Yesterday, two Republican-appointed judges in the Fifth Circuit sided with Affordable Care Act (ACA) opponents and a widely-panned legal argument in Texas v. United States. The court ruled that the Affordable Care Act’s current $0 individual mandate was unconstitutional, remanding the case back to an anti-ACA district court judge—who already tried to throw out the entire ACA—to piece through the law and determine which parts of law should still stand without the mandate.
In other words, while the ruling did not immediately overturn the ACA, the health care of millions of Americans remains in jeopardy. The politically motivated lawsuit could have devastating consequences: people with preexisting conditions may no longer be protected, 20 million people could lose health insurance, millions could see their premiums increase, and the country’s health care system could be left in chaos.
After Obamacare opponents failed to repeal the law in 2017, they tried a new tactic: a lawsuit claiming that when Congress passed the Trump tax cuts and lowered the tax penalty in the individual mandate (the ACA provision requiring individuals to purchase insurance) to zero, it made the provision, previously upheld by the U.S. Supreme Court as a constitutional tax, no longer a tax and thus unconstitutional. This argument has many problems, including one on which even conservative legal scholars agree: Why would anyone have standing to bring such a claim? In other words, what harm could an individual claim from such a provision remaining in statute, given that there is no penalty for not complying?
But opponents’ arguments go further, claiming that the individual mandate is not severable from the rest of the ACA, and so the entire law (expanded Medicaid coverage, preexisting condition discrimination protections, tax credits to purchase coverage, prescription drug coverage for seniors, free preventive care, and much more) must fall—an argument that ignores the fact that when Congress passed the tax cut law reducing the tax penalty for the mandate to zero, it specifically chose to leave the mandate provision, and the ACA, standing. In fact, the Congress that passed the tax law was the exact same Congress which earlier that year had already debated whether to overturn the ACA and ultimately decided not to do so.
Meanwhile, the U.S. Department of Justice took the highly unusual position of declining to defend the law; in fact, the Department of Justice initially picked out provisions that they claimed would have to fall along with the mandate, including the protection from discrimination against people with preexisting conditions, but switched positions partway through the case to agree that most of the law should fall. Legal scholars and policymakers from the right and left alike have criticized the Department of Justice’s position and the underlying case.
However, the plaintiffs—conservative state attorneys general and two Texans claiming harm from a zero-dollar mandate bringing the suit—went forum shopping to find a judge with a history of anti-ACA rulings at the district level, and in whose court they won last December. Because the Department of Justice has refused to defend the law, Democratic attorneys general and, later, the House of Representatives intervened, and brought an appeal to the Fifth Circuit Court of Appeals. This summer, the panel of three judges heard oral arguments; they released their ruling yesterday.
The Fifth Circuit Decision and Next Steps
The majority in the federal appeals court (two Republican-appointed judges) made a highly questionable finding that the plaintiffs do have standing, and that the unenforceable mandate was unconstitutional—but that the district court should take a deeper look at (a) the intent of Congress in 2017 in keeping the rest of the ACA when determining whether the mandate is severable, and (b) each provision of the law, explaining its reasons why each one is not severable. In other words, after striking down the mandate, they punted the case back to a go-to conservative judge who has already shown his cards on the matter.
If Judge Reed O’Connor, the district judge, gives the intent of the Congress in 2017 the analysis he should, the answer is clear and stated best in the dissent from Judge Carolyn King in the Fifth Circuit ruling: “If Congress viewed the coverage requirement as so essential to the rest of the ACA that it intended the entire statute to rise and fall with the coverage requirement, it is inconceivable that Congress would have declawed the coverage requirement as it did.”
The punt back down to the conservative district court judge makes a ruling that guts the ACA all but certain.
Unfortunately, no one has high hopes for such a rational, straightforward severability analysis from Judge O’Connor. Instead, the punt back down to the conservative district court judge makes a ruling that guts the ACA all but certain. Such a ruling would again be appealed, presumably (and conveniently, for ACA opponents) pushing the ultimate determination at the Supreme Court well past the 2020 election.
However, there is another procedural unknown. California’s attorney general, Xavier Becerra, a party to the suit given the Trump administration’s unwillingness to defend the law, almost immediately pledged to file cert with the Supreme Court rather than wait for the district to review the case again. While the Supreme Court typically does not take up cases before lower courts have completed their rulings, it only takes four justices to agree to hear a case. In other words, the Supreme Court may decide to hear the case as soon as the first half of next year, which would almost certainly elevate the issue of health care for voters in the 2020 election.
Whatever the timeline, millions of Americans’ health coverage hangs in the balance as a result of yesterday’s ruling.