Trump Administration Move Imperils Pre-Existing Condition Protections

Grant Boone
June 11, 2018

The Trump administration's decision not to defend the Affordable Care Act in federal court in Texas on Thursday provides the latest challenge for NY insurers and regulators.

A Trump administration decision not to defend key parts of the Affordable Care Act in a lawsuit seeking to dismantle it could cause chaos and deprive Americans of coverage, local politicians, providers and insurers said on Friday.

The provisions banning insurers from denying coverage or charging more based on medical condition or history can't be severed from the unconstitutional individual mandate, the brief says. In the case of health care, "fortunately we have 16 other [Democratic attorneys general] who are prepared to do it with us". "I think what they're doing is wrong, I think their attempts to overturn the Affordable Care Act have been wrong, but look, they're the majority, they set the schedule".

Senate Democrats have vowed to make health care policy a priority this summer, as they gear up for midterm elections this November.

U.S. Rep. John Faso, R-Kinderhook, said those with pre-existing conditions should not be denied coverage, but the ACA has "failed to deliver on its promise to reduce costs". The court said that while this "individual mandate" exceeded Congress' power to regulate commerce, it could be upheld as an exercise of Congress' taxing power. It also agrees that the ACA's provisions affecting Medicaid, Medicare Advantage, and Medicare Part D should remain law.

Several other provisions of the law, however, are severable and can still be enforced, the Justice Department said.

Before the Affordable Care Act became law, insurance companies routinely declined health insurance coverage to people who had ongoing medical conditions or recent illnesses.

Weighing in on a Texas challenge to the health law, the Justice Department argued that legally and practically the popular consumer protections can not be separated from the unpopular insurance mandate, which Congress has repealed, effective next year. Yet he has granted standing to a group of 17 Democratic-led states that filed a brief on Thursday night arguing for the preservation of Obamacare, and will no doubt give them a fair hearing.

Regardless of the federal court's ruling-which observers said may come by late summer or early fall-New York state law now protects consumers from such actions by insurers.

"Weighing those considerations here, I have concluded that this is a rare case where the proper course is to forgo defense of Section 5000 (a)", Sessions said of the ACA's requirement for individuals to have essential health coverage.

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The administration's decision also is likely to further roil insurance markets that are seeing very large premium increases, fed in part by other moves by the Trump administration to loosen insurance regulations.

Sen. Susan Collins, R-Maine, who voted against the Republican repeal bills in the Senate past year, also expressed concern about the administration's new push, saying it "creates further uncertainty that could ultimately result in higher costs for millions of Americans and undermine essential protections for people with pre-existing conditions, such as asthma, cancer, heart disease, arthritis and diabetes".

The case in Texas, which has attracted relatively little notice until now, emerges from the massive tax bill Congress passed late past year.

This is a huge deal... the administration's behavior sets a unsafe precedent about the obligation of this and future presidents to follow their constitutional duty to faithfully execute the laws enacted by Congress....

Epilepsy, cancer, diabetes, lupus, sleep apnea, and pregnancy are all examples of pre-existing conditions.

About 1.5 million Californians buy coverage through the state's ACA exchange, Covered California, and almost 4 million have joined Medicaid as a result of the program's expansion under the law.

"For three such respected DOJ attorneys to do so simultaneously - just hours before a major filing, and without replacement by any other career lawyers other than a rookie - is simply flabbergasting". "It's being mugged", King said in a twitter statement on Friday.

But Marty Lederman, who worked in the Obama Justice Department and now teaches at Georgetown Law School, says the move was unprecedented.

But Justice Department lawyers do argue that with no penalty for not having coverage, the federal government can not make health insurers cover sick consumers or prohibit insurers from charging sick consumers higher premiums, as was routinely done before the health care law was implemented. Whatever the lower courts decide, the case seems destined to reach the Supreme Court. "Our coalition of states and partners across the country will fight any effort to strip families of their health insurance", he said. The lawsuit will be heard by U.S. District Judge Reed O'Connor of the Northern District of Texas.

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