Texas asks a federal judge to block Obamacare nationwide

Critics say doing so would risk the coverage of tens of millions.

A protester dressed as the Grim Reaper holds a sign during a rally before a hearing in a lawsuit against the Affordable Health Care Act in Fort Worth on Sept. 5, 2018. | by Leslie Boorhem-Stephenson for The Texas Tribune Leslie Boorhem-Stephenson for The Texas Tribune

FORT WORTH — On one side of West 10th Street, lawyers in blazers and wingtip shoes argued over the legality of Obamacare in a high-ceilinged, wood-paneled courtroom. Meanwhile, across the street in Burnett Park, dozens of protesters made the case for the law in their own way, wielding signs like “Healthcare for all” and “Why oh why are you killing me?”

Both groups had assembled Wednesday morning to mark a critical hearing in a Texas-led challenge to the Affordable Care Act, a sweeping lawsuit that aims to do what dozens of Congressional attempts could not: entirely repeal perhaps the greatest legislative success of former President Barack Obama. Texas Attorney General Ken Paxton, leading a coalition of 20 states, sued in February to end the law, arguing that after Congress gutted one of its key provisions, the entire statute must fall. California, leading a counter-coalition of 16 states and Washington D.C., argues that the entire law remains constitutional and should remain in place.

At the hearing Wednesday, Texas aimed to convince U.S. District Judge Reed O’Connor to block the law across the country as it continues to fight a months- or years-long legal case that could land before the U.S. Supreme Court.

Citing rising health care premiums, Texas says such an injunction is necessary to preserve state sovereignty and to relieve the burden on residents forced to purchase expensive insurance coverage. California counters that temporarily blocking or ending the law would cause more harm to the millions of people insured under it, particularly the 133 million people the state says enjoy the law’s protections for pre-existing conditions. The U.S. Department of Justice, which has taken up many of Texas’ positions in the case, nonetheless sided with California, arguing that an immediate injunction would throw the health care system into chaos.

The Texas Tribune thanks its sponsors. Become one.

The protesters in the park Wednesday — including one dressed as the Grim Reaper, with an “I am the GOP health care plan” sign around his neck — seemed to line up with California. Leading their charge was Justin Nelson, the Democrat challenging Paxton in the November election, who has said he would withdraw from the “misguided” lawsuit on his first day in office. According to the liberal-leaning Center for Public Policy Priorities, 20 million low- and middle-income people would lose coverage if Texas’ lawsuit succeeds.

Texas has sued over Obamacare before, and just last month the state won a small victory — also in O’Connor’s court — over a fee associated with the law, sending some $300 million back into state coffers. But this sweeping lawsuit would go much further; it aims to entirely undo the landmark work of legislation. And this time, Texas has several major advantages, most notably the apparent support of the Department of Justice, which in June said it would not defend major provisions of the law, including its protections for individuals with pre-existing health conditions ranging from asthma to cancer.

Inside the courtroom, where protesters’ shouts were inaudible, Darren McCarty, an assistant attorney general for Texas, argued that “the policies, the merits of the ACA are not on trial here” — just the legality. In that legal argument, McCarty leaned heavily on a 2012 U.S. Supreme Court decision on Obamacare, which upheld the law by construing the “individual mandate,” a penalty for not purchasing insurance, as a tax that Congress has the power to levy. Texas argues that after Congress lowered that fee to $0 in a slate of December 2017 tax cuts, the fee is no longer a tax and thus no longer constitutional. With it must go the rest of the law, the state claims.

“There is no more tax to provide constitutional cover to the individual mandate,” McCarty said. “Once the individual mandate falls, the entire ACA falls.”

California countered that a tax can be a tax even if it doesn’t collect revenue at all times. And, attorneys for the state claim, even if the individual mandate is unconstitutional, the court should let lie “hundreds of perfectly lawful sections,” argued Nimrod Elias, deputy attorney general for California.

The case will likely turn on that question of “severability”— whether one slice of a law, if ruled unconstitutional, must necessarily doom the rest. O’Connor, who nodded along carefully throughout the hearing, lobbed most of his questions at the California attorneys, and many of them focused on whether the various pieces of Obamacare can be disentangled.

The Texas Tribune thanks its sponsors. Become one.

Elias said that in the vast majority of cases, the Supreme Court acts with “a scalpel, not a sledgehammer,” leaving in place most of a law even if one provision must be struck. The Texas coalition pointed to a more recent case in which the high court struck an entire law based on a narrow challenge.

O’Connor — a George W. Bush-appointee who has ruled against Obamacare several times, albeit on narrower grounds — also honed in on the question of legislative intent. Texas argued that the individual mandate was a critical piece of the law’s original version. But California argued that in 2017, in gutting the individual mandate without touching the rest of the law, lawmakers made it clear they wanted the law to persist without that provision.

“Would the legislature prefer what is left in statute to no statute at all?” Elias questioned. “We know what Congress intended based on what Congress actually did.”

Paxton, who did not attend the hearing in person, said in a statement Wednesday afternoon that O’Connor should both block the law and strike it down entirely.

“Texans and other Americans should be free again to make their own healthcare choices, including which doctor they want to see,” Paxton said.

A decision is expected in the coming weeks. As he left the courtroom, O’Connor said he’d “get something out just as quickly as I can.”

Disclosure: The Center for Public Policy Priorities has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.