In court, it’s red Texas vs. blue California for future of Obamacare

A lawyer for Texas Attorney General Ken Paxton will be in a federal courtroom Tuesday asking three appellate judges to declare the Affordable Care Act unconstitutional, and this time it will be with the full support of the Trump administration.

The U.S. Department of Justice earlier this year announced that the agency, like Paxton, believes the entire law should be struck down, reversing its previous position that certain sections, including a provision allowing states to expand Medicaid, should not be affected by the case.

Opposing them in Tuesday's oral arguments at the 5th U.S. Circuit Court of Appeals will be lawyers for the U.S. House and 20 Democratic-led states who say striking down the law would wreak havoc on the health care system and put lives at risk.

The showdown will produce a decision that could give the U.S. Supreme Court another crack at deciding whether the 2010 law, a signature achievement of Democratic President Barack Obama, remains in effect.

At stake is health insurance for about 20 million Americans, either directly through the program sometimes called Obamacare or through expanded Medicaid coverage, as well as protection for millions more who have pre-existing medical conditions.

It's a fight that pits the nation's two largest states, Republican Texas against Democratic California, and two very different attorneys general who have stepped to the front.

Paxton, a conservative Republican who calls Obamacare an improper expansion of federal power into the health care system, gathered 17 other GOP-led states into a coalition that filed suit in February 2018 to overturn the Affordable Care Act.

"Obamacare is a failed social experiment," Paxton said. "The sooner it is invalidated, the better, so each state can decide what type of health care system it wants and how best to provide for those with pre-existing conditions, which is federalism that the Founders intended."

With the act out of the way, Paxton said, President Donald Trump and Congress would have an opportunity to enact a plan "that ensures Texans and all Americans will again have greater choice about what health coverage they need and who will be their doctor."

Leading the fight to preserve the law is California Attorney General Xavier Becerra, a Democrat who believes Paxton and others are deluded if they think a gridlocked Congress -- where Republicans have tried and failed more than 70 times to repeal the Affordable Care Act -- could fill the void if Obamacare is struck down.

Becerra called the legal challenge a dangerous and reckless move.

"The Affordable Care Act is an integral part of our health care system," he said. "For the last nine years, it has ensured that seniors, young adults, women, children and working families have access to high-quality, affordable care. It has prevented insurance companies from discriminating against 133 million Americans with pre-existing conditions."

Striking down the law also would threaten those under age 26 who are covered under a parent's health plan, 12 million seniors with prescription drug benefits under Medicare and families that rely on tax credits and employer-sponsored plans to afford insurance, Becerra said.

The legal case

Paxton's case against the Affordable Care Act focuses on the Trump tax cuts of 2017, when Congress eliminated the tax penalty under the law's individual mandate, a provision that requires most Americans to have some form of health insurance.

According to Paxton, when the U.S. Supreme Court upheld the law in 2012, it did so because the individual mandate was a proper use of congressional taxing authority. With the penalty stripped out, there is no legal basis for the act, he said.

"Congress meant for the individual mandate to be the centerpiece of Obamacare. Without the constitutional justification for the centerpiece, the law must go down," Paxton said.

U.S. District Judge Reed O'Connor of Fort Worth agreed, ruling in December that the individual mandate's penalty was so central to the intentions of Congress that the entire act was unconstitutional.

Becerra asked the 5th Circuit Court to overturn O'Connor's ruling, arguing that Congress has the authority to encourage people to buy health insurance without imposing a tax penalty. In addition, he argued, the individual mandate remains a tax provision that Congress left on the books but which does not, for the moment, generate tax revenue.

"Either of these approaches preserves the constitutionality of (the mandate)," Becerra told the appeals court.

But even if the tax-free mandate were found to be unconstitutional, that should not doom other parts of the law, including provisions expanding Medicaid and protecting pre-existing conditions, Becerra argued.

The Affordable Care Act remains in effect during the appeal.

Late questions

The 5th Circuit Court introduced a new wrinkle when, less than two weeks away from oral arguments, it ordered all sides to submit briefs discussing whether the Democratic-run states, as well as the U.S. House, had standing to appeal O'Connor's ruling.

Supporters of the law were alarmed by the request, noting that O'Connor's decision would stand if the appeal is tossed out on procedural grounds.

The Justice Department responded with a brief arguing that the U.S. House cannot appeal because its claim -- that it has the right to defend an act of Congress -- is not recognized by the courts. In addition, the states lack standing because they have not shown that they would be injured by O'Connor's ruling, the agency said.

Briefs from Paxton and Becerra are due to be filed before 5 p.m. Friday.

What's coming next

Tuesday's oral arguments in New Orleans, where the 5th Circuit Court is based, will begin at 1 p.m. Tuesday, with each side having 45 minutes.

The court rejected requests to stream the arguments live but said it will make an audio recording available on its website within one hour after the session ends.

The Republican states will be represented by Texas Solicitor General Kyle Hawkins, the chief appellate lawyer in Paxton's office who will share time with a lawyer from the Justice Department.

The Democratic states will be represented by Samuel Siegel, deputy solicitor general of California, who will share time with a lawyer for the U.S. House.

Two judges on the panel were named by Republican presidents, one by a Democrat:

• Carolyn Dineen King, nominated by President Jimmy Carter in 1979.

• Jennifer Walker Elrod, nominated by President George W. Bush in 2007.

• Kurt Engelhardt, named by Trump last year.

The panel has no deadline to issue its decision. The losing side will be able to ask all 16 active judges on the court to reconsider that ruling and, ultimately, ask the U.S. Supreme Court to issue its own decision on the future of the Affordable Care Act.

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