Court decision on Affordable Care Act could create political havoc for GOP

WASHINGTON - The judges of the marbled appellate courthouse in the heart of New Orleans once upended civil rights law, issuing rulings that propelled desegregation. This summer, they could upend health care law and with it, the roiling politics of health care in Congress, the White House and the 2020 campaigns.

On Tuesday, the Trump administration and 18 Republican-led states will face off against Democratic-led states over the constitutionality of the Affordable Care Act - the sprawling law the Supreme Court has upheld twice but a federal district judge in Texas ruled invalid late last year.

If the U.S. Court of Appeals for the 5th Circuit, which is hearing these arguments, agrees with the lower court, the "win" for Republicans, who have sought for nearly a decade to ditch the ACA, could cause the GOP the greatest trouble, according to analysts from both parties.

A 5th Circuit ruling that the health care law is unconstitutional would almost certainly catapult the issue back before the Supreme Court - and to the forefront of the 2020 presidential and congressional races, say legal and political analysts. Even if the high court were to decline the case, the drama would raise fresh uncertainties about the millions of Americans who could lose insurance coverage and consumer protections created under the law - especially those with preexisting medical conditions, whom President Donald Trump has vowed to protect even as his administration tries to eliminate the law.

"Rehashing the issue that perhaps most largely cost us the House doesn't make a lot of sense as a political tactic," said one former House Republican leadership aide, referring to last year's midterm elections, in which Democrats successfully accused their GOP opponents of trying to take away Americans' health care.

"Even just bringing back the issue would benefit Democrats significantly, (giving) them all kinds of arguments about the president taking insurance away," said the former aide, who, like many political operatives interviewed for this story, spoke on the condition of anonymity to make candid predictions. Trump "is really playing with fire," the former aide said.

Chris Jennings, a Democratic consultant who held senior health-policy roles in the Clinton and Obama administrations, said that an appeals court ruling against the law "immediately is a political albatross for the Republicans. Each of the Republican candidates (would) have to take a position on what should happen" - either rolling back insurance gains or passing some sort of new health care law.

Either way, Jennings said, it would "completely alter the dialogue" from questions about how to lower drug costs or curb surprise medical bills - with the GOP bashing Democratic plans to expand Medicare - and back to fundamental coverage questions, which play to Democratic strengths in public opinion polls.

The ACA was passed in 2010 by a Democratic Congress and has been a favorite Republican whipping post ever since. Its many strands reach into every sphere of the U.S. health care system. Besides its consumer protections, the most visible elements that would come undone are federal insurance subsidies for most people buying health plans through marketplaces the law created, the expansion of Medicaid in three dozen states and the ability of young adults to stay on parents' insurance policies until they turn 26.

"I don't think health care politics lends itself to intentional retreat of coverage," said Josh Holmes, a Republican consultant and former chief of staff to Senate Majority Leader Mitch McConnell, R-Ky. "I don't think you can get away with that. Largely, whoever's responsible for the disruption is who people blame."

But Holmes predicted that pressure to fill new gaps in health care coverage would mount on both the Republican-led Senate and the Democratic-led House.

The issue is especially problematic for congressional Republicans because of their failed efforts two years ago to dismantle much of the ACA and replace it with more conservative health policies, even though they controlled both chambers of Congress and Trump had just taken office.

"It's no secret this is a vexing legislative issue for Republicans," said another former GOP leadership aide, who predicted that top Republicans on Capitol Hill would point to the Supreme Court's two previous decisions upholding the law and "hope they don't have to figure out a replacement plan, because it's proven to be very elusive."

Legal scholars disagree over how likely the 5th Circuit is to leave Republicans in such a position. The circuit has a conservative reputation, but the three judges who make up the panel are thought to be among its more-measured members. Two were appointed by Republicans: Jennifer Walker Elrod by President George W. Bush and Kurt Damian Engelhardt by Trump. Both are members of the conservative Federalist Society. The third, Carolyn Dineen King, was appointed by a Democrat, President Jimmy Carter.

Questions about the panel's leanings arose in late June, when it questioned whether Democratic states and the U.S. House of Representatives have legal standing to appeal the lower-court decision.

Jonathan Adler, a Case Western Reserve University law professor, said he would be "gobsmacked" if the circuit court agreed with U.S. District Judge Reed O'Connor in Texas, a noted conservative. Adler is among the legal scholars who oppose the ACA but think the Texas case rests on weak legal arguments.

Still, Ramesh Ponnuru, a conservative scholar affiliated with the American Enterprise Institute, said the outcome is never certain.

"The politics of this are very ugly for the Republicans," he said, so the party's congressional leaders "need to get out front and have a plan. . . . Republicans have for 10 years been willing to do just about anything to get rid of Obamacare except actually thinking about health care policy."

McConnell, not eager for another try at an ACA replacement that he doubts Congress could pass, takes a different view.

"There's no point in pushing the panic button," he told reporters in April. "The court system takes a long time to resolve these issues. . . . I don't think any of these policies are in any immediate danger."

The lawsuit was initiated in February 2018 by Texas Attorney General Ken Paxton and his counterparts from other Republican-led states. Their central argument is that the law became unconstitutional when Congress adopted a broad tax bill in late 2017 that ended the ACA's penalty for people who violate the requirement that most Americans carry health insurance. In upholding the law in 2012, the Supreme Court majority said it was legal under Congress' taxing powers.

A year ago, the Justice Department decided not to defend the law, even though administrations typically defend existing statutes. At the time, the administration did not go as far as the Republican attorneys general, arguing that parts of the law were unconstitutional but not all of it.

But this spring, Justice officials hardened their position, saying in a legal brief that the administration now believes the entire law is unconstitutional. The decision was disputed within the administration, with Health and Human Services Secretary Alex Azar arguing against the change, according to individuals familiar with the discussion.

The former House Republican leadership aide said the administration did not confer with congressional leaders before adopting the tougher stance.

On the case's other side are 20 Democratic attorneys general led by California's Xavier Becerra, who said the law remains valid. In their 5th Circuit brief, they argue that in removing the penalty for not having insurance, Congress lowered the tax amount to zero but did not eliminate it.

The House, now in Democratic control, is also intervening, arguing in a brief that the Republican arguments would "deny vitally important care to millions, sow chaos in health-care markets throughout the country, and contravene fundamental principles that should guide interpretation of an Act of Congress."

During the oral arguments, each side will have 45 minutes to present its position. The court says judges try to decide cases within two months after they are argued.