided first by O'Connor, a conservative appointee of President George W. Bush.