President Donald Trump’s legal team has made a move that could kill a key part of the Affordable Care Act, disrupt the individual major medical market in 2019, and leave most of the ACA intact.
U.S. Department of Justice lawyers launched that attack on part of the ACA Wednesday, by asking a federal court in Texas to let the governments of Texas and other states that oppose the ACA win part of a suit they have filed — but only part of their suit.
Texas and its allies have asked the court, in Texas et al. v. USA et al. (Case Number: 4:18-cv-00167-O) to grant a preliminary injunction that would nullify the ACA individual mandate.
Texas and its allies want the court to then use the nullification of the individual mandate to kill the ACA as a whole, based on the proposition that killing any part of the ACA will kill all of the ACA.
The Justice Department lawyers representing Trump’s U.S. Department of Health and Human Services and Trump’s Internal Revenue Services have asked the court to narrow the scope of the suit, and then to grant a ruling in favor of Texas and its allies on the narrower version of the suit.
The Justice Department wants the Texas court to hold that the ACA individual mandate is essential to the ACA “community rating” system, or medical underwriting restrictions. Those are the ACA rules that keep health plans from considering personal health factors other than age and tobacco use when deciding whether to sell people coverage, or what premiums to charge.
If the court takes that action, “the ACA’s provisions containing the individual mandate as well as the guaranteed-issue and community-rating requirements will all be invalid beginning on Jan. 1, 2019,” the department lawyers write in a memorandum addressed to the court.
In that scenario, other ACA provisions would stay in place.
The ACA Individual Mandate
The ACA is a package made up of two separate laws: the Patient Protection and Affordable Care Act of 2010 (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).
Parts of the package created the ACA public exchange system and set underwriting and benefits rules for health coverage. Other parts established rules for major medical plan benefits summaries, provided funding for geriatric care provider education programs, and moved to lower out-of-pocket costs for people who have Medicare Part D prescription drug plan coverage and high prescription bills.
The ACA individual major medical insurance mandate provision originally required people who failed to get covered to pay a penalty.
ACA opponents argued even before the legislation creating the ACA was drafted that a mandate would be the equivalent of Congress requiring people who hate broccoli to buy broccoli.
In 2012, the U.S. Supreme Court ruled that opponents of the ACA individual coverage mandate could not win a preliminary injunction blocking the mandate, because the ACA individual mandate was a tax, and a federal law prohibits parties from seeking preliminary injunctions to block new federal taxes.
How the Tax Cuts and Jobs Act May Have Changed Things
In December, Trump signed the Tax Cuts and Jobs Act.
The TCJA sets the ACA individual mandate penalty for 2019 and later years at zero.