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Short Analysis
December 2018

Five Things You Need to Know about Texas v. US Litigation

On December 14, Judge Reed O’Connor, Texas Federal District Court, issued an initial ruling in the case Texas v. United States. This case threatens access to health care and financial security for millions of Americans. The dangerous ruling would strike down the entire Affordable Care Act (ACA), including the provisions that protect people with pre-existing conditions and those who get coverage from their employers, improve the long-term financial stability of Medicare, expand Medicaid, make improvements in hospital and nursing home care, and more. The Judge has stayed his ruling for now, meaning that it will not go into effect (and the Affordable Care Act will continue) while the case is being appealed. The California Attorney General and the defending states will almost certainly challenge the ruling. Meanwhile, it is important that consumers and their advocates know five things:

1) The ACA Is Still the Law of the Land 

The ACA continues while this case winds its way through the courts. Therefore, consumers can continue to pay premiums and get marketplace coverage; and people can continue to apply for and receive Medicaid benefits.

2) If Not Stopped, the Lawsuit Would Harm Millions of People  

The ACA is vital to patients’ access to health care. Devastating problems would reverberate throughout the health care system and the nation’s economy if the court strikes down the law. These are just some of the enormous harms and that would result from striking the law:  

  • Insurers could deny coverage or charge unaffordable premiums to older people and to people with preexisting conditions, or cancel coverage or refuse to cover care for preexisting conditions once people are enrolled. People in employer-based plans, not just individual plans, could face preexisting condition exclusions; 
  • At least 20 million consumers could lose health insurance– 12 million people who get coverage through Medicaid and 8 million who get federal subsidies in the health insurance marketplace; 
  • Young people would no longer be guaranteed the right to stay on their parents’ plans until they turn 26, endangering coverage for an additional 3 million people; 
  • People would no longer be guaranteed access to essential health benefits in health plans including prescription drug coverage, maternity care, mental health and substance use benefits, and other critical services; 
  • Health plans would once again be able to implement lifetime and annual limits on how much care they will cover for individuals and families; 
  • States would lose trillions of dollars in federal funds;  
  • The public health system would lose funds to combat the opioid epidemic and other health problems; 

3) The Republican Party—in the White House, Congress and the States--is Driving this Case 

Texas Attorney General is leading a group of 18 Republican state attorneys general (TX, WI, AL, AR, AZ, FL, GA, IN, KS, LA, MO, NE, ND, SC, SD, TN, UT, WV), two governors (ME and MS), and two individual plaintiffs in challenging the Affordable Care Act. These state and individual plaintiffs are urging the court to overturn the entire health care law now that the individual mandate is no longer being enforced, basing their claim on the Republican Congress’s efforts to weaken the ACA in the tax cut passed in early 2018. What’s more, the Trump administration Justice Department—in an unprecedented decision—is not fulfilling its statutory responsibility to defend federal laws when they are challenged, instead arguing that protections for people with preexisting conditions should be struck down. When the Department of Health and Human Services (the federal agency named in the suit and charged with enforcing the law), and its DOJ lawyers decided to partially side with the plaintiff states instead of defending the federal law, the senior career attorney for the case resigned in protest and all other career attorneys withdrew their names from the filing. 

On the other side, California Attorney General Becerra is leading a group of 17 Democratic attorneys general who have intervened to defend the law (CA, CT, DC, DE, HI, IL, KY, MA, MN, NJ, NY, NC, OR, RI, VT, VA, WA). Families USA, along with Community Catalyst, the National Health Law Program, the Center on Budget and Policy Priorities, and the Texas-based Center for Public Policy Priorities, has filed an amicus brief in the case. Numerous patient organizations, health care providers, scholars, and individual consumers themselves have also weighed in with declarations and amici to explain the importance of retaining health insurance protections for older people and people with preexisting conditions, as well as other parts of the health care law that are at risk including premium tax credits, Medicaid expansion, and the many other health care improvements made by the Affordable Care Act. 
Texas is arguing that when Congress passed the Tax Cuts and Jobs Act of 2017 and set the penalty for going without coverage at $0 in 2019, Congress rendered the mandate unconstitutional. Without the mandate, Texas argues that Congress intended that rest of the law depend on the mandate and therefore that the mandate cannot stand (that is, the rest of the law is “inseverable,” says Texas). Of course, Congress itself passed the tax cut and also preserved—in notably public fashion—the rest of the ACA. Nevertheless, Judge O’Connor agreed with this argument in his December ruling. Virtually all legal scholars—including prominent opponents of the Affordable Care Act—agree that Texas’s argument is wrong: even if the court found the individual mandate to be unconstitutional, the court would have to determine what Congress in 2017 wished for the rest of the law. In this instance, it is clear what Congress wanted because Congress explicitly kept the rest of the Affordable Care Act intact when it zeroed out the penalty. In multiple high profile votes during this Congress, Congress decided not to repeal the law. 

4) Republican Leadership Should Act Immediately to Support the ACA

Despite the judge being completely wrong in his partisan decision, the Trump administration and Republican leadership created this problem, and should act immediately to override the judge.

5) O’Connor’s Ruling is Concerning, but it is not a Short-term Threat to the ACA and is Likely to be Overturned

So far, the district court has decided that the entire Affordable Care Act is invalid. However, Judge O’Connor has not enjoined it, which means that the law remains in effect while the case is being litigated, and California Attorney General has indicated that he will challenge the decision, after some further procedural issues are resolved in this court. A future court could decide any of the following: 

  • The ACA stands as written and its many consumer protections must be enforced in all states; 
  • The court could stop enforcement of preexisting condition protections in the 20 plaintiff states, leaving consumers in these 20 states unprotected and making it hard or impossible to fairly administer premium tax credits nationally; or 
  • The court could stop enforcement of preexisting condition protections nationally, leaving consumers with preexisting conditions uninsured or with unaffordable premiums or without coverage for those conditions; 
  • The court could stop enforcement of the entire law nationally, which would throw millions of people off of Medicaid and private insurance and leave them uninsured, as well as eliminating many other health care protections.

It’s important that people continue to raise their voices about the importance of protecting health coverage and care. This case could affect tens of millions of people’s health care. Not only that, but it sets up a very dangerous threat to democracy: After numerous threats to the Affordable Care Act, Congress has repeatedly decided to preserve the law. Throughout the campaign season this year, Americans told their politicians that they want and expect them to protect people with pre-existing conditions. Yet, building on the destructive actions of Congress and the White House in 2017 and 2018, one unelected judge is disregarding the will of the people.