Department of Justice declines to defend key ACA provision

Attorneys general from twenty states filed a lawsuit in February of this year to nullify the Affordable Care Act (ACA). Typically, it falls on the executive branch to defend federal legislation, but the current administration filed a memorandum agreeing with the plaintiffs that key provisions of the ACA should be nullified: guaranteed-issue (that everyone can buy health insurance, regardless of pre-existing conditions and that insurers cannot raise prices for those who have pre-existing conditions) and community rating.

The arguments rely on previous Supreme Court commentary for two other cases in which plaintiffs argued that the ACA was unconstitutional. In the first case, NFIB v. Sebelius, the Supreme Court ruled that the federal government did indeed have constitutional authority to impose the individual mandate (a penalty for people who did not have health insurance) because it was a tax. In the second case, King v. Burwell, the Supreme Court ruled that the individual mandate is central to ACA. The plaintiffs in this case, Texas v. USA, argue that since the 2017 tax changes removed the individual mandate (a tax) and the individual mandate is central to ACA, the entire ACA must now be found unconstitutional. The Department of Justice in its memorandum did not go so far as the plaintiffs, but rather only agreed that guaranteed-issue and community rating should now be found unconstitutional.

The individual mandate and guaranteed-issue were the two most interesting features of the ACA. Interestingly, AHIP (which represents health insurers in the US) released a statement indicating that it was against the nullification of both guaranteed-issue and community rating.