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At Obamacare Hearing, Federal Appeals Court Appears Skeptical of Law

A panel of federal judges in New Orleans sharply questioned attorneys defending the Affordable Care Act on Tuesday, increasing the chances that the 5th U.S. Circuit Court of Appeals may throw out at least part of the 2010 law, often called Obamacare.

Robert Henneke, general counsel and director for the Center for the American Future, speaks to reporters outside the 5th Circuit Court of Appeals after arguments in the Obamacare case on Tuesday.
(AP/Gerald Herbert)
By Noam N. Levey

A panel of federal judges in New Orleans sharply questioned attorneys defending the Affordable Care Act on Tuesday, increasing the chances that the 5th U.S. Circuit Court of Appeals may throw out at least part of the 2010 law, often called Obamacare.

Two of the three judges on the appeals court panel _ both appointed by Republican presidents _ repeatedly pressed California's deputy solicitor general, who is defending the law, to explain why it should remain on the books after Congress in 2017 scrapped a penalty against people who didn't have health insurance. That provision was once deemed essential to the program.

The judges seemed disinclined to decide what parts should be saved or struck down, as California and other defenders of the law have urged.

"Congress can fix this," said Judge Kurt Engelhardt, an appointee of President Donald Trump. Engelhardt suggested that if the health care law needs to be revised, lawmakers on Capitol Hill should do it, not the courts.

Engelhardt and Judge Jennifer Walker Elrod, who was appointed by President George W. Bush, could form a majority on the three-judge panel considering the fate of the sweeping challenge to the health care law brought by Texas and 17 other mostly Republican states. The third judge on the panel, Carolyn Dineen King, was appointed by President Jimmy Carter. She did not speak at the hearing Tuesday.

The states are suing to scrap the entire health care law, including its protections for people with preexisting conditions. Also at risk are billions of dollars in federal assistance that have helped millions of Americans get health insurance through Medicaid and state insurance markets.

If successful, the Texas lawsuit would strip coverage from as many as 20 million people and eliminate scores of other health care protections, including prescription drug assistance for seniors who rely on the Medicare Part D program.

Predicting how a court will rule based on a hearing is difficult, and no matter the result at the 5th Circuit, the losing party is almost certain to appeal to the Supreme Court.

A victory for plaintiffs assures that health care will once again be front and center on the campaign trail as Trump seeks reelection next year.

The hearing at the 5th U.S. Circuit Court of Appeals _ which pits blue states defending the law against red states and the Trump administration seeking its repeal _ has also raised the possibility that the health care law might survive only in parts of the country.

Such an outcome would eliminate insurance protections for tens of millions of people and mark one of the most dramatic turns in the nearly decadelong legal fight over the law.

It would also widen the divide in the U.S. between states that have embraced the law and its extensive series of insurance protections and those that have been fighting it since President Barack Obama signed the legislation in 2010.

Working to save the law are 20 states, led mostly by Democrats, including California, which has used the law to engineer a dramatic expansion of insurance coverage.

Texas and the other Republican-led states that have sued to invalidate the law argue that when Congress in 2017 scrapped a penalty against people who didn't have health insurance, lawmakers removed a pillar of the law that was critical to getting young, healthy people to sign up for coverage and keeping premiums affordable.

The Trump administration, which in 2018 made the unusual decision not to defend the law, now fully backs Texas' lawsuit and is urging a full repeal.

In December, a federal judge in Texas backed the plaintiffs' argument, issuing a highly controversial ruling that the entire law is unconstitutional.

California and the 19 other states, as well as the District of Columbia, which won permission to defend the law when the Trump administration declined to do so, appealed to the federal court in New Orleans to reverse the Texas ruling.

On Tuesday, attorneys for California and the House of Representatives, which also has joined the suit to defend the law, urged the appellate court to preserve the law, in part because there is no evidence that Congress intended to repeal the whole law when it eliminated the mandate penalty in 2017.

Indeed, there is little evidence that eliminating the penalty has jeopardized the health care law's broader program for expanding health coverage. Most insurance markets continue to function, and millions of poor Americans are still getting coverage through an expansion of Medicaid, also made possible by the law.

Even senior Trump administration officials, including White House economists and Justice Department lawyers, have noted in recent months the success of insurance markets and dismissed the impact of eliminating the penalty.

"Another year of stable enrollment," Seema Verma, who oversees the marketplaces as administrator of the Centers for Medicare and Medicaid Services, said in March after the agency released a report showing 11.4 million people signed up for coverage on the marketplaces for 2019, just shy of the total the year before.

Administration lawyers are nonetheless pushing the appeals court in New Orleans to scrap the law.

In a complicating twist, Justice Department attorneys also argued in papers filed with the court last week that the appeals court could invalidate the health care law only in the 18 red states that are suing.

That could mean that insurance protections _ including the ban on insurance companies denying coverage to people with preexisting medical conditions _ could disappear in Texas, but remain in California.

Other provisions could be more difficult to roll back in some places, experts say. For example, the law established a new federal office to support experiments by physicians and hospitals to improve quality and lower health care costs. It is unclear if the federal Department of Health and Human Services would be forced to withdraw support for experiments in states where the law was repealed.

Officials at the U.S. Department of Justice have declined to discuss the litigation.

California Attorney General Xavier Becerra said the state and its allies aim to save the law nationwide.

"Together, the Trump administration and the Texas-led coalition risk the health of nearly every American, from the young to the elderly, the sick to the gainfully employed," Becerra said.

(c)2019 Los Angeles Times

Caroline Cournoyer is GOVERNING's senior web editor.
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