Judge John Bates of the US District Court in the District of Columbia rejected a Labor Department rule that made it easier for small businesses and some self-employed folks to band together based on their industry or location and buy health insurance. The rule, finalized last June, stems from an executive order President Donald Trump issued in the fall of 2017 after congressional efforts to repeal Obamacare fell apart.
The ruling comes amid a whirlwind week for the Trump administration and its efforts to tear down Obamacare. On Monday, the Justice Department said the entire Affordable Care Act should be struck down in a filing with a federal appeals court, a dramatic reversal of a stance it took last year. And on Wednesday, a federal district court judge blocked the administration's efforts to allow states to impose work requirements on Medicaid recipients. Trump now says that his administration will roll out a new health care plan this year.
In the most recent case, attorneys general in 11 states and the District of Columbia filed a lawsuit, arguing that the rule violates both the Affordable Care Act and the Employee Retirement Income Security Act, which governs employer plans.
"This court victory proves again that just because President Trump doesn't like the Affordable Care Act, his administration cannot get away with illegal maneuvers to ignore the law," said Pennsylvania Attorney General Josh Shapiro, one of the officials who brought the suit.
The judge agreed, saying the rule expanded so-called association health plans in a way that allows participants to avoid certain Obamacare regulations.
"The final rule is clearly an end-run around the ACA," Bates said in his decision. "Indeed, as the President directed, and the Secretary of Labor confirmed, the final rule was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA."
The Labor Department referred a request for comment to the Justice Department, which said it disagrees with the court ruling and is considering "all available options."
"The administration will continue to fight for sole proprietors and small businesses so that they can have the freedom to band together to obtain more affordable, quality healthcare coverage," a Justice Department spokesman said. "The Association Health Plan rule opened healthcare options for dozens of associations representing thousands of small businesses and sole proprietors and provided them with access to the same type of affordable healthcare options offered by other employers."
Nearly three dozen new association health plans were launched recently, mainly by chambers of commerce, according to a January study by AssociationHealthPlans.com, an informational website. The ruling will harm small businesses, said Kev Coleman, the site's founder.
"They have provided a means by which broad benefits may be accessed at more economical prices," Coleman said.
After Republican lawmakers failed to dismantle Obamacare in 2017, the Trump administration took matters into its own hands. It has been issuing a series of rules and guidance that aim to undercut the landmark health reform law.
In addition to expanding association health plans, the administration also made it easier to buy short-term plans, which also don't have to adhere to all of Obamacare's rules. Officials have also sought to allow states to make changes to the law in their states, including imposing work requirements on those who gained coverage through the Affordable Care Act's Medicaid expansion provision.
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