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Wednesday October 17th, 2018 1:16AM

GOP risks fallout from Justice Department move on health law

By The Associated Press
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WASHINGTON (AP) — The Trump administration's decision to stop defending in court the Obama health law's popular protections for consumers with pre-existing conditions could prove risky for Republicans in the midterm elections — and nudge premiums even higher.

The Justice Department said in a court filing late Thursday that it will no longer defend key parts of the Affordable Care Act, beginning with the unpopular requirement that people carry health insurance, but also including widely-supported provisions that guarantee access for people with medical problems and limit what insurers can charge older, sicker adults.

Friday, the insurance industry warned in stark terms of "harm that would come to millions of Americans" if such protections are struck down, causing premiums "to go even higher for older Americans and sicker patients."

Weighing in on a Texas challenge to the health law, the Justice Department argued that legally and practically the popular consumer protections cannot be separated from the unpopular insurance mandate, which Congress has repealed, effective next year.

That argument is likely to be lost on consumers, said Robert Blendon, a polling expert at the Harvard T.H. Chan School of Public Health — particularly in the heat of an election that will determine control of Congress.

"The pre-existing condition thing is what the ads will be run on," said Blendon. "Pre-existing conditions have gotten to be an issue that people walking on the streets understand ... it's very emotional."

Some Democratic politicians didn't waste much time.

"Democrats will not allow Republicans to get away with quietly trying to strip away pre-existing conditions protections for millions of Americans through a legal backdoor," said Rep. Frank Pallone, D-N.J., a spokesman for his party on health care.

Senate Democratic Leader Chuck Schumer of New York urged President Donald Trump to reverse the decision.

Administration officials at the departments of Health and Human Services and Treasury would not comment, instead pointing to the Justice Department filing, which said other parts of the health law would continue to stand, including its Medicaid expansion covering about 12 million low-income people. HHS and Treasury administer the health law's coverage and subsidies.

Loosening the health law's rules on pre-existing conditions and on charging more to older adults is a key goal for the Trump administration. Partly that's because those consumer protections also raise premiums across the board, as the cost of covering the sick is spread among all customers, including healthier people who previously benefited from lower rates.

Indeed, people who pay the full cost of their individual health plans and aren't eligible for subsidies under the health law have been clamoring for relief from several years of double-digit premium increases.

Economist Gail Wilensky, who's advised Republicans, said she's not sure about the timing of the administration's action.

"You can definitely assume Democrats will use it to whip up their side," said Wilensky, administrator of Medicare under former President George H.W. Bush. "For the people not affected by the ACA, or not particularly supportive, I don't know that it will matter much."

The issues in the court case are unlikely to be resolved quickly, but some experts said the added uncertainty could prompt insurers to seek higher premiums in 2019 for health plans sold to individuals.

"Insurance companies hate uncertainty, and when they face uncertainty they tend to increase premiums and hedge their bets," said Larry Levitt of the nonpartisan Kaiser Family Foundation.

America's Health Insurance Plans, the main industry trade group, bemoaned the Justice Department's stance, saying it could upset a market that is becoming "more steady" for most consumers.

"Zeroing out the individual mandate penalty should not result in striking important consumer protections," the group said. 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.

The lawsuit, filed in February by Texas and other GOP-led states, is in many ways a replay of the politically divided litigation that ended with the Supreme Court upholding the health care overhaul in 2012. In this case, California is leading a group of Democrat-led states in defending the law.

The Trump administration's stance is a rare departure from the Justice Department's practice of defending federal laws in court.

Attorney General Jeff Sessions said in a letter to Congress that Trump, who campaigned on repealing the law and nearly did so his first year in office, approved the legal strategy.

Donald Verrilli Jr., President Barack Obama's top Supreme Court lawyer who defended the law, called the decision "a sad moment."

"I find it impossible to believe that the many talented lawyers at the department could not come up with any arguments to defend the ACA's insurance market reforms, which have made such a difference to millions of Americans," Verrilli said.

Shortly before the government's court filing Thursday, three career lawyers at the Justice Department withdrew from the case and were replaced by two political appointees, according to court filings.

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Associated Press writer Mark Sherman contributed to this report.

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