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Federal appeals court questions legality of Obamacare insurance mandate

Case has high stakes for health care law’s future

Senate and House Democrats hold a Tuesday news conference on the Senate steps on health care coverage of preexisting conditions. (Caroline Brehman/CQ Roll Call)
Senate and House Democrats hold a Tuesday news conference on the Senate steps on health care coverage of preexisting conditions. (Caroline Brehman/CQ Roll Call)

A three-judge panel on the 5th U.S. Circuit Court of Appeals suggested during a Tuesday hearing it might uphold at least part of a lower court ruling to strike down the 2010 health care law.

Two judges, both appointed by Republican presidents, questioned the constitutionality of the law’s requirement that most Americans get health care coverage. A third, appointed by Democratic President Jimmy Carter, stayed silent throughout the nearly two-hour oral argument hearing in New Orleans, which follows a December decision by federal Judge Reed O’Connor of the Northern District of Texas calling for the law to be struck down.

The case will likely be appealed to the Supreme Court, which would raise the stakes for both the law’s future and its use as a political tool ahead of the 2020 election.

The Supreme Court has twice upheld the health care law, but overturning it would have significant ramifications for the nation’s health care system. Some 20 million people gained health insurance coverage through the law, which also banned insurance companies from denying coverage or charging more to people with preexisting conditions. Without the law, seniors would face a gap, known as the “doughnut hole,” in their Medicare drug coverage, among other effects.

Last year, Texas and a coalition of Republican-led states sued, saying the law became unconstitutional when Congress reduced to zero the law’s penalty for forgoing coverage.

The Trump administration supported O’Connor’s ruling, while a separate coalition of states led by California’s Democratic attorney general, Xavier Becerra, and the House general counsel defended the law.

Judge Kurt Engelhardt suggested Tuesday that court precedent strongly connected the requirement to get insurance, known as the “individual mandate,” to protected coverage of preexisting conditions.

“It seems like the language used is pretty heavy when it comes to those provisions being interlocking or intertwining,” he said.

Still, Engelhardt suggested Congress could take steps to protect less controversial parts of the health care law. He indicated the panel may hesitate to eradicate the entire law.

“There’s a political solution here that you, various parties, are asking this court to roll up its sleeves and get involved in,” he told House General Counsel Douglas Letter. “Why does Congress want the Article III Judiciary to become the taxidermist for every legislative big game accomplishment that Congress achieves? Congress can fix this.”

Judge Jennifer Elrod, appointed by President George W. Bush, asked if lawmakers intended to knock down the law when they ended the penalty for not having coverage as part of the 2017 tax overhaul.

“How do we know that some members of Congress didn’t say, ‘Aha! This is the silver bullet that’s going to undo the ACA?’” she asked.

Samuel Siegel, California’s deputy solicitor general, argued that Congress intentionally eliminated only the penalty for not having coverage and that Congress specifically meant for the rest of the law to stay on the books.

“All the court has to do is look at the text of the [tax law], see that Congress zeroed out the only thing enforceable,” he said. “That is the beginning and the end of the severability argument.”

Justice Department attorney August Flentje, facing questions about the administration’s approach, said the government would enforce it until a final decision comes.

Elrod asked about the possibility of striking down the law only in states where officials joined the lawsuit.

“That raises complicated issues, and we are appreciative of the existence of the stay until there’s a final ruling,” Flentje said.

Also watch: What if we switch to a single-payer health care system?

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Robert Henneke, the Texas Public Policy Foundation general counsel and the lead counsel for the individual plaintiffs, told reporters after the hearing it was a “good day.”

“Today’s arguments seem to have gone very, very well,” he said.

Democrats criticized administration officials, using arguments that may be made on the campaign trail.

“If they have their way, millions of Americans could be forced to delay, skip or [forgo] potentially life-saving health care,” Becerra said. “Our state coalition made it clear: On top of risking lives, gutting the law would sow chaos in our entire health care system.”

Congressional Republicans have sought to distance themselves from the lawsuit.

Texas Sen. John Cornyn accused Democrats of “perpetuating this lie that we’re not for covering preexisting conditions” and said Republicans should counter those assertions.

Senate Majority Leader Mitch McConnell said he expects the challenge to reach the Supreme Court.

“There’s nobody in the Senate not in favor of covering preexisting conditions, nobody,” the Kentucky Republican said. “And if that were, under any of these scenarios, to go away, we would act quickly on a bipartisan basis to restore it.”

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