By Tamara Mathias

(Reuters) – Removing certain provisions tied to the Affordable Care Act, former U.S. President Barack Obama’s signature healthcare law, could strike out important consumer protections and potentially harm millions of Americans, a trade association that represents U.S. health insurers said on Friday.

The comments from America’s Health Insurance Plans (AHIP) come a day after the U.S. Justice Department called Obamacare’s individual mandate – which requires individuals to have health insurance or pay a penalty – unconstitutional.

The mandate introduced with Obamacare, the popular name for the Affordable Care Act (ACA), was meant to ensure a viable health insurance market by forcing younger and healthier Americans to buy coverage. Last year, Congress repealed the tax associated with the penalty, effective 2019.

The Justice Department also said on Thursday two other major provisions of Obamacare linked to the individual mandate are nullified, including one barring insurance companies from denying coverage to people with pre-existing conditions.

“Zeroing out the individual mandate penalty should not result in striking important consumer protections, such as guaranteed issue and community rating rules, that help those with pre-existing conditions,” AHIP said in a statement.

Removing consumer friendly provisions like guaranteed issue, whereby health insurers cannot deny coverage to applicants or charge more based on health status, will result in renewed uncertainty in the market as well as push up rates for older and sicker patients, AHIP added.

A group of 20 U.S. states sued the federal government in February, claiming the law was no longer constitutional after last year’s repeal of that penalty that individuals had to pay for not having insurance.

Although AHIP is not named in the case, it said it plans to file an amicus brief as a concerned party to provide details about the potential harm that would come to millions of Americans if the request to invalidate the ACA is granted in whole or in part.

“A declaratory judgment would have the same destabilizing effect as a preliminary injunction, and therefore should not be granted,” AHIP added.

(Reporting by Tamara Mathias in Bengaluru; Editing by Anil D’Silva)