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Utah A.G.: Feds not defending ACA provisions 'strengthens our case' to nix whole law

FILE - Utah Attorney General Sean Reyes speaks during a news conference Thursday, May 31, 2018, in Salt Lake City.
FILE - Utah Attorney General Sean Reyes speaks during a news conference Thursday, May 31, 2018, in Salt Lake City.
Rick Bowmer, Associated Press

SALT LAKE CITY — Utah Attorney General Sean Reyes says a decision by the Department of Justice not to defend pivotal parts of the Affordable Care Act in court will strengthen the state's recently submitted lawsuit, filed with 19 other states, that argues the entire law should be struck down as unconstitutional.

The Department of Justice has said it will not legally defend the ACA's restriction on insurers asking about pre-existing health conditions as a determinant for whether to offer coverage and at what rates, saying it believes the provision is unconstitutional.

FILE - In this April 25, 2018, file photo, Attorney General Jeff Sessions speaks on Capitol Hill in Washington. The Trump administration said in a court filing late Thursday that it will no longer defend key parts of the Affordable Care Act, including the
FILE - In this April 25, 2018, file photo, Attorney General Jeff Sessions speaks on Capitol Hill in Washington. The Trump administration said in a court filing late Thursday that it will no longer defend key parts of the Affordable Care Act, including the requirement that people have health insurance and provisions that guarantee access to health insurance regardless of any medical conditions.
Andrew Harnik, Associated Press

One Utah health advocacy group warned Friday that the move could have negative financial consequences for hundreds of thousands of Utahns with pre-existing health conditions. But Reyes contended the decision is a sign that the federal government is sensibly coming to terms with the constitutionality problems in the Affordable Care Act.

"The DOJ has now acknowledged the problems with the statute. Its position is a concession that our arguments are correct," Reyes told the Deseret News in a statement.

The decision, announced in a filing late Thursday in a federal court in Texas, is a rare departure from the Justice Department’s practice of defending federal laws in court. Texas and other Republican-led states, including Utah, sued in February to strike down the entire law because Congress recently repealed a provision that people without health insurance must pay a fine. The repeal takes effect next year

Texas says that without the fine in place the requirement to have health insurance is unconstitutional and that the entire law should be struck down as a result, the Associated Press reported.

The Department of Justice said it agrees with Texas that the so-called individual mandate will be unconstitutional without the fine. It also said that provisions shielding people with medical conditions from being denied coverage or charged higher premiums and limiting how much insurers can charge older Americans should fall as well.

But it said the rest of the law, including Medicaid expansion, can remain in place.

Reyes said that the Department of Justice's decision "strengthens our case, and we look forward to seeing if the district judge agrees."

In 2012, the U.S. Supreme Court ruled that the individual mandate — requiring Americans to purchase insurance and exacting a yearly financial penalty from those who don't — was not a constitutional use of the Commerce Clause, but that it was a lawful use of Congress' authority to require taxes.

The lawsuit argues that with the mandate to purchase insurance still technically in place, but the financial penalty for those who don't abide by it being removed beginning in 2020, Congress' taxing power no longer applies to the provision, leaving it unconstitutional.

"When Congress reformed the tax system in December 2017, it removed the tax penalty for failing to comply with the mandate," Reyes said. "That change eliminated the basis for the court’s decision to uphold the ACA’s constitutionality."

The lawsuit argues the individual mandate was a central component of the Affordable Care Act, inseparable from its other provisions, and that as a result its unconstitutionality requires the entire law to be struck down.

Reyes said Friday that "the individual mandate cannot be severed" from the parts of the Affordable Care Act that prohibit insurers from increasing a person's premium rates or denying them coverage based on their health history.

"Because the mandate is unconstitutional, those ... elements must fail as well," he said.

FILE - Stacy Stanford attends a rally to Support Healthy Utah at the State Capitol Building in Salt Lake City on Thursday, March 5, 2015.
FILE - Stacy Stanford attends a rally to Support Healthy Utah at the State Capitol Building in Salt Lake City on Thursday, March 5, 2015.
Kristin Murphy, Deseret News

Stacy Stanford, policy analyst for the Utah Health Policy Project, a think tank and advocacy organization that is also a federal health exchange enrollment hub, said "the Affordable Care Act is the law of the land and therefore the administration should be defending it."

"However, it's not surprising they've chosen not to, because of (their) consistent efforts ... to undermine the ACA," Stanford told the Deseret News.

Stanford said removing the restrictions on pre-existing conditions would take Americans back when "insurance companies could pore through your medical records and anything you mentioned to your doctor was fair game."

She cited a report from health care think tank Kaiser Family Foundation that estimates more than 52 million Americans have pre-existing health problems that would "likely leave them uninsurable" if it weren't for the Affordable Care Act's regulations.

The same report estimates 391,000 Utahns have pre-existing conditions that could affect their coverage eligibility.

"We agreed as a nation to not go back there," Stanford said, after the Affordable Care Act passed. "The pre-existing condition protections are extremely popular on both sides of the aisle."

California and 15 other states have intervened in the lawsuit, and Stanford said she has some optimism they will be able to successfully argue for pre-existing condition protections, even as the Department of Justice relinquishes that effort.

"There's some hope that they will prevail," Stanford said.

Mark Showalter, chairman of the Department of Economics at BYU, contended that although protections for people with pre-existing conditions is a well-liked part of the law and the individual mandate penalty was considered deeply unpopular, the provisions are two sides of the same coin.

"If those go together, they make sense," Showalter said. "But to have one without the other doesn't make any sense."

If insurers can't ask about pre-existing conditions, but there's no financial penalty incentivizing the purchase of insurance, he said, "you just have these increases in prices over time and the (insurance) pools just get sicker" because only people sick enough to know they will need the coverage will purchase it.

Because the two policies are meant to be paired, Showalter said, the Department of Justice declining to defend pre-existing condition protections can be seen as "perfectly consistent" with Congress' decision to repeal the mandate penalty.

Contributing: Associated Press