FORT WORTH (CN) — A 20-state coalition sued the federal government late Monday, saying the end of the Obamacare individual mandate in the December tax cut renders the law unconstitutional. The lawsuit puts the Trump administration in the uncomfortable position of defending a law that it spent all of 2017 unsuccessfully trying to repeal in Congress.
Led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel — both Republicans — the states say that ending the individual mandate tax penalty in the Tax Cuts and Jobs Act of 2017 effectively guts the constitutionality of the Affordable Care Act of 2010.
They claim that when the U.S. Supreme Court upheld Obamacare in 2015, it said the individual mandate would be an unconstitutional exercise of federal power without the tax penalty.
The states’ lawsuit is, in essence, a bank shot, aimed at killing the Affordable Care Act for good.
“Texans have known all along that Obamacare is unlawful and a divided Supreme Court’s approval rested solely on the flimsy support of Congress’ authority to tax. Congress has now kicked that flimsy support from beneath the law,” Paxton said in a statement Monday evening.
“The U.S. Supreme Court already admitted that an individual mandate without a tax penalty is unconstitutional. With no remaining legitimate basis for the law, it is time that that Americans are finally free from the stranglehold of Obamacare, once and for all.”
Paxton said he hopes the lawsuit will “effectively repeal Obamacare” and give President Donald Trump and Congress the chance to replace it with something with more choices and better prices.
Congress’ ending of the individual mandate “renders legally impossible the Supreme Court’s prior savings construction” of Obamacare, the lawsuit states.
“Even though Congress sought to do something unconstitutional in enacting the mandate under the Commerce Clause, the Supreme Court salvages its handiwork as a lawful exercise of the taxing power,” the 33-page complaint states. “But things changed on December 22, 2017 … the new legislation eliminated the tax penalty of the ACA, without eliminating the mandate itself. What remains, then, is the individual mandate, without any accompanying exercise of Congress’ taxing power, which the Supreme Court already held that Congress has no authority to enact.”
The Internal Revenue Service and U.S. Department of Health and Human Services are co-defendants in the case. Neither could be reached for comment late Monday evening.
Texas and Wisconsin are joined in the lawsuit by Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Utah and West Virginia.
This is the second time Paxton has sued the federal government over Obamacare. Texas, Kansas and Louisiana sued in 2015 over regulations that they claimed illegally tax states to pay a health insurance providers fee or risk losing Medicaid funding. Texas must pay the IRS $120 million per year for Obamacare regulations though it did not expand Medicaid or create a state Obamacare exchange, Paxton said Monday.
Critics say Monday’s lawsuit is politically motivated and will take health care away from millions of Texans while raising premiums.
Brad Woodhouse, director of Protect Our Care and a former Democratic National Committee communications director, said the lawsuit will end the expansion of Medicaid that has been critical in the fight against the opioid epidemic and keeping rural hospitals open.
“Moreover, it would once again allow insurers to discriminate against Texans with pre-existing conditions, re-impose lifetime limits on Texans’ coverage, charge Texas women more for coverage, impose an age tax on older Texans, and kick young adult Texans under the age of 26 off family coverage,” Woodhouse said in a statement Tuesday. “It’s time for Ken Paxton and President Trump to move on from their war on Texans’ health care and start working on bipartisan solutions to protect people’s coverage and bring costs down.”
An Urban Institute study released on Monday concludes Texans face a 20.2 percent premium increase in the individual market next year because of the “Republican sabotage” of Obamacare, Protect Our Care said.