Nate Jackson / June 8, 2018

Trump vs. Obama’s Legacy, Again

The DOJ has dropped its defense of ObamaCare and is even backing plaintiff states.

In 2011, Barack Obama’s Social Justice Department decided it would no longer defend Bill Clinton’s Defense of Marriage Act. It was the beginning of the end at the federal level for traditional marriage, and leftists rejoiced. They’re singing a different tune now that Donald Trump’s Justice Department has not only dropped the defense of ObamaCare but requested that a court strike down key regulations.

Led by Texas and Wisconsin, 20 states filed suit arguing that without the tax penalty for remaining uninsured, the individual mandate is unconstitutional. We’d still argue that it’s unconstitutional with or without the tax, but Chief Justice John Roberts rewrote that part of the law in order to save it. Ironically, ruling that the penalty was actually a tax enabled Republicans to undo that tax via their tax reform bill — effective Jan. 1, 2019 — and that undoing is now the basis of the lawsuit.

Reason’s Peter Suderman explains, “The tax reform law passed by Republicans in Congress eliminated that tax penalty, setting it to zero as of 2019. Technically, the mandate remains on the books, but functionally the tax law repealed it. Since the mandate no longer raises any revenue, the states’ argument goes, the saving construction — that is, the notion that it is legal if understood as a tax — no longer applies. And since the mandate is the lynchpin of the entire law, the glue that holds the entire scheme together, all of Obamacare must be struck down with it.”

The DOJ sided with the states in part, arguing that the individual mandate should be struck down, along with two other related ObamaCare provisions — the mandate that insurers cover preexisting conditions and the prohibition on charging more for insurance based on higher health risk. Both regulations result in everyone paying far more for insurance, but they are tied to the individual mandate because insurance companies lobbied for a larger pool of younger, healthier customers to balance the increased cost of covering older, sicker people.

The Justice Department’s move leaves defending the law to a coalition of blue states led by California. Unfortunately, the defense is likely to prevail for two reasons: First, the plaintiff states have little standing to claim harm when the mandate penalty is $0. Second, Congress has already effectively severed the mandate from the rest of ObamaCare, undermining the case of states seeking to strike down the whole law. The administration surely wants to avoid a legal challenge to the tax law, which may explain why the DOJ isn’t fully backing the plaintiff states.

In any case, Democrats are making Republican “sabotage” of ObamaCare a major issue for the November elections. But Democrats passed the unconstitutional law without a single Republican vote, and they still own its devastating economic consequences.

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