DOJ lawyers try new tricks to undo Obamacare. Will it work?

Reviewed by Alina Shrourou, B.Sc. (Editor)Jul 12 2019

Once again, the fate of the Affordable Care Act is before the courts. The health law has traveled all the way to the Supreme Court (twice!) and is highly likely to make another visit.

On that path, the law made a stop Tuesday before a three-judge panel of the 5th Circuit Court of Appeals in New Orleans. Both sides presented arguments, interrupted, at times, by sharp questions from two of the judges.

For those just tuning in, the Trump administration is not defending the nine-year-old ACA.

It instead has sided with the 18 "red" states that seek to have the law overturned.

In doing so, Department of Justice lawyers appeared to use strategies and take positions that sounded somewhat unconventional to a layperson. But are they?

KHN checked with some legal experts for their take.

For starters, this is the third time the administration has changed its position. Does this often happen?

No. It's unusual for an administration to shift its own legal opinions during the case, say experts.

When the lawsuit was filed, the administration said only the parts of the law tied to a requirement that most Americans carry insurance, the so-called individual mandate, should be tossed. (That's a pretty big part, which includes protections for people with preexisting conditions.)

The red-state plaintiffs, conversely, argued that the entire law should go, pointing to Congress' 2017 vote to zero out the individual mandate's tax penalty. The Supreme Court's 2012 decision to preserve the ACA hinged on that penalty.

But, last December, a United States district court judge in Texas sided with the states, saying the whole law should be tossed, which would affect provisions as diverse as the preexisting condition protections, Medicaid expansion and calorie counts on restaurant menus.

That's when the Trump administration shifted its position to agree that, indeed, the whole thing had to go.

And that's rare.

"You don't usually say, 'Oh, never mind,'" said Tom Miller, resident fellow at the conservative American Enterprise Institute. "It's unusual to do that flip."

But that's not the last flip. Another change came up in legal papers filed shortly before the Tuesday hearing and in oral arguments.

DOJ attorney August Flentje told the appeals court that, well, maybe only those provisions of the law that directly affect the plaintiffs — the 18 states — should be struck.

"It's complicated," he admitted, calling to mind a similar statement made in 2017 by President Donald Trump amid the repeal debate in Congress: "Nobody knew that health care could be so complicated."

Even as this legal challenge works its way through the courts, the ACA remains the law of the land. The evolving legal positions, however, are fodder for professors.

"I'm teaching a class this fall and this gives me more material," said Miller. "But if I had to consistently try to argue a position at the DOJ, I would go crazy."

So, the government wants to skewer some provisions of the law, but not others — and have those changes apply only in some states. How would that work?  

Questions about that argument came from 5th Circuit Judge Jennifer Walker Elrod, appointed by President George W. Bush in 2007.

The government wants to have it apply "in certain states and strike it down in certain states?" Elrod asked. "The government believes that's a possibility?"

Unasked but implicit: How would some states enforce the law and not others?

Flentje said "a lot of that would have to get sorted out" but not until after all the appeals in the case are exhausted.

Behind the argument may well be an ongoing dispute in the legal community about whether lower-court judges should make decisions that have nationwide implications, said John Malcolm, director of the conservative Heritage Foundation's Edwin Meese III Center for Legal and Judicial Studies. Still, it would be difficult, he said, for the ACA to be declared unconstitutional in some states, but remain in effect elsewhere.

Beyond that legal question, such a position has financial and policy implications for consumers and state regulators.

"It would create a very untenable situation for the rest of the states," said Mila Kofman, executive director of the DC Health Benefit Exchange Authority, where individuals and small businesses buy health insurance.

Some of the very sickest people in the states where the rules were dropped would likely move to states keeping the preexisting condition protections so they could maintain their insurance, she said. That could drive up costs in those areas.

Arguments Tuesday revolved around whether parts of the law were "severable" from other parts. Did it seem the government wants it both ways — to toss the entire law, but also keep parts of it?

Elrod again queried Flentje.

The government wants the health insurance provisions to go, but "you would leave in the calorie guide?" Elrod asked, referring to the ACA's requirement that chain restaurants display calorie counts of menu items.

Flentje said the government's "argument on scope is totally separate from argument on severability."

She pressed him for clarification: "So, are you saying it's entirely inseverable, or arguing that some parts can be kept?"

The government's position remains that "the entire act is not severable," he replied, adding, however that the judgment could be "narrowed a bit to provisions that injure and impact the plaintiffs."

He suggested some of those details would still have to be worked out.

"They've gone from saying a couple of provisions have to go to the whole thing has to go, to now there are some things we might not have to get rid of," said Miller. "But they've never defined how far back down the ladder to go."

A ruling by the appeals court isn't expected for weeks or months, and some questions may well return to the district court.