Texas is going to court to end Obamacare -- but it hasn't produced a plan to replace it

During a legislative session focused on schools and taxes, Texas lawmakers did little to prepare for the possibility that Obamacare will be struck down in its entirety — even as the state leads the charge to have the law declared unconstitutional.

Last year, after a federal judge in Texas declared the entirety of the Affordable Care Act unconstitutional, throwing into question millions of Americans’ health coverage, the state’s Republican leaders promised they would come up with a plan to replace it.

But on Tuesday, after a legislative session that seemed to have no room for issues other than property tax reform and school finance, Texas will ask a federal appeals court in New Orleans to end the law in its entirety — without offering a replacement plan.

The conservative crusade against portions of the act, known as Obamacare, has spanned a decade. But Texas’ latest lawsuit, filed in February 2018, became an existential threat to the law after U.S. District Judge Reed O’Connor ruled in December that it is unconstitutional in its entirety. At stake: the subsidized health coverage of roughly 1 million Texans, sweeping protections for patients with preexisting conditions, young adults staying on their parents’ insurance plans until age 26 and a host of low-cost benefits available to all people with health insurance, including those covered through their employers.

Texas already has the highest uninsured rate in the nation.

In a highly unusual — if not entirely surprising — move, the U.S. Department of Justice has declined to defend the federal law, leaving a California-led coalition of blue states to protect it. As the case proceeds, Obamacare has remained in place, and likely will until the litigation is finally resolved.

Attorneys for the state of Texas argue the health law cannot stand since the Republican-led Congress in 2017 zeroed out Obamacare’s individual mandate — a penalty imposed on people who chose to remain uninsured. Democrats had favored the penalty as a way to induce more people to purchase health insurance, with the goal of reaching near-universal coverage. Without it, Texas argues, the whole law must fall.

But the state’s Republican leaders have offered few ideas about what should replace Obamacare, a law that touches practically every aspect of health care regulations and includes several popular protections for patients. Gov. Greg Abbott — a vocal critic of the law — pledged in December that if the law remained struck down on appeal, “Texas will be ready with replacement health care insurance that includes coverage for pre-existing conditions.”

Since then, he’s been quiet on the issue, including during this year’s 140-day Texas legislative session. Abbott did not respond to questions for this story.

A three-judge panel on the U.S. 5th Circuit Court of Appeals will hear arguments on the case Tuesday afternoon and then rule in the coming weeks on whether the law should stand.

One bill that did emerge from the legislative session would allow the Texas Department of Insurance to reestablish a high-risk health insurance pool for individuals with severe health problems. That pool, an expensive option for sick patients that was phased out under Obamacare, only insured about 28,000 people at its peak, experts said — a tiny fraction of the Texans poised to lose coverage if Obamacare is struck down.

State Sen. Kelly Hancock, R-North Richland Hills, the bill’s author, said it will provide “a stopgap measure until we reconvene.”

“You establish something until we gather back together, and we collectively, as a body, determine what the best path forward is,” Hancock said.

It would be up to the governor to call a special legislative session to pass a more robust plan. If he does not, the Legislature next meets in January 2021.

Reestablishing the high-risk pool in the absence of Obamacare would be like applying “a tiny Band-Aid” to a gaping wound, said Stacey Pogue, a health policy expert with the left-leaning Center for Public Policy Priorities.

This year, the Legislature did nothing to expand health coverage under existing law or propose alternatives to Obamacare, Pogue said.

“No plan, no bill passed,” Pogue said. “Not only did the Legislature not do anything to improve our miserable uninsured rate, this lawsuit would uniquely make it skyrocket.”

Total abolition of the law is one possible outcome from this week’s litigation. But legal experts across the ideological spectrum agree that Texas has a high bar to clear before Obamacare would be struck down.

For the lawsuit to proceed at all, both sides will have to convince a three-judge panel that they have standing to sue. That’s not a given; the court recently asked for additional information on that issue.