It's a notable stance that means it will be up to Obamacare fans such as Democratic governors to step in and defend the Affordable Care Act against on onslaught from GOP attorneys general, who say after Congress nixed the individual mandate at the heart of the law, the rest of it should follow.
If a federal judge in Texas agrees with the Department of Justice's (DOJ) move to not defend the constitutionality of the Affordable Care Act (ACA), millions of Americans could lose their healthcare coverage or face higher premiums for having preexisting conditions, a legal professor wrote Friday in a blog post for The Commonwealth Fund.
Besides urging nullification of the insurance-buying mandate itself, the new government position argued that two of the most popular features of the ACA must fall along with it: the requirement that insurance companies can not deny health insurance to individuals because of existing or pre-existing medical conditions, and the requirement that they can not charge higher insurance premiums based on existing or pre-existing conditions.
If the judge agrees, "insurers would want to discontinue" health plans that treat healthy and sick customers the same, predicted Larry Levitt, a senior vice president at the Kaiser Family Foundation.
Senate Democrats have vowed to make health care policy a priority this summer, as they gear up for midterm elections this November.
Andy Kim, a former Obama administration staffer, is making coverage of pre-existing conditions and access to affordable health care a key part of his campaign against Rep. Tom MacArthur in Central New Jersey, the author of the Obamacare repeal bill that passed the House but failed in the Senate previous year.
Chief Justice Roberts, who wrote the majority opinion in NFIB v. Sebelius, rejected the Obama administration's claim that Congress could impose the individual mandate pursuant to the Constitution's Commerce Clause. But the uncertainty it creates in the meantime could rattle the law's insurance marketplaces just as insurers are starting to file rate requests for next year.
The ACA now requires insurance companies to offer coverage to everyone regardless of their medical history. The states argue that after Congress eliminated the penalty for the individual mandate, effective in 2019, as part of last year's tax reform bill, it destabilized other sections of the law. The DOJ in fact sided in large part with the states, arguing that the law's protections for people with pre-existing conditions should be invalidated.
HHS and Treasury administer the health law's coverage and subsidies.
Republicans have tried to blunt this tactic with a revival of what launched them into power in 2010: By arguing Democrats are hellbent on taking over all aspects of the health care system.
Attempts to repeal it in Congress have failed, but opponents of the law have also filed scores of lawsuits challenging various provisions. The individual mandate required most Americans to maintain minimum insurance or to pay a tax penalty.
The 20 states that brought the lawsuit include Texas, Wisconsin, Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Missouri, Nebraska, North Dakota, South Dakota, South Carolina, Tennessee, Utah, Virginia, and Gov. Paul LePage for the State of ME and Gov. Phil Bryant for Mississippi. Chris Murphy, D-Conn., said in a statement.
"Just read the brief of the states that intervened to defend the law".
Regardless of the federal court's ruling-which observers said may come by late summer or early fall-New York state law now protects consumers from such actions by insurers.
The issues in the court case are unlikely to be resolved quickly, but some experts said the added uncertainty could prompt insurers to seek higher premiums in 2019 for health plans sold to individuals.
Despite the Justice Department position, the Health and Human Services Department has continued to apply the health law.
"Withdrawing from a case en masse like this, right before the brief is filed, is unheard of", noted Nicholas Bagley, a former Justice Department lawyer who now teaches at the University of Michigan Law School. In 2012, the Supreme Court held that the insurance mandate was unconstitutional as a nationwide mandate.
"It's highly unlikely NY would take away consumer protections it has put in place", said a spokeswoman for the state Health Plan Association.
The Texas case will be decided first by O'Connor, a conservative appointee of President George W. Bush. In their suit, lodged in February in the U.S. District Court for the Northern District of Texas, they argue that the entire law is now invalid.