ACA Legal Attack Seen as Gift From Trump to Democrats

"I didn't vote for the health care bill," he said. "I didn't vote for the tax bill."

Republican Sen. Susan Collins of Maine, who voted for the tax bill after getting promises from Majority Leader Mitch McConnell on health care, attacked the Justice Department's action in a statement, saying it "could ultimately result in higher costs for millions of Americans and undermine essential protections for people with preexisting conditions, such as asthma, cancer, heart disease, arthritis and diabetes."

She urged both parties to work together to improve health markets instead.

Constitutional Question

But Obamacare foes and Trump loyalists supported the administration's position.

"I still believe the ACA was unconstitutional in many aspects and passing under the auspices of the tax argument was not proper," said Chris Collins, who represents a solidly Republican district in Upstate New York.

Jesse Hunt, a spokesman for the House GOP campaign arm, wouldn't comment on the administration's decision, but blamed Democrats for disrupting health care markets.

"Democrats destroyed the health care system as we knew when they rammed Obamacare down our throats," Hunt said.

Insurers have faced risks tied to the Trump administration's efforts to undermine the Affordable Care Act since his election. Health insurance costs already are rising, and recent reports by the nonpartisan Congressional Budget Office say two actions by Republicans have fueled the rises: the GOP tax law's elimination of the individual mandate, which allows healthy people to drop coverage without a penalty and thus leading to a costlier risk pool, and Trump's decision to cut off "cost-sharing" payments to insurers who take on sicker patients.

It will likely take years for the case to wend its way through the courts, meaning the uncertainty could linger over insurers for some time, according to Spencer Perlman, an analyst at Veda Partners. If the court ends up siding with the Trump administration and the Republican states that brought the suit, the consequences would be significant, Perlman said.

"The decision would cut out the heart of the ACA and completely rewire the health insurance markets," he said. "In practice, this likely would exclude from the commercial health insurance markets individuals with preexisting conditions, individuals with illnesses that are expensive to treat, and many individuals over the age of 50 or 55."

Jonathan Adler, a law professor at Case Western Reserve University and an architect of a lawsuit that came within two Supreme Court votes of gravely damaging the ACA in 2014, said the current legal effort supported by the administration probably won't succeed.

"What the states are really trying to do is bootstrap a claim against other parts of the law, and there's absolutely no basis for this," Adler said in an email. "Congress in 2010 may have thought that a mandate may have been an essential component of the ACA, but a subsequent Congress indicated otherwise by eliminating the penalty without altering the other parts of the law. This is why the states' arguments about severability (and that accepted by DOJ) is wrong."

—With assistance from Anna Edgerton, Arit John, Zachary Tracer and Steven T. Dennis.

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