Obamacare Fight Puts Texas Judge in Hot Seat as Election Looms

(Bloomberg) -- U.S. voters are saying health care is their No. 1 issue, but it’s a judge -- not the midterm congressional elections next month -- who may decide the future of the Affordable Care Act.

A federal judge in Texas could rule any day on the politically explosive question of whether to wipe out Obamacare, including its popular provision requiring insurers to cover pre-existing conditions.

It’s a ruling with huge policy implications and -- depending on the timing -- political ones, too. If U.S. District Judge Reed O’Connor in Fort Worth guts the Affordable Care Act before the Nov. 6 congressional elections, he will hand a potent weapon to Democratic candidates who are already assailing long-running Republican efforts to repeal the law. A ruling after the election that declares Obamacare unconstitutional could throw the insurance market into chaos -- as the six-week enrollment period for 2019 health-care coverage begins Nov. 1.

Law professors say that these circumstances put a lot of pressure on O’Connor, who was appointed by President George W. Bush and has ruled against Obamacare twice, albeit in less momentous cases than the one before him now. After holding a Sept. 5 hearing for arguments on the case, the judge is under no deadline to rule -- and rulings often take months.

“The closer we get to the election the more people will suspect the timing of the decision is being influenced by political considerations,” said Jonathan Adler, a law professor at Case Western Reserve University. “Its hard to avoid that speculation.”

Calling the health-care law “a lightening rod for both parties,” Nathan Cortez, a law professor at Southern Methodist University, said it would be “highly, highly inappropriate” if the judge has finished drafting his ruling but is sitting on it until after the election.

Cortez said a decision ahead of or during this year’s sign-up period wouldn’t be unusual because judges frequently rule on government regulations based on when they go into effect.

Whatever O’Connor decides almost certainly won’t be the last word on the law. The ruling would probably be put on hold while the losing side appeals, first to the regional appeals court in New Orleans and then to the U.S. Supreme Court.

Still, a ruling invalidating the law would sow chaos in the health insurance market because “it isn’t set up to deal with the pre-ACA world anymore,” University of Houston law professor Seth Chandler said.

Speculation that O’Connor will deal a blow to Obamacare is fueled by the judge’s history of favoring conservative positions on hot-button issues, including immigration, gun control and transgender rights -- plus his two previous rulings against Obamacare.

In one previous ACA case, Texas and five other states won a ruling from O’Connor invalidating Obamacare’s health insurance provider fee, which was imposed on states to help fund the program. The decision meant the states were off the hook for billions of dollars.

In another, a Texas-led coalition of states and Christian health-care providers convinced O’Connor that Obamacare regulations barring discrimination in health care on the basis of “gender identity” violated religious freedom.

In the current case, Texas is leading a coalition of 20 state attorneys general who contend Congress’s decision last year to zero out the tax penalty owed by those fail to obtain health insurance requires the court to strike down the entire law.

The Supreme Court in 2012 upheld most of the law under the exercise of federal taxing power. The states argue now that, without the tax and the mandate to buy insurance, the entire law is invalid under the high court’s reasoning in the earlier case.

The Trump administration has declined to fully defend the law and urged the judge to strike down several key provisions, including the individual mandate and provisions requiring insurance companies to cover individuals with preexisting health conditions.

The Justice Department argued for sparing the rest of the law, which includes the Medicaid expansion, the employer mandate, health exchanges, premium subsidies, changes in Medicare drug benefits and the requirement that children can be covered on their parents’ insurance plans until age 26.

Even some legal scholars who are against Obamacare say the states’ case is weak because legislative intent is key. Congress eliminated the tax penalty but has declined repeatedly to overturn the rest of the law.

“This lawsuit is bogus and I’m not someone who supports the ACA,” said Chandler, the Houston professor. “I’d hope the judge would see this is a matter best left to the political process and it’s very much in the political process.”

©2018 Bloomberg L.P.