Why Democrats aren’t taking up a bill to neutralize Obamacare’s latest legal threat

The wonky debate over how far Democrats should go to protect Obamacare, explained.

House Democrats promised in the 2018 campaign that they would beat back the Trump administration’s attacks on the Affordable Care Act, and they are ready to begin their counteroffensive. They are narrowly focused for now — and there’s good reason for that.

The influential Energy and Commerce Committee will hold a hearing Wednesday on four bills to undo recent actions by the administration that undermine the health care law. The bills are tightly targeted — reversing Trump-issued regulations and restoring funding for enrollment outreach cut by the Trump administration — but they still represent the first legislation to shore up the ACA to get a hearing in the new Democratic majority. They are starting with limited yet broadly popular ideas.

But looming in the background is the immediate existential threat to the health care law, a lawsuit brought by Republican states to overturn the entire statute. The new majority and their legal advisers have decided that, aside from a vote to join the law’s defense in the courts, they should not pass legislation designed to prevent the courts from throwing out the law in its entirety.

Given the success of prior legal challenges thought to be ridiculous that still found their way to the Supreme Court, some liberal legal scholars have argued House Democrats should use their new majority to pass a bill or bills to protect Obamacare from this latest vulnerability.

“There’s no such thing as risk-free litigation,” Nicholas Bagley, a University of Michigan law professor who has laid out possible actions the House could take, told me. “You should do anything and everything you can to make this misbegotten lawsuit go away.”

But other left-leaning lawyers and high-ranking Democrats see it differently. They believe there is no chance the Republican-led Senate would pass or President Donald Trump would sign such a bill. Moreover, they think Democrats would risk validating the case against the ACA if they tried to pass bills to fix it — by acknowledging that there is a problem to be fixed at all, when the House’s position in the lawsuit is that Obamacare is constitutional as it is.

“Any proposed fixes will likely be partial, would open up the ACA to further amendment in the Senate, and would lend weight to plaintiff legislative history arguments,” says Tim Jost, a health law professor at Washington and Lee University. “This case is winnable in the courts and should stay there.”

That is the prevailing belief among House Democrats right now, and that is why, though they are preparing to start moving bills to shore up Obamacare, they are leaving the most worrisome threat to the law out of their legislative agenda for now.

Democrats are taking up three bills to reverse the Trump administration’s sabotage

The Energy and Commerce Committee will hear testimony Wednesday on a few different bills to reverse the Trump administration’s attacks on Obamacare, usually the precursor to a bill getting a committee vote and then advancing to the House floor.

1) A bill to repeal the Trump administration’s expansion of short-term limited-duration plans

Short-term limited-duration health insurance is not required to comply with the ACA’s requirements around preexisting conditions or essential health benefits. People can be denied coverage based on their medical history, and these plans don’t have to cover basic services like prescription drugs.

And under the Trump administration’s regulations, so-called “short term” insurance — previously limited to lasting just three months — can be renewed for up to 36 months.

The Trump administration projected that 200,000 or so Obamacare customers will switch from marketplace plans to short-term coverage in the coming year. Other groups project even more desertion. Those people will probably be younger and healthier, drawn to the plans by their cheaper prices and because they don’t think they’ll need robust insurance. Actuaries expect that as a result, premiums for Obamacare plans will increase by as much as 10 percent on average, unless states move to regulate short-term plans more stringently.

The Democratic bill would repeal the short-term insurance regulations, blocking them from going into effect.

2) A bill to block the Trump administration’s recent decision to relax regulations for plans sold on the ACA’s insurance marketplaces

The Trump administration released new guidance last fall that would loosen some of Obamacare’s rules for waivers that states can seek to pursue their own health care ideas. One provision would allow customers to use the law’s generous tax subsidies to pay for those short-term insurance plans, heightening the risk that more people would abandon Obamacare for Trump-approved coverage. The requirement that any waiver would cover the same number of people would also be also softened, opening up the possibility that states could get approval for waivers that actually cover fewer people.

The Democratic bill would likewise block the Trump administration’s guidance from taking effect and prevent any similar changes from being implemented in the future.

3) A bill to increase funding for Obamacare enrollment and outreach efforts, which have been cut by the Trump administration

The Trump administration slashed federal funding for outreach and enrollment from $100 million to $10 million in its first year and kept outreach funding at that lower level in its second year. Obamacare enrollment fell off slightly in both those years, and research has shown that many uninsured people who are eligible for the ACA’s financial assistance don’t know that the law’s marketplaces exist or that tax credits are available to them so they can buy health coverage.

The Democratic bill would require the administration to perform enrollment and outreach activities and provide $100 million annually for those efforts.

A fourth bill under consideration would not reverse Trump’s actions, but it would instead force short-term plans to disclose they are not required to comply with Obamacare’s rules for preexisting conditions.

The debate over whether House Democrats should pass a bill to stymie the Texas lawsuit

Notably missing from the Democratic menu is any item to address the ongoing lawsuit, brought by Texas and 19 other Republican-led states, to overturn the Affordable Care Act entirely. Legal experts dismiss the states’ argument as “absurd,” yet they worry it could find an audience among conservative jurists, given the prior success of anti-Obamacare lawsuits thought to be spurious that still found their way to the Supreme Court.

That argument has already won in a lower federal court, after all, though the decision is on hold pending appeal.

The foundation of the conservative state’s case is that because the Republican Congress repealed the individual mandate penalty in the 2017 tax law, removing the provision that Chief Justice John Roberts used to justify upholding the law’s constitutionality in 2012, the entire law must now fall under Roberts’s theory. Legal scholars on the left and the right say it’s a ridiculous case; Congress amends laws all the time, and the earlier Congress decided to repeal the mandate penalty while preserving the rest of the law. It’s legally vacuous to try to now apply Roberts’s old logic to a newly amended law.

Some left-leaning lawyers believe House Democrats should still pass a bill to neutralize the threat and either force Republicans to agree or use their inaction as a cudgel against them for failing to protect Americans from the lawsuit’s potential fallout. Bagley and his Michigan colleague Richard Primus laid out some options in the Atlantic in December: 1) increase the mandate penalty to a nominal amount (even $1); 2) pass a bill declaring that the rest of Obamacare should stand even if the mandate falls; or 3) simply repeal the mandate entirely, as it is still technically on the books even though the penalty for not complying is $0.

If any of those options became law, they argued, it would leave the current lawsuit with no legal leg to stand on and remove the threat of conservative judges or the Supreme Court deciding to overturn the entire law, as one judge has already done. If Republicans refused to act, then House Democrats “could hang this case like an albatross around the neck of the Republicans,” Bagley says.

“I’m tired of seeing Congress run for the courts. Protect your institutional interests,” he told me. “This is political hardball being played out in the courts right now. Judges who are ruling against the ACA — they’re not applying the law in a careful, thoughtful way. They are partisan actors in a partisan game.”

But the argument hasn’t found purchase among House Democrats or their legal advisers. The House voted the day Democrats took over to join the legal defense of the law in the Texas case, but leadership seems content to leave it at that.

House Democrats believe there is no chance Senate Republicans or the White House would agree to such a plan without serious concessions — noting that the Justice Department has joined in part the lawsuit overturning the ACA — and that if they moved to fix the law, they would give the Republican states fodder to bolster their case that the law has a legal vulnerability.

“We take very seriously the threat we could have a worst of all worlds: A legislative fix does not become law and only serves to undermine the position of the House, which is that the ACA is constitutional as is,” one House aide told me.

Another source familiar with the situation elaborated: “If there was a chance that a clean fix could be enacted, it would be worthwhile. ... But there is zero chance that a clean fix could be enacted, and the downside is it creates all of these other things.”

The internal debate seems to be settled; Democrats have chosen their path. That explains why, even as House Democrats are undertaking the work to protect the ACA, they have left the latest legal threat off their to-do list.

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