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How the “Obamacare is unconstitutional” case might just be a big scam perpetrated against GOP AGs

by Resurgent Insider Read Profile arrow_right_alt

The Democratic-held Congress and President Obama made a huge mistake when they rammed Obamacare through nearly a decade ago now.

Years go by and conservatives are still pissed off about it– rightly– as it has resulted in more people being insured but has been a meager success if not an outright failure when it comes to bringing actual costs for consumers down, improving health care and letting people keep the providers they want.

So understandably, there’s a lot of hope among average American opponents of the law for the lawsuit being brought by a bunch of Republican Attorneys General to have it declared unconstitutional.

United States Supreme Court in Washington DC

That lawsuit was given fresh life recently when a Texas judge sided with the AGs, ruling the individual mandate unconstitutional and simultaneously so integral to the law that the whole of Obamacare was in fact unconstitutional.

But among conservative health care policy wonks, including those who sharply oppose the law and want it repealed altogether, not “replaced” or “reformed,” there is deep skepticism about the case in which the Trump administration has now decided to side with the AGs and avoid defending Obamacare.

This is not because they want Obamacare kept on the books.

Rather, it involves a set of legal arguments and a bigger political one: That by the GOP putting its eggs in the lawsuit basket, the congressional GOP is engaging in a dodge on health care policy that underlines the lack of a Republican alternative to Obamacare and simultaneously results in the party getting tagged as anti-health care, the same way it did ahead of 2018 to poor effect in many swing districts.

The political argument is pretty straightforward. A lot of people have a lot of issues with Obamacare. But most fundamentally, a lot more people are worried about coverage for pre-existing conditions going away (and other benefits within the law). The GOP doesn’t have a party-wide, good answer for this, and it needs one. The lawsuit doesn’t force the GOP’s hand here, which means it’s basically just kicking the can down the road– and badly.

The legal arguments are a little more complex but largely come down to six things, which underline the “badly” point.

With regard to the case itself, a big problem is the question of standing, as in it’s not clear if the plaintiffs have any. Because the law of the land now is that the penalty for not carrying insurance, or the “tax” to use Chief Justice John Roberts’ parlance, is exactly zero, no one is being adversely impacted by the law at this time. If no one is suffering loss, that creates a standing issue.

However, even if that were not the situation, a further problem would be that the mandate “elimination” that Congress engaged in wasn’t actual elimination, it was a simply taking the penalty rate, or again “tax rate” if you will, down to $0 or 0 percent. That is not getting rid of the mandate, or the “tax.” It’s simply setting it at a very, very low level.

Third, while one of the better anti-Obamacare legal arguments used to be that authors of Obamacare messed up by not including what lawyers like to call a severability provision– i.e., if any part of the law is found unconstitutional or otherwise unlawful, it can be cut out of the rest of it– by reducing the penalty for not carrying insurance the way the GOP-led Congress did, they implicitly demonstrated that the law is indeed now severable. That means it’s legally much tougher to throw the whole thing out even if you accept that the mandate is unconstitutional

Then, we come to what is perhaps the bigger problem with all this: Chief Justice Roberts himself.

A new book on Roberts makes clear that he went to great lengths to keep Obamacare as the law of the land. Given the current makeup of the court, it seems unlikely that Roberts’ attitudes would be conducive to a sudden reversal and decision by the Court that Obamacare is unconstitutional.

But more critically than that, there are other “Roberts problems.”

One is that when the case was originally heard, Obamacare was not in full effect. Thus, overturning the law would not have resulted in any “loss” to anyone. That’s hardly the case now; it’s been in effect for years at this point, with lots of people benefiting from things like the pre-existing coverage provisions. Loss would demonstrably now occur for a slice of people affected by it. That is said to be a hurdle from Roberts’ perspective.

Finally, though, unless Roberts has magically changed his mind and concluded the mandate isn’t a tax– though the congressional GOP’s handling of the issue underlines their acceptance that it is– it’s not a tax that looks like it’s worth changing entire case law over. Ironically, if the GOP had rewritten tax law to increase the Obamacare penalty to the same amount as an average American would pay in Obamacare premiums, the case would, some conservative health care policy wonks think, have a better chance of success with Roberts on this front. But the GOP’s own behavior suggests it is a tax, not a Commerce Clause-troublesome mandate, and it’s hard to imagine Roberts getting worked up about a $0, 0 percent tax.

A lot of the blame for the Trump administration going along with the lawsuits’ architects and saying they won’t defend Obamacare is being placed squarely on the shoulders of both the AGs in question, especially Texas Attorney General Ken Paxton who is also seen as having tipped Trump’s hand on the Deferred Action for Parents of Americans (DAPA) and Deferred Action for Childhood Arrivals (DACA) programs.

And of course, the left is keen to blame President Trump, too, who weirdly has jumped with both feet into this despite his lengthy history of supporting more, not less, government intervention in the health care space. (Though perhaps the President is once again “playing 3-D chess” and this is all a long-game move to ensure we get a single payer system for all, like he campaigned on in 2015 and 2016 and like he’s touted before with regard to the Canadian system).

Blame is also being placed on Chief of Staff Mick Mulvaney, who liberals have come to regard as their arch-nemesis for his anti-regulatory instincts and tenure at the Consumer Financial Protection Bureau where he unwound a bunch of overreach on former head and unsuccessful 2018 Ohio gubernatorial candidate Richard Cordray’s watch. And then there is Russ Vought, beloved of many conservative activists and conservatives in Congress.

But there’s one person who appears to be an architect of the Trump administration lining up with proponents of this unlikely-to-succeed lawsuits who isn’t getting mentioned a lot. According to Politico:

Driving the dramatic action were the administration’s domestic policy chief, Joe Grogan… according to three sources with direct knowledge of the decision.

Who is Joe Grogan? He’s certainly less high-profile than Mulvaney and Vought. He also seems like someone more determined to undermine Republicans’ interests on health care, too– or at least Trump’s, depending on how cynical one is about Trump’s true intentions in this policy area.

Just recently, Grogan got busted speaking at a hospital conference and trash talking the 340B drug discount program that the Trump administration just took steps to bolster with ceiling price rules and a transparency tool, probably because Trump administration officials know that while no program is immune from critiques, a heck of a lot of Trump voters rely on it and it costs taxpayers literally nothing. Grogan said:

“There are too many distortions, too many games being played, and too much money being sucked out of the pockets of American patients and taxpayers without fair value. It has to stop”

That’s a facially absurd comment, given that the program costs taxpayers literally zero dollars, and drugs sold through the program constitute a minute sliver of pharmaceutical sales nationwide. It’s also interesting that Grogan previously was a lobbyist for a drug company– Gilead Sciences– that happens to hate the program in question. This brings us to the broader point regarding the Obamacare lawsuit.

It looks a lot like the people pushing this lawsuit, and the Trump administration decision not to defend Obamacare– justifiable as that is in view of previous decisions by Democratic leaders not to defend things like existing gay marriage laws– are using their positions in the administration to further the jobs they used to have, but which really should be being done by other people now.

It’s not Grogan’s job to be doing his former employer’s bidding on that former employer’s pet peeve issue while serving in an administration that demonstrably takes a different view, given its own rule making.

And commendable though Mulvaney’s fight against Obamacare is, he is not a Member of Congress anymore– and fundamentally, to repeal Obamacare, the courts aren’t the right venue or the right answer. The proper way to handle this is for Republican Members of Congress, who have repeatedly run on repealing Obamacare and until recently had majorities in both chambers allowing them to do it, to actually repeal Obamacare and do what they have been saying they will do for years now.

All the Trump administration’s decision will likely do, on health care policy wonks’ read, is a) convince perhaps a small sliver of the conservative base that maybe Trump isn’t the big government liberal he used to be on health care anymore, which maybe nets him about 0.05 percent in any state in the nation in the 2020 election under the best case scenario and b) take the heat off Congress to repeal Obamacare or, if they can’t do that, at least make it slightly less noxious while c) ensuring that Republicans still get trashed as the nasty, mean people who want to ensure your kid’s asthma isn’t covered and you have less money in your bank account because hey, prescription drugs are pricey.

In other words, well-intentioned as this lawsuit may be, don’t get too excited about it. It may just be a scam being perpetrated on Attorneys General desperate to respond to constituents who hate Obamacare and want it gone, but who frankly haven’t looked as closely as they should at the merits or likelihood of success, and who are being emboldened by a single judge.

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