In a brief filed in a federal court in Texas, the department said a tax law signed past year by President Donald Trump that eliminated penalties for not having health insurance rendered the so-called individual mandate under Obamacare unconstitutional.
Late Thursday, the department said the health law's requirement that most Americans carry insurance will become unconstitutional next year and so will consumer protections forbidding insurers to deny coverage to sick customers or charge them more.
A Trump administration decision not to defend key parts of the Affordable Care Act in a lawsuit seeking to dismantle it could cause chaos and deprive Americans of coverage, local politicians, providers and insurers said on Friday.
And Tim Hogan, a spokesman for Health Care Voters, a Democratic group looking to mobilize voters on the health care issue, called the decision a "blatant sabotage of the Affordable Care Act" and "something Republican members of Congress will have to explain to their constituents".
In Virginia's 2017 elections, for instance, exit polls showed health care far and away the most important issue for voters, and those who said it was their top issue picked Democrat Ralph Northam over Republican Ed Gillespie in the governor's race by a margin of 77-22 percent.
"You can't pull the rug out from underneath people with pre-existing conditions", O'Donnell said. However, he said, Bailey opposes the individual mandate and wants less government regulation of health insurance. "Our Constitution requires the executive branch to faithfully execute the laws passed by Congress", they wrote in a statement.
These sections of the law, along with the mandate that insurers provide comprehensive coverage, are the bedrock of Obamacare's protections for those with pre-existing conditions.
The Justice Department does not join the 20 states in the lawsuit in saying that this invalidates the entire law.
The administration's legal stance injects profound uncertainty into the political debate and the health-care landscape at a critical moment, just as insurance companies are developing rates for the coming year and as candidates head into a summer campaign season that both parties will try to use to solidify a foothold for their agendas.
This question of statutory interpretation does not involve the ACA's constitutionality and therefore does not implicate the Department's general practice of defending the constitutionality of federal law.
America's Health Insurance Plans (AHIP), a trade group for health insurers, today put out a statement arguing that eliminating the current underwriting rules for 2019 would lead to major disruption in the individual major medical market.
Before the Trump administration'ss response on Thursday, Democratic Attorneys General filed [JURIST Report] a motion to intervene [text, PDF] in April to defend the ACA anticipating the Trump administration's intention to not uphold the legislation. It said in a brief that the Affordable Care Act's rules barring insurers from denying coverage or charging different rates based on a person's medical history should no longer be enforced because they were created to work alongside the individual mandate.
The state has been at the forefront in resisting many Trump Administration policies, including on health care and immigration. MacArthur worked on legislation to continue pre-existing condition protections during the GOP's unsuccessful effort to repeal Obamacare past year. Conservatives at the time accused the Justice Department of politicization.
If the court takes that action, "the ACA's provisions containing the individual mandate as well as the guaranteed-issue and community-rating requirements will all be invalid beginning on January 1, 2019", the department lawyers write in a memorandum addressed to the court.
Maine Sen. Angus King, an independent who caucuses with the Democrats, slammed the Trump administration on Friday for not defending the ACA in court. It will lead to "renewed uncertainty in the individual market" and a "patchwork of requirements in the states" and make it more challenging to offer coverage next year.
Attorney General Jeff Sessions said in a letter to Congress that Trump, who campaigned on repealing the law and almost did so his first year in office, approved the legal strategy. The administration's argument would also allow insurers to charge women, older people, and people in certain occupations higher premiums.
"I've long held a position that the federal government should get completely out of the health insurance business", he said.
Because the lawsuit could easily go all the way to the U.S. Supreme Court, a process that could take years, the protections for people with preexisting conditions are likely to stay in place during that period.