In a lawsuit that’s been labeled “absurd” and “ludicrous” by legal experts, conservative and liberal alike, Texas and 19 other conservative states are suing to eliminate the Affordable Care Act (ACA) once and for all, as past Republican efforts failed to do so.
On Wednesday, Federal Judge Reed O’Connor, a wildcard who’s ruled against Obamacare multiple times, will hear oral arguments in a lawsuit brought forward in February. O’Connor is expected to review a preliminary injunction to temporarily block the enforcement of some or all of the ACA in 2019, while the lawsuit is argued in full. He’s expected to issue a decision on the injunction after Wednesday’s hearing, but it’s anyone’s guess whether it will come just before the midterm elections and Obamacare open enrollment in November.
Since Obamacare’s inception, the Supreme Court has heard at least four challenges related to the eight-year-old law, and the fear among its supporters is this lawsuit could finally be the one to kill it. SCOTUS nominee Brett Kavanaugh’s confirmation hearing is also taking place Wednesday, a symbolic reminder that a more conservative Supreme Court will likely decide Obamacare’s fate. That said, Kavanaugh is reportedly a skeptic of this lawsuit.
What are we really fighting about? Lawyers call it severability.
The latest lawsuit (Texas v. United States) takes issue with the constitutionality of the individual mandate, the federal requirement to have insurance or be taxed, as well as the entirety of the ACA.
The 18 Republican state attorneys general and two governors argue that because the Supreme Court upheld the ACA by concluding the individual mandate is a tax in a 2012 lawsuit (NFIB v. Sebelius) and Congress reduced this tax penalty to zero dollars in 2017, the mandate is now unconstitutional.
But the plaintiffs go even further, saying that the ACA in its entirety needs to be struck down because the mandate can’t be severed from any and all of the 2010 law. At the very least, the plaintiffs contend that if the federal judge rules the mandate is unconstitutional, then he should rule that protections for people with pre-existing conditions are unconstitutional as well. The idea is that a mandate is needed to attract enough healthy people to the insurance marketplace to keep protections for the sick.
They also point out that the 111th Congress called the individual mandate essential to Obamacare, as ThinkProgress has argued in the past as well. But the 115th Congress doesn’t appear share that view, repealing it in December 2017, while leaving other parts of the health law in tact — although, in the past, they have tried to get rid of the whole thing.
This is why five health law scholars from different political bents who’ve argued over the merits of Obamacare in the past disagree with the GOP states. They filed a court brief earlier this summer, arguing that O’Connor should find the mandate severable from the rest of the ACA if he decides the mandate is unconstitutional because Congress thinks it is:
[A] court must offer its best guess on what Congress would have wanted for the rest of the statute if a single provision is rendered unenforceable. But this guessing-game inquiry does not come into play where, as here, Congress itself has essentially eliminated the provision in question and left the rest of a statute standing… Under these circumstances, a court’s substitution of its own judgment for that of Congress would be an unlawful usurpation of congressional power and violate basic black-letter principles of severability. Yet that is what the plaintiff States and the United States invite this Court to do.
Law professor at the University of Michigan Nicholas Bagley, who is among the five scholars, further explained for The Incidental Economist that other Obamacare provisions can stand if the mandate disappears, because this has already happened. A few states had state guaranteed issue laws before Obamacare, arguing that insurers cannot deny people coverage based on a pre-existing condition, and none (with the exception of Massachusetts) had a mandate. Moreover, Bagley said, there are other more enticing ways, such as subsidizing health plans, to get people to enroll in insurance, thus preventing the marketplace from collapsing.
A mandate-less Obamacare is bad policy, but doesn’t render the entire law unconstitutional.
Who’s defending Obamacare? Not Trump.
Even though staunch Obamacare critics have argued that the entire health law can exist without the mandate, the Trump administration isn’t doing as much. Indeed, the Department of Justice (DOJ) declined to defend the federal health care law in court over the summer, a highly unusual move for the government’s lawyers to make. This prompted three DOJ attorneys to withdraw from the case when the federal government filed its brief, and led the most senior of them to resign.
Instead, the DOJ agrees with the GOP states, asking the court to strike down the mandate and three critical consumer protections for people with pre-existing conditions — but stops short of asking for the health law to be eliminated in full.
California and 16 other liberal states asked to intervene and are defending Obamacare in court. They argue the $0 tax is still technically a tax and thus constitutional. Furthermore, the plaintiffs aren’t harmed by Congress’ decision to zero out the tax penalty in 2019 and thereafter.
“A tax doesn’t have to generate revenue in order for it to be a tax,” North Carolina Attorney General Josh Stein told reporters last Thursday. And even if the court finds the mandate unconstitutional, Stein added, it’s severable from the rest of the health law.
What’s going to happen to your health care?
The chances of Texas and others succeeding in court are low — but high enough to rattle Republican senators into introducing a bill framed as protecting people with pre-existing conditions should a court invalidate these provisions. (However, it falls short of even doing that.)
Skeptics of the lawsuit’s merits believe this case only has a shot because of the judge presiding over it.
“So, while the 20 Republican officials behind Texas don’t have the law on their side, they may have a very partisan judge in their corner — and in the short term, that’s all they need,” wrote ThinkProgress justice editor Ian Millhiser. “O’Connor could very well issue a nationwide injunction halting the entire Affordable Care Act, and should he do so, the Trump administration will undoubtedly be eager to comply with that injunction.”
Best case scenario: O’Connor lets the ACA stand or just strikes down the individual mandate, which is zeroed out in 2019 anyway.
Worst case scenario: O’Connor grants the preliminary injunction, temporarily blocking enforcement of the entire ACA. And should this lawsuit ultimately prevail, an estimated 17 million people could become uninsured in 2019.
“I think what folks forget about is when they say the entire ACA, the plaintiffs asked for everything, so menu labeling and biologics… They want to reopen the Medicare drug donut hole,” said Katie Keith, a Georgetown professor who’s written extensively about the lawsuit for Health Affairs. “The ACA, for better or worse, touched almost every part of the health care system. Let’s be clear about what getting rid of that means.”
This lawsuit affects more than just the Obamacare marketplace, where 21 million people purchase coverage. Some states do have their own laws codifying parts of Obamacare and can still enforce provisions like guarantee issue and the birth control mandate, for example. But liberal states couldn’t realistically continue to implement other parts, like Medicaid expansion, which requires a lot of federal dollars.
Alternatively, O’Connor could grant a partial injunction, blocking the enforcement of the individual mandate and protections for people with pre-existing conditions. This means insurance denials or higher premiums and out-of-pocket costs for sick people who are self-employed or don’t get health care through work. And it could also affect employer-based plans. This scenario could play out one of two ways: everyone in the country with pre-existing conditions could see their insurance coverage at risk or only those living in the 20 conservative states, a tactic intended to prevent an appeal from liberal states. (And these 20 states include areas facing major health problems; one Indiana county recently declared a public health emergency due to a hepatitis C outbreak, a pre-existing condition insurers refused to cover before the ACA.)
“I don’t think the sky falls immediately,” Keith told ThinkProgress.
Even under these nightmare scenarios, Keith expects the judge to also grant a stay of the injunction, blocking its enforcement as Texas makes its way through the courts. But either way, some damage is done.
“We sort of saw this phenomenon last year when Congress tried to repeal the law,” she said. “If you have headlines that are about the ACA being unconstitutional, it’s going to be really confusing for folks.”
Regardless of O’Connor’s ruling, the decision will likely be appealed to the conservative Fifth Circuit and, then, maybe to the Supreme Court. One thing is clear: Obamacare will continue to be litigated indefinitely.