The Affordable Care Act is Under Fire Again in Federal Court

The long-disputed fate of the Affordable Care Act played out anew in a Fort Worth courtroom Wednesday as a score of Republican-led states sought to persuade a federal judge to halt the sprawling health-care law.

In the latest legal threat to the 2010 law, the coalition of GOP attorney’s general and a pair of governors argued that a recent change in federal tax policy has made the ACA unconstitutional. For the short-term, they asked a federal judge to grant a preliminary injunction that would suspend the law while the rest of the case unfolds — a possibility that could throw significant aspects of the U.S. health-care system into chaos.

U.S. District Judge Reed O’Connor, a conservative jurist appointed by President George W. Bush, did not immediately rule on the request or indicate when he would do so. He asked more frequent and pointed questions of the parties arguing in favor of the ACA, while asking the opponents mainly about the impact of a preliminary injunction or an outright ruling against the law.

The hearing, part of a lawsuit filed in January by the Texas attorney general and his allies, drew heightened attention for its timing, coming amidst the contentious Senate confirmation hearing for Brett Kavanaugh, Trump’s nominee to the Supreme Court. Advocates on both sides of the case widely predict that the O’Connor’s rulings will be appealed and could well become the first ACA case to reach the high court with the conservative Kavanaugh as a member.

The nearly four hours of legal sparring at Wednesday’s hearing shone a light on the partisan acrimony surrounding the statute that, several years after it extended health coverage to millions of Americans, remains a favorite Republican whipping post and is serving as a convenient rallying cry for Democratic candidates in this year’s midterm elections.

In an abnormal arrangement, attorneys for the federal government — the defendant in the case — sat on the same side of the courtroom as the plaintiff’s lawyers during Wednesday’s hearing. The odd seating pattern stems from the fact that the Trump administration is largely agreeing with the plaintiffs who are suing. In June, the Justice Department saying in a court filing it would not defend the law.

A group of Democratic attorneys general, who have won standing in the case, were left to argue Wednesday for the health law’s preservation.

The ACA has been upheld twice by the Supreme Court. In a 2012 ruling in a case challenging the law’s requirement that most Americans buy health insurance, the majority reasoned that Congress’s authority to set taxes made that mandate constitutional. The law contains a tax penalty for people who flout the requirement.

The lawsuit, filed in February by Texas Attorney General Ken Paxton (R) and his allies, contends essentially that the high court’s opinion is out of date. In an argument that a variety of legal scholars regard as weak, they argue that there is no longer a tax because the Republican Congress late last year decided to end the penalty and that the whole law is thus unconstitutional.

At the hearing, Darren McCarty, an assistant Texas attorney general, argued that once the penalty is removed, “the entire ACA falls.”

Arguing for the Trump administration, Brett Shumate, a deputy assistant attorney general, agreed that, once the penalty ends in January, the law’s insurance requirement “must be held unconstitutional.”

Justice’s position does not go as far as that of the GOP attorneys general. It agrees that, without the mandate, required benefits and consumer protections will not be valid, either. The protections include a highly popular part of the law that prevents insurers from charging more to people with preexisting medical conditions — or refusing to sell them coverage.

Unlike the plaintiffs’ argument, the administration believes that many other aspects of the law can survive because they can be considered legally distinct from the insurance mandate and consumer protections.

Shumate, however, asked the judge not to grant a preliminary injunction — at least not soon — saying that it would “cause chaos in the insurance markets.” The next yearly shopping period for health plans through ACA insurance marketplaces is scheduled to start in November. The administration would prefer that the judge simply rule on the case after giving the parties more time to present evidence, Shumate said.

Depending on how broad it was, an injunction also could stop premium subsidies on which millions of consumers rely, or even reverse a variety of Medicare payment changes built into the law.

Arguing on behalf of the Democratic states, a pair of California deputy attorneys general told the judge that the law remains constitutional even without the tax penalty and that, if there was any doubt, the proper legal path was to strike down Congress’s removal of the penalty — not to rule against the law.

One of them, Neli Palma, argued that a preliminary injunction would cause “profound harm to the public interest” and millions of Americans. Such an injunction, she said “is meant to maintain a status quo. They are seeking to blow it up.”

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