Moneybox

The Affordable Care Act Is Not Dead Yet

Young protesters march toward the Federal Building during a “Save the Affordable Care Act” rally in Los Angeles.
Yeah, I can’t believe we’re going through this either, kids.
Mark Ralston/Getty Images

Once again, the fate of Obamacare could soon be in the hands of one John G. Roberts.

On Friday night, a federal trial court judge in Texas struck down the entire Affordable Care Act, ruling that it had been rendered unconstitutional by the tax bill Republicans passed in 2017. The decision was widely anticipated and will certainly be appealed, potentially setting up a final showdown at the Supreme Court, where the health law has already been tested twice before.

Is this the beginning of the end of the Affordable Care Act? The coolheaded analytical part of me would like to say absolutely not. After all, the chief justice has already turned down two previous opportunities to drive a legal stake into the health law. And this case is, by many accounts, even more tenuous than the ones that came before it.

On the other hand, it’s 2018. Logic no longer applies, everything is permitted, and for all I know Roberts might have decided it’s a good time to strip health care from a few million of his fellow Americans. So let’s talk about the case.

The suit was filed by a group of 20 GOP-led states arguing that Obamacare’s individual mandate, which required Americans to buy health insurance or pay a fine, had been left unconstitutional after Republicans reduced the IRS penalty to zero as part of their tax bill last year. Their argument had three parts:

1) In 2012, the Supreme Court upheld the mandate on the grounds that it was a tax.

2) Now that there’s no more tax associated with the mandate, it can’t possibly be constitutional.

3) Because the mandate was considered essential to making the rest of Obamacare function—in legal terms, it was “non-severable”—the court should junk the rest of the health law too, including its expansion of Medicaid and protections for patients with pre-existing conditions.

In his tediously lengthy opinion Friday, Judge Reed O’Connor, a George W. Bush appointee who presides in Fort Worth, concluded that the red states were right: The mandate was unconstitutional, and the rest of Obamacare had to go.

Now, as University of Michigan professor Nicholas Bagley has pointed out, the question of whether or not the mandate is still constitutional actually isn’t all that important in the scheme of things. I mean, it’s fascinating in a dorm room bull session sense—is a $0 tax still a tax? We can debate that all day. But back in the real world, Republicans have functionally killed off the mandate, and Obamacare is managing to lope along without it. The really important question, from a legal and policy standpoint, is whether the rest of Obamacare can still stand if the mandate is ruled unconstitutional.

The answer to that key question should be: Yes. Congress may have thought that the insurance-buying requirement was essential to Obamacare when the law passed in 2010. But Republicans pretty clearly decided otherwise in 2017, when they tried and failed to repeal the Affordable Care Act, then decided to kill the mandate alone as a convenient way to help fund their tax bill. Not a single Republican member of Congress got up at the time and said: “We just repealed all of Obamacare.” They said, “We repealed the individual mandate.”

O’Connor, however, did not see things that way. He concludes that Congress believed the mandate was essential to all of Obamacare in 2010, and that the mandate cannot be severed from the rest of Obamacare, in part because Congress’ intent in 2017 was a complete and utter mystery:

Looking for any severability-related intent in the 2017 Congress is a fool’s errand because the 2017 “Congress did not repeal any part of the ACA, including the shared responsibility payment. In fact, it could not do so through the budget reconciliation procedures that it used.” (“The only thing that we know for sure about Congress’ intent in 2017 … is that Congress wanted to pass a tax cut.”). So, asking what the 2017 Congress intended with respect to the ACA qua the ACA is unhelpful. There is no answer.

One notable thing about this paragraph from O’Connor is that it’s factually incorrect. As Democratic Budget Committee staffer Bobby Kogan points out, Republicans could have repealed large parts of Obamacare, including the Medicaid expansion, under the reconciliation process they used to pass their tax bill. Some conservatives, such as former Republican Senate staffer Chris Jacobs, are equally unimpressed with O’Connor’s reasoning on the severability issue.

Higher courts will have to decide whether this ruling is truly as ridiculous as it seems to be. In the meantime, there is one piece of good news: O’Connor won’t stop Obamacare from running while the appeals process unfolds. Sign up while you still can.