NEW ORLEANS — A panel of federal appeals court judges on Tuesday sounded likely to uphold a lower-court ruling that a central provision of the Affordable Care Act — the requirement that most people have health insurance — is unconstitutional. But it was harder to discern how the court might come down on a much bigger question: whether the rest of the sprawling health law must fall if the insurance mandate does.
In 90 minutes of oral arguments on whether a federal district judge in Texas was correct in striking down the Affordable Care Act in December, two appellate judges appointed by Republican presidents peppered lawyers with blunt questions while the third judge, appointed by President Jimmy Carter, remained silent.
The two Republican appointees, Jennifer Walker Elrod, appointed by President George W. Bush in 2007, and Kurt Engelhardt, appointed by President Trump in 2018, seemed particularly skeptical of the Democratic defendants’ argument that Congress had fully intended to keep the rest of the law when it eliminated the penalty for going without insurance as part of its 2017 tax overhaul.
The arguments in the United States Court of Appeals for the Fifth Circuit were a stark reminder of the enormous stakes of the case, not only for millions of people who gained health insurance through the law but for the political futures of Mr. Trump and other candidates in the 2020 elections.
The case, which could make its way to the Supreme Court ahead of those elections, threatens insurance protections for people with pre-existing medical conditions and many other sweeping changes the 2010 law has made throughout the health care system.
It was filed by a group of Republican governors and attorneys general against the federal government, which carries out the law. But the Trump administration refused to defend the full law in court, initially saying only its provisions protecting people with pre-existing conditions should be struck down. Then, this spring, it said it agreed with the ruling that the law’s requirement for people to buy insurance was unconstitutional now that Congress eliminated the penalty for going without it, and that as a result, the entire law must be dismantled.
That has left a group of 21 states with Democratic attorneys general to intervene to defend the law, along with the House of Representatives, which entered the case after Democrats won control of the chamber last fall.
A question at the heart of the case that was much discussed during Tuesday’s arguments is whether the Affordable Care Act’s mandate requiring most Americans to buy health insurance or pay a tax penalty remained constitutional after Congress eliminated the penalty. When the Supreme Court upheld the mandate in its landmark 2012 ruling that saved the law, its decision was based on Congress’s power to impose taxes.
If the mandate is indeed unconstitutional, the next question is whether the rest of the Affordable Care Act can function without it. In December, Judge Reed O’Connor of the Federal District Court in Fort Worth said it could not and declared that the entire law must fall.
On Tuesday, Douglas N. Letter, a lawyer for the House of Representatives, was particularly insistent that Judge O’Connor had been wrong, telling the appeals panel that “the burden is on the other side to show Congress wanted this entire statute to be struck down.”
The arguments did reveal some tensions between the Republican states that brought the case, led by Texas, and Mr. Trump’s Justice Department. For example, a lawyer for Texas took issue with a puzzling new Justice Department position — revealed in a May brief — that the ruling should apply only in the 18 plaintiff states, not nationwide. The Republican states would need to evaluate if they had “been the victim of a bait and switch,” said the Texas lawyer, Kyle D. Hawkins.
In another wrinkle, August E. Flentje, a lawyer for the Justice Department, appeared reluctant to answer questions from Judge Elrod about how applying the ruling only to the plaintiff states would work. He was also vague about another new and surprising position the administration mentioned almost in passing in its May brief: that some pieces of the health law, though not its insurance provisions, should be preserved.
“A lot needs to get sorted out and it’s complicated,” Mr. Flentje replied.
Judge Elrod also asked how the federal government would respond if a stay issued by the lower court after Judge O’Connor’s decision was lifted and its order striking down the law took effect.
“We think it’s great the stay is in place,” Mr. Flentje said. “Those things don’t need to get sorted out until there’s a final ruling.”
Over all, though, the panel spent the most time on the question of whether the rest of the law should fall if Judge O’Connor was correct in scrapping the insurance mandate — and Judge Elrod and Judge Engelhardt, based on their questioning, seemed to firmly believe he was. Judge Engelhardt asked Mr. Letter, the House lawyer, why Congress could not remedy the situation by writing a new health law or set of laws.
“They could do this tomorrow,” Judge Engelhardt said, leading Mr. Letter to dryly point out that Mr. Trump would need to sign off on new laws, too.
“And obviously the president would sign this, right?” he asked sardonically. “No, obviously not.”
“You can fix this, and the Supreme Court has told you how to do it,” Mr. Letter told the panel, referring to legal precedent that directs courts to limit damage to major statutes when considering which provisions to throw out. “Maintain everything you can that can stand on its own.”
But Judge Engelhardt and Judge Elrod kept referring to past statements, including from Supreme Court justices in an earlier case questioning the constitutionality of the health law, King v. Burwell, suggesting that the law’s other insurance provisions cannot work without the mandate. Those provisions include one that requires insurance companies to sell health coverage to anyone who wants to buy it, including people with pre-existing medical conditions, and another that requires the companies to charge the same price to everyone who is the same age.
Judge Engelhardt twice asked Mr. Letter why, if Congress fully intended to keep the rest of the health law when it eliminated the penalty for going without insurance in 2017, the Senate, which is controlled by Republicans, had not also sent a lawyer to make that case.
“Why would the Senate not also be here to say, ‘Oh, this is what we meant when we wrote this?’” he asked. “They’re sort of the 800-pound gorilla that’s not in the room.”
The appeals panel also spent a good chunk of the allotted 90 minutes asking questions on a third topic: whether the Democratic states and House of Representatives even have standing to appeal Judge O’Connor’s ruling.
To establish standing, a party has to show it has suffered a concrete injury that a ruling in its favor would redress. Samuel P. Siegel, a lawyer for California, told the appeals panel that throwing out the law would clearly injure the defendant states because they would lose hundreds of billions of dollars in federal funds they have received through the expansion of Medicaid and other provisions.
The court had also asked the parties in a letter last month what the appropriate conclusion of the case should be if the Justice Department, by no longer defending any part of the law, has “mooted the controversy.” But it barely addressed that question on Tuesday.
If the appeals court ultimately decides that neither the House nor the intervening Democratic states have standing, it could either let Judge O’Connor’s ruling stand or vacate it. In any event, the losing party will almost certainly appeal to the Supreme Court.
“All of this is going to be playing out against the backdrop of the 2020 presidential election,” said Nicholas Bagley, a law professor at the University of Michigan. He was among a bipartisan group of professors who argued in an amicus brief last year that the rest of the law should survive even if its mandate to buy insurance was found unconstitutional, and who have criticized the plaintiffs’ case as weak.
Democrats are already running ads against Mr. Trump and other Republicans over the case, including five state attorneys general who signed on as plaintiffs and will be up for re-election next fall. Protect Our Care, an advocacy group that supports the law, will start running digital ads this week against Republican senators considered vulnerable next year: Thom Tillis of North Carolina, Joni Ernst of Iowa, Cory Gardner of Colorado and Martha McSally of Arizona.
“The case, if successful, would result in a humanitarian catastrophe in this country,” Senator Chris Murphy, Democrat of Connecticut, said on the Senate floor on Tuesday. “Because the plaintiffs in the case, backed by the Trump administration, are arguing that the court should throw out the entire Affordable Care Act with nothing to replace it.”
The appeals court could take months to decide, but the Trump administration has said it will continue to enforce the many provisions of the law until a final ruling is issued — a position about which Judge Elrod expressed curiosity.
“It’s a choice, right?” she said to Mr. Flentje, the Justice Department lawyer, asking why the administration would keep the law afloat even after it had changed its position and agreed it was fully unconstitutional.
If the appeals judges uphold Judge O’Connor’s decision, the number of uninsured people in America would increase by almost 20 million, or 65 percent, according to the Urban Institute, a left-leaning research organization. That includes millions who gained coverage through the law’s expansion of Medicaid, and millions more who receive subsidized private insurance through the law’s online marketplaces.
Insurers would also no longer have to cover young adults under their parents’ plans up to age 26; annual and lifetime limits on coverage would again be permitted; and there would be no cap on out-of-pocket medical costs people have to pay.
Also gone would be the law’s popular protections for people with pre-existing conditions, which became a major talking point in last fall’s midterm elections, as Democratic candidates constantly reminded voters that congressional Republicans had tried to repeal the law in 2017.
Without those protections, insurers could return to denying coverage to such people or to charging them more. They could also return to charging people more based on their age, gender or profession.
The Kaiser Family Foundation, a nonpartisan research organization, has estimated that 52 million adults from 18 to 64, or 27 percent of that population, would be rejected for individual market coverage under the practices that were in effect in most states before the Affordable Care Act.
Jan Hoffman contributed reporting.