The entire ACA thus must fall,' Trump's DOJ tells Supreme Court

The Trump administration is arguing that the ACA "must fall" after Congress eliminated the tax penalty.

By Marcia Coyle | June 26, 2020 at 09:41 AM | The original version of this story was published on The National Law Journal

The Trump administration is arguing that the U.S. Supreme that the Affordable Care Act “must fall” after Congress eliminated the tax penalty on individuals who failed to purchase health insurance.

The individual mandate to buy health insurance cannot be severed from the signature Obama-era health care law, U.S. Solicitor General Noel Francisco argued in the Justice Department’s brief, because of how connected it was to other features of the popular law.

“Nothing the 2017 Congress did demonstrates it would have intended the rest of the ACA to continue to operate in the absence of these three integral provisions,” Francisco wrote. “The entire ACA thus must fall with the individual mandate.”

The Justice Department’s brief arrived at the high court during a historic pandemic that has killed more than 100,000 Americans and infected millions more across the globe. Access to health care is expected to be a central issue of the 2020 presidential election, and the justices could hear the Obamacare dispute weeks before Americans head to the polls. A ruling is not expected until 2021.

California Attorney General Xavier Becerra, who is leading a coalition of Democratic-led states defending the health law, said in a statement Thursday night that the Affordable Care Act has been “life-changing” and crucial during the pandemic. “Now is not the time to rip away our best tool to address very real and very deadly health disparities in our communities,” he said.

The Trump Justice Department reportedly clashed with the Trump White House over whether to continue to urge the courts to scrap the entirety of the Affordable Care Act. U.S. Attorney General William Barr in May argued the administration should defend parts of the law, or face potential political consequences, CNN reported. A Republican strategist recently told The New York Times: “Politically, it’s pretty dumb to be talking about how we need to repeal Obamacare in the middle of a pandemic.”

An estimated 29.8 million people would lose their health insurance if the Affordable Care Act were ended, more than doubling the number currently without insurance, according to the Economic Policy Institute. The Justice Department’s brief does not mention the pandemic.

The dispute over the Affordable Care Act centers on action in Congress in December 2017 that eliminated the health law’s tax incentive to buy health insurance by reducing the penalty—called the “shared-responsibility payment”—to zero. Congress, however, did not repeal the law, as many House and Senate Republicans, and the president himself, have called for.

“Because it cannot reasonably be interpreted as a tax, the mandate in its current form exceeds Congress’s enumerated powers,” Francisco told the justices Thursday in the government’s opening brief, filed shortly before midnight. Without the tax penalty, the mandate, he said, can only be understood as a “straightforward command” to maintain insurance coverage and that command, as the Supreme Court held in 2012, is unconstitutional.

Francisco appeared on the Justice Department’s brief with Jody Hunt, the soon-to-be-departed head of DOJ’s civil division, and with Jeffrey Wall, the principal assistant who will become acting U.S. solicitor general when Francisco departs next week. Nicole Frazer Reaves, who arrived in the solicitor’s office weeks ago from the boutique firm Cooper & Kirk, where she was an associate, also appeared on the brief.

‘The case is a partisan stunt’

Texas, represented by state solicitor general Kyle Hawkins, also submitted its response Thursday to the petition, filed by California and other states in support of the law.

The Republican-led states argued in their new brief that, because the amended health law no longer produced revenue, it could no longer be construed as a “tax,” the rationale for the U.S. Supreme Court’s 5-4 decision in 2012 upholding the constitutionality of the individual mandate to buy insurance. What was left, lawyers for the states contend, was an unconstitutional “command to buy insurance.”

Trump’s U.S. Justice Department declined to defend the health statute in the lower courts but argued, more narrowly in the district court, that only the ACA provisions that directly regulate the individual insurance market were inseverable. The Justice Department later revised its argument and declared the whole law was now invalid.

Texas and the Justice Department are defending a ruling by the U.S. Court of Appeals for the Fifth Circuit that declared the whole health law invalid. The court, however, punted on what parts of the law might be able to stay in place. The underlying Texas trial judge’s ruling against Obamacare has been denounced as “unmoored” and “embarrassingly bad.”

“The case is a partisan stunt that’s been roundly condemned by lawyers on both sides of the aisle. It should’ve been laughed out of contention long ago,” law professor Nicholas Bagley, who has written extensively on the health law, said in a piece at The Atlantic last year.

More than three-dozen amicus briefs have been filed supporting California and the U.S. House from a wide range of parties, including health and economic scholars, tribal organizations, 44 counties, cities and towns, child welfare organizations, black lung clinics, hospital associations and others.

O’Melveny & Myers partner K. Lee Blalack II, counsel to Blue Cross Blue Shield, told the justices that a ruling that the entire ACA is unconstitutional a decade after its enactment “would upend” the country’s health insurance markets.

“And it would do so in the middle of a national economic and public health crisis, where the ACA’s individual markets—including its individual market regulations and subsidies for low-income Americans—ensure life-saving access to health care for millions of Americans,” he wrote.

Representing 47 U.S. Senate Democrats, Cooley partner Elizabeth Prelogar urged the court to sever the amended section of ACA zeroing out the penalty, if it finds the section is unconstitutional. “Where Congress amended a single section of the ACA with a scalpel, the Court need not, and should not, destroy the ACA with a sledgehammer,” Prelogar wrote. But, she added, “as a threshold matter,” that section is constitutional.

Amicus briefs supporting Texas are due July 2. No argument date has been scheduled yet.