Administration Supports Only Part of Texas Lawsuit Against the ACA — The Scariest Part

On Wednesday, a Texas judge heard oral arguments in a case brought by state attorneys general against the Affordable Care Act (ACA). The suit aims to overturn the ACA in its entirety on the dubious grounds that since Congress has eliminated the penalty for not having insurance, a key provision of the act, it thereby invalidated the act as a whole.

The Department of Justice, which supports the lawsuit in part, wants to keep the ACA on the books but does support elimination of one key provision — the guarantee that people will get full coverage for pre-existing conditions without paying higher premiums. But that is the scariest part of the lawsuit. As a recent tracking poll from the Kaiser Family Foundation confirms, an overwhelming majority of people support the pre-existing conditions proviso.

There is some cold economic rationality in tying pre-existing conditions protections to the penalty for not having insurance. The link between the two is a phenomenon known in insurance circles as adverse selection. Adverse selection occurs when people with high exposure to risk buy insurance. Since such people are…