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Why current court battle represents existential threat to Obamacare

The Affordable Care Act is again facing a critical legal challenge, as a federal appeals court in New Orleans considers a lower court’s ruling that the law is unconstitutional. The Justice Department isn't defending the law, but Democratic lawmakers and officials are. John Yang talks to Axios' Sam Baker about the legal test and how the law's provisions extend beyond individual health insurance.

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  • Judy Woodruff:

    The Affordable Care Act, often referred to as Obamacare, has faced a series of threats to its existence ever since it became law nearly a decade ago.

    The latest challenge, a lawsuit filed by Republican governors and attorneys general, and backed by President Trump. The law was the subject of a crucial court hearing today.

    John Yang is here to fill us in — John.

  • John Yang:

    Judy, a three-judge panel of a federal appeals court in New Orleans heard about 90 minutes of oral arguments today in this case, with enormous stakes for millions of Americans.

    Congress set the stage for this challenge in the tax bill that President Trump signed into law in 2017. The measure eliminated the penalty on Americans who failed to maintain health insurance.

    The Republican governors and attorneys general argue that, since the Supreme Court upheld the health care law as a valid exercise of Congress' taxing authority, taking the tax away makes all of the law unconstitutional.

    Late last year, a federal district judge in Texas agreed. At first, the Trump administration said some of the law should remain. But in March, the Justice Department reversed course.

    Since the administration is not defending the law, Democratic attorneys general and members of the House are leading the appeal. Since its passage, the health care law has ingrained itself deeply into the U.S. health care system. More than 20 million more Americans are now covered by its provisions.

    It has hundreds of other provisions that have directly and indirectly changed health care, including protections for people with preexisting medical conditions, and allowing children to be covered by their parents' health plans up to age 26.

    The suit could send the matter back to the Supreme Court for the third time in the middle of the 2020 campaign.

    Today, Senator Patty Murray of Washington state signaled that Democrats would make it an issue.

  • Sen. Patty Murray, D-Wash.:

    People are watching this very closely. They are not going to forget who stood up to defend their health care, and who brought a partisan lawsuit to throw it out the window.

  • John Yang:

    If the law is struck down, Senate Majority Leader Mitch McConnell said lawmakers would act quickly to preserve one of its most popular provisions.

  • Sen. Mitch McConnell, R-K.Y.:

    I think the important thing for the public to know is, there's nobody in the Senate is not in favor of covering preexisting conditions. Nobody. And if that were, under any of these scenarios to go away, we would act quickly on a bipartisan basis to restore it.

  • John Yang:

    The judges gave no indication of when they will rule in the case.

    Sam Baker, the health care editor at Axios, was in the courtroom this afternoon and joins us now.

    Sam, you also cover the Supreme Court. You're used to hearing these arguments like today.

    I want to play a little bit of that. The issue of whether the entire bill falls or the entire law falls because one provision falls is something called severability.

    And Judge Kurt Engelhardt, who was nominated by President Trump, pressed the Democratic lawyer on congressional intent on that point.

    Let's take a listen.

  • Kurt Engelhardt:

    Couldn't Congress have said, and, oh, by the way, we think all of these provisions are such excellent ideas and helpful to the public that, if any of them go by the wayside, well, then we would want all of these to — the remainder to continue to apply?

  • Man:

    But the Supreme Court had said that Congress' silence on this point is just that, silence, and it doesn't create a presumption against severability.

  • John Yang:

    Sam, what — help us understand that. What do you make of that exchange?

  • Sam Baker:

    It really gets right to the core of what's going on here.

    So these arguments today sort of almost assumed that the individual mandate is probably now unconstitutional. The court hasn't actually decided that. And its decision wouldn't be final. But, you know, the big question that they sort of have to debate is, all right, well, if we say the individual mandate goes away, how much else goes away?

  • John Yang:

    Sorry. Go ahead.

  • Sam Baker:

    Well, there was a time when the Trump administration was saying, well, just take out the mandate and then also protections for people with preexisting conditions.

    Now, they have changed that and say, you have to strike down the whole law. And that's, as you said, raising all these questions about other largely unrelated provisions.

  • John Yang:

    And the individual mandate, if it goes away, there's really no enforcement mechanism now that that penalty's been taken away. So would there be much of an effect if only the individual mandate falls?

  • Sam Baker:

    No, there wouldn't.

    And I if think, if that's what happens, Democrats will probably breathe a sigh of relief and call that a win and live to fight another day.

  • John Yang:

    Talk about the questioning from the judges about the other provisions of the law, about the other parts, and whether they would fall away as well.

  • Sam Baker:

    Yes.

    This really — you know, the — we're all sort of used to — when the Affordable Care Act was first passed and when it went to the Supreme Court the first time, we heard so much about how the individual mandate is wrapped up with the protections for people with preexisting conditions, and it's all sort of intertwined, and you can't kick one leg out from under that stool.

    The mandate didn't turn out in practice to be quite as potent as people thought it would be. Then Congress has gone ahead and repealed one part of that. But there's still a lot of thinking sort of along the lines of, look, you told us that this one thing couldn't go away in isolation.

    So, if we're going to strike that down, it seems like we probably have to strike down at least some more here. The first things to go would probably be the biggest and most popular. That's protections for preexisting conditions.

    But there was a lot of — there were a lot of questions today about menu labeling. That's a part of the Affordable Care Act that many people maybe don't know about. That's why fast food restaurants have to have calorie labels on their menus. That's because of Obamacare.

    And a couple of the judges were sort of saying, well, I don't know, do we really have to throw that away because of the individual mandate? Maybe yes, maybe no. But those are the kinds of questions they're going to have to answer or figure out a new process to get an answer to.

  • John Yang:

    And it really does point out how pervasive or how the Affordable Care Act has affected, directly and indirectly, so much of the health care system.

  • Sam Baker:

    Yes, that's exactly right.

    I mean, here, you would be getting rid of the private insurance coverage that the law enables people to buy, the Medicaid expansion, these really huge structural changes that we're sort of all used to because they cover tens of millions of people.

    The Affordable Care Act also created a pathway for the FDA to start approving a new class of drugs. And they have been using it. There are drugs on the market that were approved that way. So if that approval pathway goes away, the drug companies are already sort of starting to use it to create that class of drugs. They'd have to stop.

    Menu labeling is one thing. There's a lot of changes that the law made to Medicare, the new authorities that it gave to any administration on Medicare, that even the Trump administration is making pretty substantial use out of, trying to make that program more efficient.

    It changed some criminal statutes in terms of Medicare fraud. There were questions today about, can you still prosecute people for Medicare fraud, because that was technically — this or that statute was amended by the Affordable Care Act.

    It's really — especially after all this time, as you said, it's just sort of seeped in everywhere.

  • John Yang:

    Well, we will have to wait and see what the decision will be later this year — or perhaps later this year.

    Sam Baker, the health care editor at Axios, thank you very much.

  • Sam Baker:

    My pleasure.

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