Patient groups are taking the Trump administration’s new regulations expanding short-term insurance to court.
In a new lawsuit filed Friday in federal court, they argue that those rules are so contrary to the purpose of the Affordable Care Act that they must be blocked under the law that governs federal regulations.
The groups — including the National Alliance on Mental Illness, Mental Health America, and the Association for Community Affiliated Plans — said that the recent expansion of those short-term plans, which do not have to comply with Obamacare’s provisions protecting preexisting conditions, was “contrary to law, and is arbitrary and capricious.”
They argue that the Trump administration’s regulations therefore violate the Administrative Procedure Act (APA), which bars federal rules from being arbitrary or capricious.
”The Departments’ justifications for this rule are directly contrary to the congressional determinations embodied in the text and structure of the ACA,” their lawsuit alleges. “If the rule is permitted to stand, it will thwart rather than further Congress’s objectives in enacting that law.”
I asked Yale Law’s Abbe Gluck and Case Western’s Jonathan Adler about the lawsuit. Adler said that, while he was still reviewing the particulars of the legal argument, the litigation appeared to have merit. Gluck said she thought the plaintiffs’ complaint made “a compelling argument.”
At its core, the legal theory is strikingly simple: Congress passed Obamacare to ensure that people with preexisting conditions could afford health insurance and that all essential benefits would be covered by a person’s insurance plan.
Short-term insurance, which can deny people with preexisting conditions coverage and is not required to cover many routine services, is contrary to both of those objectives. Instead, the regulations should be read as part of Trump’s self-stated goal to destroy the ACA, the groups assert.
”Like any law, the ACA can be repealed by act of Congress. But Congress has repeatedly rejected attempts to repeal the ACA,” the lawsuit states. “Now, with the issuance of the [short-term] Rule, the Departments seek to do by executive fiat what could not be accomplished through the required constitutional process.”
They cite the Trump administration’s own projections that premiums will increase in the Obamacare markets as a result of expanding short-term plans. They also point to anecdotes about people who had a short-term plan only to discover in a medical emergency that their care wouldn’t be covered.
They take particular issue with the Trump administration’s definition of “short-term” as 364 days (“99.7% as long as marketplace plans is contrary to the plain meaning of the phrase ‘short-term’ and to the structure of the ACA”) and “limited duration” as a plan that can be renewed for three years.
”The Departments’ interpretation of ‘limited-duration’ as encompassing plans that can be renewed for a total of 36 months is not consistent with the text or structure of the Affordable Care Act,” the plaintiffs argue.
The patient groups also allege the Trump administration made some technical violations of the APA during the notice-and-public-comment period that is required by the federal law for all newly issued regulations.
The litigation expands the legal battleground over the ACA. A Texas federal judge sounded receptive last week to arguments that the law is now unconstitutional after the individual mandate was repealed. Democratic state attorneys general have filed a separate suit asking for an injunction to uphold the law.
Now Obamacare’s defenders are advancing the case that, in sabotaging the health care law, the Trump administration is acting unlawfully.
This story appears in VoxCare, a newsletter from Vox on the latest twists and turns in America’s health care debate. Sign up to get VoxCare in your inbox along with more health care stats and news.
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