THE ACA LAWSUIT AND ITS IMPLICATIONS

Ivan Hoffman, B.A., J.D.

     As of this writing, there is a case (Texas vs. United States et. al) under submission in the United States District Court which has wide-ranging implications for everyone and including those who count themselves among President Trump’s “base.”  If successful, the case would eliminate health insurance coverage for tens of millions of Americans, including that base.  The Republican Party including the President have winkingly (meaning, accompanied by asterisks) proclaimed themselves to be in favor of retaining health insurance coverage for pre-existing conditions but have wickedly failed to say that they do not support the current law which restricts insurance companies from raising premiums for this coverage. (see more below).  Moreover, they have continually supported this case including that the Health and Human Services Department (“HHS”), a named defendant, and the Justice Department, the attorneys for HHS, have sided with the plaintiffs and have refused to defend the federal law, which is the HHS’ and the Justice Department’s obligation.   

     Further, on October 22, 2018, the Trump administration rolled out new HHS regulations that would allow insurance companies to offer lower coverage insurance, so called “junk insurance,” which would not include coverage for pre-existing conditions.  Under the Affordable Care Act (“ACA”), such insurance is not allowed to be issued since all insurance has to meet at least the standards set out in the ACA. 

     This is part of the well-announced planned attack on social programs. Of course, the government does not call it an attack on the ACA.  The rubric is that they are enhancing “states rights” to tailor insurance to meet their local needs.   But the effect is the same.  First, the Republican legislature and the President push through the tax act which has created huge deficits and then they say that, because there are huge deficits, we need to cut social programs (but not social programs such as military spending which helps the wealthy).   Lifting oneself by one’s own bootstraps.  (Read “The Enabling Act.”) 

The Details of the Claims 

     This is a case filed by 18 Republican Attorneys General and 2 Republican governors and other plaintiffs claiming that the ACA is unconstitutional.  The back story on this: in 2012 the Supreme Court held (National Federation of Independent Businesses (NFIB) v. Sebelius) that the individual mandate was constitutional ruling that, although Congress could not force people to buy health insurance, Congress could, under its’ “tax and spend” authority provisions, impose a “penalty” for those who did not.  So the Constitutional authority for the ACA is founded on Congress’ ability to tax.  The simply-stated basis for the claim is that when the new tax act was enacted effective January 1, 2018 and these provisions are set to become effective January 1, 2019, it reduced the penalty for failure to sign up for the ACA (the individual mandate) to $0, and that because there was no longer any such “tax” that therefore there was no basis for Congressional authority to enact the legislation. And, the argument goes on, because the individual mandate is essential to the ACA, the entirety of the ACA should be declared unconstitutional since there is no way to separate (“sever”) the provisions regarding the individual mandate from the rest of the ACA. 

     The argument further is that even if the entirety of the ACA is not stricken, the provisions requiring that insurers cover pre-existing conditions without additional premiums should be stricken. 

The Legal Implications 

     The ACA involves not only the immediate issues about coverage for persons not on Medicare or Medicaid, but because the ACA implicates many aspects of those programs, declaring it to be unconstitutional could adversely affect those programs. 

     If the ACA is declared unconstitutional, it could allow insurers to deny coverage for pre-existing conditions or charge excessively high premiums for the same.  This could apply to both individual plans as well as employer-based plans.  It is estimated that at least 20 million people would lose insurance coverage and this figure does not include approximately 3 million people under 26 currently covered under their parents’ ACA plan. 

The Possible Outcomes 

     The District Court could: uphold the ACA in its entirety, strike down the ACA in its entirety, prevent the enforcement of the pre-existing conditions protections in merely the 20 states which have sued or extend this order to the entire country.      

    It is legally unclear what effect the October 22, 2018 order discussed above will have if the Court upholds the ACA in its entirety. 

Copyright © 2018 Ivan Hoffman.  All Rights Reserved. 

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Ivan Hoffman has been practicing intellectual property law for over 45 years and has written extensively about that topic. (www.ivanhoffman.com).  Additionally, Ivan Hoffman has written numerous books about philosophy including “The Tao of Love” and “The Tao of Money.” 

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This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  You should not rely on this article in any manner whatsoever and you should not draw any conclusions of any sort from this article.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States laws but the laws of other countries may be different.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

      


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