Obamacare Legal Attack Seen as Gift From Trump to Democrats

(Bloomberg) -- The Trump administration handed Democrats a political gift by arguing in court that Obamacare’s most popular provisions are unconstitutional, just five months before a midterm election in which health care ranks as voters’ top issue.

Repealing Obamacare has been a rallying cry for Republican candidates for the past eight years. But some GOP lawmakers and political operatives sounded warnings on Friday about the impact of the Justice Department’s decision to side with Texas and other states in a lawsuit alleging that because Congress nullified the Affordable Care Act’s individual mandate penalty, the rest of the law is invalid.

That includes the 2010 law’s rules protecting people with preexisting conditions and health insurance subsidies, which are life-and-death issues for many Americans with low to moderate incomes.

“You’ve got very sympathetic populations that are affected by those conditions so to somehow adversely affect them is not a politically wise move,” said Representative Tom Reed, a New York Republican, signaling opposition to the administration’s decision.

Trump Sides With Texas, Won’t Defend Obamacare in Court

Health care ranked as the top issue for voters in a a national NBC/Wall Street Journal poll released Thursday, and among those for whom it was the most important factor in their vote, a striking 67 percent prefer a Democratic-controlled Congress. A CBS News poll of 64 competitive House districts also found that health care is the top issue for voters, ahead of jobs and wages as well as immigration.

Many Democrats said health care is the GOP’s greatest political vulnerability in the November congressional elections and by siding with Texas in the court case Thursday night, President Donald Trump’s Justice Department poured gasoline on already burning fire.

“With 130 million people who have a preexisting condition, there are a lot of people in swing districts waking up to the news today that Republicans are suing to try to let insurance companies discriminate against people with preexisting conditions,” said Jesse Ferguson, former deputy director of the House Democrats’ campaign arm.

Dozens of Democratic candidates challenging incumbent House Republicans have already made Obamacare, and the GOP’s efforts to repeal it, a central part of their campaigns.

Democratic Target

Among them is Andy Kim, a former Obama administration national security aide who is running to unseat New Jersey Republican Representative Tom MacArthur, sponsor of an amendment to the GOP’s 2017 Obamacare repeal that allowed states to seek waivers to charge higher premiums to people with preexisting conditions.

MacArthur’s district is a target for Democrats attempting to flip at least 23 House seats the party needs to take control of the chamber after the November election.

“I’m running for Congress because last year, during the lead up to my son’s birth, our doctor told my wife and I that our son may not survive or have a serious health condition for the rest of his life,” Kim said Friday. “No family should have to go through that and worrying how to pay for it all."

Keeping Their Distance

Republican Leonard Lance of New Jersey said the Justice Department should back off its effort, and said that if courts did rule against preexisting protections then Congress should act. Lance, who faces a tough reelection race, distanced himself from his party’s health-care legislation and the tax law that repealed the individual mandate.

"I didn’t vote for the health care bill," he said. "I didn’t vote for the tax bill."

Republican Senator Susan Collins of Maine, who voted for the tax bill after getting promises from Majority Leader Mitch McConnell on health care, attacked the Justice Department’s action in a statement, saying it “could ultimately result in higher costs for millions of Americans and undermine essential protections for people with preexisting conditions, such as asthma, cancer, heart disease, arthritis and diabetes.”

She urged both parties to work together to improve health markets instead.

Constitutional Question

But Obamacare foes and Trump loyalists supported the administration’s position.

“I still believe the ACA was unconstitutional in many aspects and passing under the auspices of the tax argument was not proper,” said Chris Collins, who Represents a solidly Republican district in Upstate New York.

Jesse Hunt, a spokesman for the House GOP campaign arm, wouldn’t comment on the administration’s decision, but blamed Democrats for disrupting health care markets.

“Democrats destroyed the health-care system as we knew when they rammed Obamacare down our throats,” Hunt said.

Insurers have faced risks tied to the Trump administration’s efforts to undermine the Affordable Care Act since his election. Health insurance costs already are rising, and recent reports by the nonpartisan Congressional Budget Office say two actions by Republicans have fueled the rises: the GOP tax law’s elimination of the individual mandate, which allows healthy people to drop coverage without a penalty and thus leading to a costlier risk pool, and Trump’s decision to cut off “cost-sharing” payments to insurers who take on sicker patients.

It will likely take years for the case to wend its way through the courts, meaning the uncertainty could linger over insurers for some time, according to Spencer Perlman, an analyst at Veda Partners. If the court ends up siding with the Trump administration and the Republican states that brought the suit, the consequences would be significant, Perlman said.

“The decision would cut out the heart of the ACA and completely rewire the health insurance markets,” he said. “In practice, this likely would exclude from the commercial health insurance markets individuals with preexisting conditions, individuals with illnesses that are expensive to treat, and many individuals over the age of 50 or 55.”

Jonathan Adler, a law professor at Case Western Reserve University and an architect of a lawsuit that came within two Supreme Court votes of gravely damaging the ACA in 2014, said the current legal effort supported by the administration probably won’t succeed.

“What the states are really trying to do is bootstrap a claim against other parts of the law, and there’s absolutely no basis for this,” Adler said in an email. “Congress in 2010 may have thought that a mandate may have been an essential component of the ACA, but a subsequent Congress indicated otherwise by eliminating the penalty without altering the other parts of the law. This is why the states’ arguments about severability (and that accepted by DOJ) is wrong.”

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