As Texas seeks to overturn Obamacare, attention focuses on a potential swing judge

NEW ORLEANS — On the left was Judge Carolyn Dineen King, an appointee of Jimmy Carter; on the right sat Judge Kurt Engelhardt, a nominee of Donald Trump, and in the center sat Judge Jennifer Walker Elrod, the George W. Bush appointee expected to represent the critical swing vote on a three-judge panel now charged with deciding the constitutionality of the Affordable Care Act.

It was that perhaps fitting seating arrangement that greeted attorneys for Texas on Tuesday afternoon, as the state and its allies asked this three-judge panel on the U.S. 5th Circuit Court of Appeals to strike down the sweeping health law known as “Obamacare,” a legal means to a political end that has eluded conservatives for the better part of a decade.

Texas won a major victory in its bid to end the law in December, when a federal district judge in North Texas sided with the state, declaring that the law is unconstitutional in its entirety after Congress in 2017 gutted one of its important provisions, a tax penalty for individuals who chose to remain uninsured. The U.S. Department of Justice, in a highly unusual move, has declined to defend the law.

A California-led coalition of blue states that has stepped in to oppose Texas in the lawsuit quibbles with that question of “severability,” arguing that even if one slice of the law must fall as unconstitutional, its other hundreds of provisions — including a host of popular patient protections — should stand. The question of how much of the law may rightly be salvaged was a focal point of court discussions Tuesday.

Texas’ odds of total vindication remain in question after nearly two hours of questions before the three judges.

Most of the unusually large courtroom audience of journalists and interested but unaffiliated attorneys focused on Elrod at the center. By far the most vocal judge of the three, Elrod probed both sides on the issue of standing — whether they have the right to participate in the lawsuit at all. And she appeared highly focused on her court’s options for ordering a remedy, seeming to weigh options for sending the case back to a lower court for further consideration.

Engelhardt, who is among the newest appointees to the court, was harsh and occasionally sarcastic, asking more questions of the blue state coalition than he did of the Texas-led team. He seemed skeptical of the standing of both the California-led coalition and the Democratic-majority U.S. House of Representatives, which intervened in the case although the Republican-majority U.S. Senate did not.

The Senate, Engelhardt remarked, “is sort of the 800-pound gorilla that’s not in the room.”

King, meanwhile, did not speak at all.

The panel is expected to rule in the coming weeks, when an appeal from the losing side is all but guaranteed. But there likely will be no immediate impact on health coverage: The federal government will continue to enforce the law pending “final resolution of this case,” August Flentje, a Justice Department lawyer, said Tuesday.

The losing side could either appeal to the U.S. Supreme Court or ask the entire 5th Circuit to hear the case “en banc.” Either court could decline to hear the case.

Hanging in the balance as the judges mull what they heard: the subsidized health coverage of about 1 million Texans, a suite of low-cost services guaranteed to all individuals with health insurance, and the law’s popular protections for patients with preexisting conditions.

Douglas Letter, an attorney for the U.S. House, pointed to those provisions, telling the judges, “These are the kinds of things that would be struck down if there is no severability.”

“Couldn’t the House remedy that?” Engelhardt demanded. “Isn’t that exactly the point?”

Why, he questioned, should federal judges become “the taxidermist” charged with carving up the Affordable Care Act?

Neither side advocates taxidermy; both sides take an absolute position on severability. California argues that all of the law is separate from the mandate, and Texas argues that none of it is, as the result of what Solicitor General Kyle Hawkins characterized as “an inseverability clause.”

But the court may still go another way. Elrod asked several questions about which provisions were more directly connected to the individual mandate.

“What do you say to people who say it’s absurd to say that the mandate isn’t severable from, say, the calorie provisions?” she questioned at one point.

The appeals court here was the latest stop in what, for Texas Republicans, has been a decadelong quest to end a sweeping health care law that now touches practically every node of the health care system. But if the Texas-led coalition succeeds this time, it could bring unintended consequences for the GOP-led states. Health care loomed large in the 2018 elections, with Democrats in Texas and elsewhere attacking Republican adversaries for a lawsuit they warned would strip millions of people of their health coverage.

Total abolition of Obamacare would leave Republican states’ policymakers scrambling to replace the law. And a final resolution to the case could come at the height of the 2020 elections, as Democrats and Republicans spar over issues like health care on the national stage.

Texas Gov. Greg Abbott has said that should the law remain struck down, state leaders would craft a replacement. But the state has taken few steps toward planning for that outcome even as its litigators project optimism about the lawsuit.

“We never heard anything about any Republican plan,” said state Rep. John Bucy, an Austin Democrat who forced a House vote on Medicaid expansion this session. “I think some lightbulbs start clicking on, but politically, there's such a concern for them on the other side that we're having a hard time getting real progress.”

Texas has the highest uninsured rate in the nation. Experts expect it to climb significantly if Obamacare is repealed.

Texas Attorney General Ken Paxton, who did not appear in court Tuesday, said that success in the lawsuit would be “a victory for all Americans.”

“When Obamacare is struck down once and for all, legislators across the country can get back to crafting policies that address the needs, and conform with the values, of their own residents,” Paxton said.

Legal scholars, including many on the right, have long been dubious about Texas’ arguments, particularly on the question of severability. Many did not take the lawsuit very seriously until December, when U.S. District Judge Reed O’Connor sided with Texas and struck down the law. O’Connor, who is something of a favorite for the Texas Attorney General’s Office, has heard a disproportionate number of the state’s challenges to the federal government.

However the court decides, the stakes are high.

“If they have their way, millions of Americans could be forced to delay, skip or forego potentially life-saving healthcare,” California Attorney General Xavier Becerra said in a statement. “Our state coalition made it clear: on top of risking lives, gutting the law would sow chaos in our entire healthcare system.”

Edgar Walters contributed to this report.