ObamaCare under fire: Lawsuit, tax repeals and ‘Medicare-for-all’ push leave ACA fate unclear

Nearly 10 years after its signing by then-President Barack Obama, the long-term fate of his signature health care law is still murky amid a quick succession of challenges -- from the courts, the White House and the 2020 Democratic primary field.

ObamaCare, passed in 2010, was brought back into the spotlight last week when a federal appeals court upheld a lower court ruling that its individual mandate -- requiring most Americans to purchase health insurance or face a tax penalty -- was unconstitutional,  while leaving other aspects of the law in limbo.

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The mandate was the same provision at the heart of an initial challenge that was foiled in 2012 when Supreme Court Chief Justice John Roberts said the law could be considered constitutional under the government's power to tax.

But since Congress decided in 2017 to repeal the mandate penalty, effective this year, a Republican-led suit has argued the law must fall now that the mandate is gone. The appeals court, while calling the mandate unconstitutional, sent the case back to the lower court to more closely examine whether other parts of the Affordable Care Act can stand -- in legal parlance, whether they can be "severed" from the mandate.

"Having concluded that the individual mandate is unconstitutional, we must next determine whether, or how much of, the rest of the ACA is severable from that constitutional defect. On this question, we remand to the district court to undertake two tasks: to explain with more precision what provisions of the post-2017 ACA are indeed inseverable from the individual mandate; and to consider the federal defendants’ newly-suggested relief of enjoining the enforcement only of those provisions that injure the plaintiffs or declaring the Act unconstitutional only as to the plaintiff states and the two individual plaintiffs," the opinion said.

The ruling added, "It may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded. It may be that all of the ACA is severable from the individual mandate. It may also be that some of the ACA is severable from the individual mandate, and some is not."

With that guidance, the court essentially left open the question of whether the law in its entirety could be threatened by the removal of the mandate penalty.

The suit in question was filed by Texas and 18 other Republican-led states, prompting a defense by Democrats and the House of Representatives. That fight has been simmering away in 2019 but could come to the boil in 2020 amid a grueling presidential election fight where health care already is one of the top kitchen-table issues being debated.

Meanwhile, while an effort by the White House and Republican allies to repeal-and-replace ObamaCare in 2017 failed in the Senate, Washington has been chipping away at key parts of the law ever since.

Included in a massive spending bill approved on a bipartisan vote last week was a repeal of three ObamaCare taxes. This included the so-called "Cadillac tax," a 40 percent tax on high-cost employer-based medical plans; the medical device tax, imposed on equipment such as X-ray machines; and an annual fee on health insurance providers.

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While gutting the taxes is politically popular, it raises further questions about how the law is being paid for.

An analysis by the Joint Committee on Taxation found that the repeal of taxes connected to ObamaCare blows a $373.3 billion hole over 10 years in the nation’s finances. However, with neither party acting particularly hawkish on the question of the budget, it remains to be seen if this will be raised as a political priority.

Perhaps more significantly, some Democrats have been steadily distancing themselves from the law as the left flank of the party embraces calls for a single-payer, "Medicare-for-all" -- and this divide has essentially defined the battle between progressives and moderates in the presidential primary race.

Those proposing a rapid expansion of “Medicare-for-all” generally see ObamaCare as a good first step, but a mere building block toward a government-run system. While ObamaCare essentially relies on a combination of Medicaid and subsidized private insurance to expand coverage, "Medicare-for-all" would go much further -- relegating the private insurance industry to a marginal role.

Sens. Bernie Sanders and Elizabeth Warren are among the presidential candidates backing such a policy. Rep. Alexandria Ocasio-Cortez, D-N.Y., who has emerged as a de facto thought leader for the party’s left flank, even recently vented about the ACA sign-up process -- illustrating how the liberal bloc no longer treats ObamaCare as the gold standard in health care.

“This is absurd,” she complained on Twitter. “No person should go without healthcare, &no one should go through this, either.”

Yet candidates like former Vice President Joe Biden, who famously called the signing of the ACA a "big f---ing deal" while by Obama's side, have defended the law and argued for improvements rather than a wholesale replacement.

“I understand the appeal to Medicare-for-All. But folks supporting it should be clear that it means getting rid of Obamacare. And I’m not for that,” Biden said over the summer. “I was very proud the day I stood there with Barack Obama and he signed that legislation.”

President Trump, meanwhile, has promised that the recent appeals court ruling “will not alter the current healthcare system” while at the same time promising his administration would work to provide “access to high-quality healthcare at a price you can afford, while strongly protecting those with pre-existing conditions.”

Fox News' Bill Mears, Alex Pappas, Andrew O'Reilly and The Associated Press contributed to this report.