It's a notable stance that means it will be up to Obamacare fans such as Democratic governors to step in and defend the Affordable Care Act against on onslaught from GOP attorneys general, who say after Congress nixed the individual mandate at the heart of the law, the rest of it should follow.
The U.S. Justice Department says it will no longer defend major parts of the Affordable Care Act in court.
If that argument prevails in the courts, it would render unconstitutional Obamacare provisions that ban insurance companies from denying coverage to people with pre-existing conditions - arguably the most popular component of the 2010 health care law.
"The more uncertainty there is, the more the actuaries are going to be plugging into their projections for premium rates", says Sabrina Corlette, a research professor at Georgetown University's Health Policy Institute.
In the past, polls have found that both Republicans and Democrats favor protecting coverage for the tens of millions of Americans with pre-existing conditions. That ruling hinged on the reasoning that, while the government "does not have the power to order people to buy health insurance", as Chief Justice John Roberts wrote for the majority, it "does have the power to impose a tax on those without health insurance".
That was what five Justices of the Supreme Court said when a different combination of five Justices voted to uphold the mandate as a form of tax.
Late Thursday, the department said the health law's requirement that most Americans carry insurance will become unconstitutional next year and so will consumer protections forbidding insurers to deny coverage to sick customers or charge them more. The states argue that after Congress eliminated the penalty for the individual mandate, effective in 2019, as part of last year's tax reform bill, it destabilized other sections of the law. Without that form of tax, the new Administration document noted, the ACA mandate to buy insurance would be unconstitutional as beyond Congress's power to regulate interstate commercial activity.
Also, 39 percent of registered voters in today's NBC/WSJ said they are enthusiastic or comfortable with a candidate seeking to repeal Obamacare, compared to 49 percent who said they have reservations or were very uncomfortable with a candidate seeking to repeal the health care law.
Linda Muller, president and CEO of Cornerstone Healthcare, the mid-Hudson's largest low-income health provider, said it would be disastrous if "an entire class of individuals with pre-existing conditions are targeted" by a federal decision not to support them. "Congress has now kicked that flimsy support from beneath the law".
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So why then, as Gizmodo reports, is Trump's Department of Justice now arguing in court that the ACA's pre-existing condition provisions are unconstitutional?
This current lawsuit, led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel, argues that since Congress has changed the law to remove the penalty forcing individuals to get insurance, it has inadvertently rendered the rest of the law impermissible, under the 2012 Supreme Court ruling. Under another provision, the community rating provision, insurers were not allowed to set premiums based on a person's health history.
Meanwhile, California and several other states filed a motion to intervene to defend the law.
Bailey's spokesman Corey Uhden said Friday that he wouldn't comment on the constitutionality of the ACA provisions. "At the worst it could strip away guaranteed coverage for those with pre-existing conditions".
America's Health Insurance Plans said Friday that it plans to file a brief opposing the plaintiffs' request for emergency relief that would provides detail about the harm that would come to millions of Americans should their request to invalidate the ACA is granted either in whole or in part.
Just hours before the Justice Department officially withdrew from the case, three of the staff attorneys who had been working on it withdrew.
Despite the Justice Department position, the Health and Human Services Department has continued to apply the health law.
Reyes said that the Department of Justice's decision "strengthens our case, and we look forward to seeing if the district judge agrees". "Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019", AHIP said in a statement.
The states' challenge to the overall ACA has been pending since February in the Fort Worth court of U.S. District Judge Reed C. O'Connor.