US Justice Department Won't Defend the ACA

A couple of months ago a federal judge in Texas (Judge Reed O’Connor) dealt a blow to the ACA when he ruled in Texas v. Azar that it's unconstitutional in its entirety- including the implementation of market reforms (e.g. protections for folks with pre-existing conditions), the health insurance marketplaces, and the expansion of Medicaid. He didn’t issue an injunction ordering the suspension of the law - so the ACA will remain the law of the land for now.

Last week the DOJ made it crystal clear that they have no intention of defending any of the provisions of the ACA (including covering pre-existing conditions) because they agree with the plaintiff States. That clear message came in a short statement by the Attorney General when he notified the court that they fully side with Judge O’Connor’s decision in Texas v. Azar & won't defend the ACA.

The December 2018 ruling isn’t the last word. The case has been appealed to the federal appellate court system.  It will probably end up with the US Supreme Court…  which has a different cast of characters than it did when the ACA was originally upheld back in 2012 by a 5-4 vote.

Since then, Gorsuch replaced Scalia and Kavanaugh replaced Kennedy.  Both Scalia and Kennedy voted against the ACA- so not much on that score has changed.

Chief Justice Roberts voted with the majority that upheld the law.  His argument rested on the ACA’s link to the financial penalties for not having health insurance. But remember, the financial penalties for not having health insurance were removed from the IRS tax codes in last year's federal tax overhaul, pulling out the structure that Roberts used in his argument.

In the 2012 Ruling, Justice Roberts wrote that: “… the Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a taxbecause the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” 

Roberts rejected the Administration's argument that the federal government's authority to regulate interstate commerce provides the authority needed for the ACA to be constitutional (the Court struck down that argument 5-4).

The bottom line is that the ACA, including its protections for folks with pre-existing conditions, may very well be in jeopardy if Roberts views the ACA as fundamentally different now that the financial penalties are gone.