Will the ACA be Dismantled in Court? Justice Department Declines to Support ACA Provisions

President Trump's administration continues in its mission to dismantle the Affordable Care Act (ACA). While attempts to repeal the ACA through legislation have not succeeded, the constitutionality of the ACA is again under assault. In an unusual move, Attorney General Jeff Sessions sent a letter to congressional leaders, telling them that the Justice Department will not defend the constitutionality of certain ACA provisions in the lawsuit filed in the Northern District Court in Texas by 20 State Attorney Generals. The letter stated in part that “The department in the past has declined to defend a statute in cases in which the president has concluded that the statute is unconstitutional and made manifest that it should not be defended, as is the case here.”

The court is not expected to make a decision until later this the year (and the case may eventually end up in the U.S. Supreme Court). As a reminder, the ACA was generally found to be constitutional by the Supreme Court in a 2012 opinion. The ACA, and specifically the requirement that Americans have health insurance, was constitutional because the penalty for not having coverage fell within Congress’s taxation powers.

Congress repealed the penalty for not having insurance last year in the Tax Cuts and Jobs Act of 2017. These Republican Attorneys Generals argue that the ACA and its mandate is unconstitutional now that Congress has repealed that tax-based penalty. The Justice Department brief agrees and asks the court to halt certain provisions of the ACA, such as banning insurers from denying coverage to people with pre-existing conditions. According to the Justice Department brief, the U.S. is agreeing with the plaintiff States' Attorney Generals that these ACA sections “must now be struck down as unconstitutional.”

Since the U.S. will not defend the ACA,  sixteen States and the District of Columbia have been granted leave to intervene in the case to defend the ACA.

This case is certain to cause concern among insurers who are now setting rates for 2019. While they need to abide by the ACA consumer-protection requirements in setting their rates for 2019, the court case may allow insurers to go back to pricing plans based on health conditions.  About 21 million Americans purchase insurance through the ACA marketplaces or other individual policies, and according to the Kaiser Foundation, an estimated 27% of Americans have medical conditions that may be considered pre-existing for purposes of these policies. Therefore, this case has major implications for both the justice system and the average American.

Related Capabilities

Media Contact

Public Relations Contact
Kate Lenders
Senior Marketing Manager
klenders@sgrlaw.com
312-360-6478