The Affordable Care Act, which had its tenth anniversary in March, has never been free of some doubt about how long it might last. Almost from the beginning, there were frequent predictions of a “death spiral” setting in, because the huge law with so many inter-locking parts supposedly would collapse on its own. And, from the beginning, Republican leaders had wished for – and plotted — its demise.
It survives, as of now, and is far more popular than in its early years. It is still in operation partly because the law has, indeed, worked as planned. And it survives partly because it has been twice rescued by the Supreme Court, and in part because some 70 attempts by Republicans in Congress to repeal it outright have failed.
Its life is at stake again. President Trump has been determined to get the courts to scuttle the entire 900-page law. Administration lawyers have just renewed that plea, with a filing Thursday night, a legal brief urging the Supreme Court to rule that the law, end to end, is unconstitutional.
The Justices agreed, in early March, to review the law’s validity again, but they put off that review until their next term, starting in October. The case does not seem likely to come up for a hearing until after the election in November. (Even if President Trump were to lose the election for the White House, the case presumably would go on, because a group of states with conservative leaders would continue as challengers.)
When the Court does its review, it will not be facing a simple up-or-down vote on the ACA’s constitutionality. The two (combined) cases before it present three separate questions. Somewhat over-simplified, these are the issues: (a) did anyone have a legal right to file a lawsuit challenging the law’s constitutionality; (b) if someone did qualify to sue, is the individual mandate unconstitutional (that’s the provision that most individuals in the U.S. must have health insurance coverage, from their employer or purchased from a health “exchange” or marketplace); and (c) if the mandate is invalid, does the entire ACA fall with it?
Let’s take those three separately, because none of them is simple.
Issue (a) is itself a constitutional question. Under Article III, the Supreme Court and other federal courts can rule on a case only if it raises a “case or controversy.” That means a real legal dispute, not a theoretical or abstract one. To get into federal court, a would-be suing party has to show that there is a live controversy at stake, and that the party has a genuine interest in the outcome and will be experience a specific harm or legal injury if they don’t win the case in court.
A group of states with conservative governments who oppose the ACA, including the individual mandate, along with two individuals who do not want to obtain ACA-style coverage, filed a lawsuit in Fort Worth, Texas, federal court. Both the states and the two individuals claimed they would suffer financially if the individual mandate remained on the books.
But other states who support the ACA, along with the U.S. House of Representatives, joined in the case after the Obama Administration had ended, to make sure that there was someone to continue to defend the law in its entirety. They have argued that the challengers had not proved that they did meet the requirements for filing their lawsuit. The Trump Administration by this time had entered office, and joined in the challenge.
If the Supreme Court were to agree with the supporters that the challenge should not have been allowed in court at all, that would end the case altogether: that is, if there were no right to sue, no decision can be made by a federal court.
Issue (b) is also a constitutional question. In essence, that question comes down to this: did Congress, under Article I of the Constitution, have the authority to enact the individual mandate commanding people to have health insurance?
The Supreme Court, in its first ruling rescuing Obamacare, decided in 2012 that Congress did have the authority to pass the mandate, but only because that provision can be understood as a tax law. While saving the law, the Court did rule explicitly that Congress did not have the power to adopt the mandate under any other constitutional basis for legislating. (The Court’s second rescue of the ACA came in 2015, when it ruled that the subsidies to help people afford health insurance applied nationwide.)
The individual mandate upheld in 2012 imposed a duty on individuals to have health coverages, and it imposed a financial penalty on those who failed to do that. This penalty, the Court majority said, amounts to a tax because it was written into the federal tax code, and it would raise some money for the federal Treasury.
The constitutionality of the mandate is once again before the Court because Congress, three years ago, reduced the penalty for not having insurance to zero. Congress did that while refusing the latest GOP effort to repeal the entire law. The mandate is still there, but individuals will only need to obey it voluntarily; they won’t be penalized if they go without insurance.
The challenging states and two individual challengers leaped on the zeroing-out of the penalty. Their logic was simple: if there is no duty to pay anything, there is no penalty, and thus there is no tax. And, so, since that was the only foundation for the Supreme Court’s 2015 decision, there is no basis for the individual mandate any longer.
Issue (c) then arose; it is not a constitutional issue, in the usual sense. It involves a question of how the courts are to operate when ruling on the validity of a law that has many facets, but only part of the law has been challenged.
Under long-standing Supreme Court precedent, if a part of a federal law is struck down as unconstitutional, that does not mean that the entire law, if it has multiple parts, is also invalid. Courts then decide whether to cut out of the law the invalid part, leaving the rest intact, or, alternatively, decide that the loss of that part infects all of the law and all of it must fall.
How do they make that decision? They apply the doctrine of “severability.” Here is how that works: if a part of a multi-faceted law is struck down as unconstitutional, a court then asks itself: what did Congress intend when it put that part into a larger law? Did it mean that the individual part was so important to the overall measure that it would not have passed any of the law if it had to do without that one part? Or, instead, would it have passed the rest of the law with the aim that it would stand even if the one part failed – in other words, was the invalid part “severable” from the remainder?
If the Supreme Court were to rule that the mandate is invalid and that this takes down with it the entire law, then there would no longer be the most important parts of the law – the ban on denial of insurance for pre-existing medical conditions, and a similar ban on higher insurance premiums based on medical history, lengthy coverage of a family’s children, and the expansion of the Medicaid program for the poor – but also the minor parts of the law, such as the requirement for restaurant menus to show nutritional values of the foods they serve.
There have been estimates that upwards of 23 million Americans would lose their health insurance if the law did come crashing down, and that would happen amid the national health crisis over the virus pandemic. With tens of millions now out of work because of the pandemic, many would lose the health insurance they had with their jobs.
In the case now before the Court, the trial judge in Fort Worth ruled that the individual mandate was unconstitutional without any penalty for failing to have insurance, and separately ruled that the entire law was so interconnected with the vital mandate part that none of it could stand. The judge put that ruling on hold, and it has yet to become final, so Obamacare still stands.
A federal appeals court agreed with the trial judge that the mandate was unconstitutional, without the foundation of being a tax, but it told the Texas judge to take another look at the consequences of that ruling: in other words, it told the judge to make a new review of whether the mandate could be severed, or not.
Without waiting for the case to return to the judge in Fort Worth, both supporters and opponents of the ACA (and of the mandate) took the controversy on to the Supreme Court, and the Justices granted review of both. The states who support the entire ACA and the House of Representatives filed their formal briefs in the cases in May, arguing that what Congress did in 2017 was no more than zeroing-out the penalty, thus choosing to leave every other provision of the massive law still in effect and, they contended, the entire law is capable of operating as intended.
The Trump Administration and the challengers filed their formal legal briefs on Thursday, spelling out more fully their shared view that the mandate is invalid and that the ACA as a whole is invalid as a result.
However, there is a division among the challengers. The opposed states and the two individuals want the Court to strike down the entire law, and then impose an order banning enforcement of any part of the law, anywhere in the nation. The Administration, while agreeing that the entire law should be ruled unconstitutional, suggested that the Court need only block enforcement of those parts of the law that the states and the two individual challengers can show caused a direct injury on them. (It would be up to a lower court to sort that out.)
The Administration has treated its proposal on the remedy as if it were something of a compromise, a less-ambitious use of judicial power than would be a nationwide ban on enforcing any of the ACA. Still, if the Supreme Court were to declare that the entire law is unconstitutional, there would be no chance for any lower courts to refuse a request to invalidate any other part of the law in future cases.
If the presumed Democratic nominee for the president, Joe Biden, were to be elected in November, presumably his new Administration would seek to enter the Supreme Court case (if it had not been decided by January 20) and try to shore up the defense of the ACA’s validity.
Depending upon how the congressional elections came out this Fall, it is conceivable that Congress could step in and rescue the entire ACA by passing a new version or, perhaps, by simply re-imposing a small financial penalty for those who do not obtain insurance. That could make the pending case in the Supreme Court lose any significance.