Judge Lobs Political Bomb at Trump by Nullifying Obamacare

(Bloomberg) -- An explosive court ruling to wipe out Obamacare has revived the acrimonious health care battle in Washington and tossed a political bomb in President Donald Trump's lap as he gears up to run for re-election.

The case may not be resolved in the courts before 2020, legal experts said, which could make it a defining issue in the race for the White House and Congress.

Democrats immediately jumped on the Friday night ruling to warn that health care coverage for millions of Americans was at stake due to the Republican-led lawsuit that sought to void popular parts of Obamacare, including protections for pre-existing conditions and a ban on annual lifetime limits.

Also at risk are provisions that affect the wider health insurance market, such as keeping adults on their parents' policies until age 26. While the overall law has remained controversial since its enactment in 2010, those elements are widely popular in suburban areas that dealt a rebuke to Republicans in November's mid-term elections.

'Monstrous Endgame'

House Speaker-to-be Nancy Pelosi said the ruling "exposes the monstrous endgame of Republicans' all-out assault on people with pre-existing conditions and Americans' access to affordable health care."

Trump celebrated the ruling. "Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL," he tweeted on Friday. "Great news for America!"

"When Trump says this is 'great for America,' he's forgetting the health care driven whipping Republicans got in the midterms," said Andy Slavitt, who oversaw Obamacare implementation in the Obama administration. "Rather than let that heal, he's making health care a 2020 prime fight and also putting Republicans in the Senate at great exposure."

'Open for Business'

Despite Trump's celebration, his administration -- via Seema Verma, administrator for the Centers for Medicare and Medicaid Services -- was quick to emphasize that the current law remains in effect, for now. "The exchanges are still open for business," she said on Twitter.

In the 2018 election, Democrats across the country highlighted the GOP's attempts to do away with Obamacare's consumer protections, and it paid dividends as the party won 40 House seats. Health care ranked as the most important issue to Americans by a nearly two-to-one margin, and those who cited it preferred Democrats to Republicans by a striking 52-point margin, according to House exit polls published by CNN.

Republicans struggled with the issue in the campaign. They vowed to support protections for Americans with pre-existing conditions, even if they backed the lawsuit or legislation that would undo those provisions. One prominent Republican ally of Trump said health care could be his "Achilles heel" in 2020, when he's up for re-election.

Reflexive Orthodoxy

"I'm not sure Republicans even know what they're fighting for right now when it comes to health care," said David Jolly, a former Republican congressman from Florida who now identifies as an independent. "Opposing Obamacare has become reflexive GOP orthodoxy, but they just spent six months saying they'd protect pre-existing conditions. Hard to square GOP campaign promises with the court victory by GOP attorneys general."

House Majority Whip Steve Scalise, a Louisiana Republican, said in a statement that "Democrats may have won the House by running a fear-mongering campaign, unfortunately their reckless legislating has not proven to be as effective for the American people who have to live under this failed system."

Judge Reed O'Connor, an appointee of President George W. Bush, sided with Texas late Friday in a lawsuit filed by 20 Republican state attorneys general, and backed by the Trump administration, alleging that the ACA was unconstitutional.

Tax Penalty

The AGs argued that because Congress in 2017 voided the tax penalty for the individual mandate to buy insurance, the provision is no longer constitutional and that the rest of the law is "inseverable" from it and "therefore invalid."

The Texas argument has been met with deep skepticism, even by conservative legal scholars. "It's pretty bananas," said Jonathan Adler, a law professor at Case Western Reserve University in Cleveland who helped craft a separate lawsuit that came within two Supreme Court votes of gutting Obamacare in 2014.

The next step is the Fifth Circuit Court of Appeals, the most conservative appellate court in the country. If the decision is upheld here it's likely headed to the Supreme Court; if it's reversed, some legal experts expect the Supreme Court to turn down the case.

Legal scholars say that if the lawsuit is taken by the Supreme Court, it'll be in 2020 at the earliest that the justices hear the case. That could make it a defining issue in Trump's re-election bid.

Conservative Skepticism

"I can't see who in the Fifth Circuit swallows this, and if they don't," the Supreme Court won't take the the case, predicted Adler, who's also a member of the conservative Federalist Society.

Nicholas Bagley, a professor at University of Michigan Law School, said he doubts the case will make it to the Supreme Court. By far the likeliest outcome is that it gets rejected on appeal at the Fifth Circuit, he said in an email, adding, "No serious conservative has yet endorsed this litigation. That includes very hard-line conservatives."

Republican Senator Susan Collins of Maine said on ABC's "This Week" on Sunday that the judge's ruling was "far too sweeping" and predicted it would be overturned. Senate Democratic Leader Chuck Schumer said he wants a vote in Congress to intervene in the case.

"A lot of this depends on congressional intent," Schumer said on NBC's "Meet the Press." "And if a majority of the House and a majority of the Senate say that this case should be overturned, it will have a tremendous effect on the appeal."

House Ways and Means Committee Chairman Kevin Brady, who helped craft the unsuccessful Republican bill to repeal Obamacare in 2017, said the ruling was "not surprising" because the law was "embarrassingly designed." If Friday's decision is upheld, he said, "ultimately both parties should start over" to remake the health care system.

Republican Senator John Barrasso, a doctor, said on CBS's "Face the Nation" the first step would be to protect coverage for people with pre-existing conditions and there are "a number of ways to do it." Senator Roy Blunt, a Missouri Republican, said "the thing to remember" about the ruling "is that it has no immediate impact."

"This will be another area where this -- health care -- will be used as a political issue way beyond the ramifications of one district judge making a ruling that has no immediate impact," Blunt said on NBC.

(Updates with lawmaker comments Sunday starting in 20th paragraph.)

To contact the reporter on this story: Sahil Kapur in Washington at skapur39@bloomberg.net

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Ros Krasny, Mark Niquette

For more articles like this, please visit us at bloomberg.com

©2018 Bloomberg L.P.


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