The Department of Justice said it agrees with Texas that the so-called individual mandate will be unconstitutional without the fine.
The chances for that argument succeeding are viewed with deep skepticism by legal experts, in part because Congress itself indicated that the rest of ObamaCare could still stand without the mandate when it moved to repeal the tax penalty a year ago.
Bagley, a former Justice Department attorney, said the DOJ has a "durable, longstanding, bipartisan commitment" to defending the laws passed by Congress as long as there is a legitimate "non-frivolous" argument to be made in its defense.
In 2012, the U.S. Supreme Court ruled that the individual mandate - requiring Americans to purchase insurance and exacting a yearly financial penalty from those who don't - was not a constitutional use of the Commerce Clause, but that it was a lawful use of Congress' authority to require taxes.
Removing consumer friendly provisions like guaranteed issue, whereby health insurers can not deny coverage to applicants or charge more based on health status, will result in renewed uncertainty in the market as well as push up rates for older and sicker patients, AHIP added.
Bailey's spokesman Corey Uhden said Friday that he wouldn't comment on the constitutionality of the ACA provisions.
The Democrats further raised concerns that even if the Justice Department's arguments are unsuccessful, the administration's move could still "raise the cost of health care for most Americans, undermine the economy and weaken our democracy for years to come". Nothing yet. The Democratic attorneys general are aggressively defending the ACA and the case probably won't be decided until late summer or fall.
The suit is being heard by Judge Reed O'Connell, who was appointed by President George W. Bush and has ruled against the ACA in other cases the past few years. He said the department only refused to defend the pre-existing conditions provision as well as one forbidding insurers from charging people in the same community different rates based on gender, age, health status or other factors. They are at this moment submitting their rates for the individual market for 2019. "The brief filed by the Trump Administration yesterday represents a shocking break from precedent, and relies on legally dubious, partisan claims to argue against the constitutionality of the current law", they said in a joint statement. How are insurers to prepare for this unknown future? As California's brief demonstrates, the individual responsibility provision is not unconstitutional at this point; it is simply unenforceable.
Reyes said Friday that "the individual mandate can not be severed" from the parts of the Affordable Care Act that prohibit insurers from increasing a person's premium rates or denying them coverage based on their health history.
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.
Moreover, if the Trump administration did not want to defend the ACA expressly, it could simply have filed a jurisdictional motion, asserting that the states are not injured by the lack of an individual mandate penalty and that the litigation is not yet timely, as the tax is still in effect.