Affordable Care Act

Obamacare Returns to the Supreme Court—Yet Again

My take on today's decision to consider the Obamacare severability case.

|The Volokh Conspiracy |

Earlier today, the  Supreme Court decided to take yet another case involving the Affordable Care Act (AKA Obamacare). By my count, this is the fourth time the Court has considered a case challenging the legality of some portion of the ACA. I agree with most of what co-blogger Jonathan Adler writes about the case here. As Jonathan indicates, the core argument made by the plaintiffs—that all of Obamacare should fall if the now-largely neutered individual health insurance mandate is unconstitutional—is badly wrong. I doubt there will be five votes on the Court for that position.

To briefly recap, this case arose because, in December 2017, the then-GOP-controlled Congress passed a tax reform law that zeroed out the monetary penalty attached to the Obamacare health insurance mandate, but left the mandate itself on the books. The ACA still officially has a provision requiring most Americans to purchase government-approved health insurance. But violators suffer no penalty if they choose not to follow this requirement.

In  its controversial 2012 ruling in NFIB v. Sebelius, the Court narrowly rejected a previous challenge to the constitutionality of the mandate. But Chief Justice John Roberts' controlling opinion for the Court only reached this conclusion by reinterpreting the mandate as a tax, thereby saving it from being declared unconstitutional.

After the 2017 tax reform bill eliminated the monetary penalty attached to the mandate, twenty red states filed a lawsuit arguing that what's left of the mandate was no longer constitutional, because it could not be a tax, if it doesn't raise any revenue. Much more controversially, they also contended that the rest of Obamacare must fall with the mandate, because the latter is such an important part of the statute that it cannot be "severed" from it.

In 2018, federal district Judge Reed O'Connor issued a highly dubious ruling embracing the plaintiffs' arguments on both points. In December 2019, a 2-1 decision by the US Court of Appeals for the Fifth Circuit upheld O'Connor's decision on the unconstitutionality of the mandate, but vacated and remanded his ruling on the severability issue, in effect requiring him to redo that analysis almost from scratch.

The Supreme Court's decision to hear the case cuts short what might have been prolonged further litigation in the lower courts. We will probably have a definitive resolution of the case sometime within the next year or so.

In my view, what's left of the individual mandate is indeed now unconstitutional under Roberts' reasoning in NFIB v. Sebelius, Unlike most other commentators, I think this part of the case is actually important. I explained the reasons why here.

But I certainly understand why nearly everyone else is focused almost exclusively on the severability question. That is what will decide the future of the ACA. The status of the residual mandate may be an important constitutional question, but it has little if any significance for the immediate future of health care policy.

On the severability issue, I think the plaintiffs are badly wrong. I explained the reasons why here, and in my analyses of the trial court ruling and the Fifth Circuit decision. There are a number of different plausible ways to address severability issues. But none of them can justify the conclusion that a virtually toothless mandate is somehow so essential to the ACA that it cannot be severed from the rest. Along with a cross-ideological group of other legal scholars, Jonathan Adler and I addressed this point in greater detail in two amicus briefs we have filed in the case (see here and here). We may well file an updated version in the Supreme Court.

Why did the Court decide to hear this case rather than follow the more usual procedure of letting the lower court reach a final decision on the key issue (in this case severability)? I think Jonathan is probably right to think that it's because of the political importance of the issue rather than because the legal arguments are particularly strong. The justices may want to avoid prolonging the uncertainty about the future of the health care system that this litigation unavoidably causes so long as it continues.

Like Jonathan, I also doubt that the plaintiffs will prevail on the severability question, though it's entirely possible they will win on the issue of whether the residual mandate is now unconstitutional. At the same time, I am not as confident about these conclusions as many other commentators seem to be.

The history of Obamacare litigation is littered with erroneous predictions by academics and other experts. I myself have a mixed track record in that regard.

In the original Obamacare litigation, I correctly predicted that the case on the constitutionality of the mandate would be a very close decision (at a time when many experts thought it would be a slam dunk for the Obama administration), but did not expect the administration's tax argument to succeed, and also did not expect the plaintiff states to prevail  on the Medicaid aspect of the case (even though I favored their position myself). In the present case, I was surprised by Judge O'Connor's to embrace the plaintiffs' severability claim, but the Fifth Circuit's reluctance to do so was much more consistent with my expectations, as was both courts' willingness to rule that the residual mandate is now unconstitutional.

Given this history, a degree of humility is in order. It would be foolish to ignore the possibility that I —and other commentators—might turn out to be wrong about some of our predictions again.

Regardless of how the case turns out, the Supreme Court's decision to take it ensures that Obamacare—and the Trump administration's support for the plaintiff states' lawsuit—will be in the news more often during the 2020 election year. Political conventional wisdom suggests that is good news for the Democrats, as Trump's and the GOP Congress' inept efforts to repeal the law have helped make the ACA's popularity great again—indeed, greater than it ever has been before.

NOTE: Although I have joined two amicus briefs in this case, the opinions expressed in this and other posts about it reflect only my own views, not necessarily those of the other scholars who joined the briefs.

This is also a good place to point out that I did not join these briefs because I am a fan of Obamacare. Much the contrary. I authored an amicus brief against the Obamacare individual mandate in the initial 2011-12 challenge to its constitutionality, and also wrote a coauthored book and various articles arguing that it and some other parts of the law are unconstitutional.

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  1. Trump secretly supports Obamacare because the Kushner family is heavily invested in the ACA Exchanges through Oscar Health…sometimes Trump being corrupt and unethical works in the favor of Democrats. 😉

  2. IANAL, but I thought Roberts’ calling the mandate a tax was clearly just rationalization in the first place.

    1. Does the fact Obamacare is stronger than ever give you the sadz?? I am sorry you don’t like those unlucky Americans getting awesome Medicaid at your expense. Hopefully we will invade another country and we will go bankrupt and those people will lose their Medicaid…a girl can dream.

      1. Weird trying to figure out if that rattle-brained nonsense is poor sarcasm or poor trolling.

        1. So sadz. I would prefer my hard earned tax dollars being flushed down a toilet in the Middle East.

          1. Like you actually pay taxes, leftist troll.

        2. I think it must be poor sarcasm, but if it’s Cremmington, it’s going to be poor something.

    2. Sometimes being cute comes back to bite people in the ass. Otherwise known as being hoist by your own petard.

  3. My own take on severability is that the courts should basically never “sever” parts of laws, and certainly not where there is no severability clause.

    The legislature enacts a law, they enact it as a whole. Nothing entitles the courts to edit the law after the fact, producing a new law that the legislature never enacted. They should just strike the whole thing down, returning us to a prior legislatively enacted state of the law.

    Maybe if the courts didn’t indulge in severance, Congress would be a bit more careful about not including unconstitutional features in their laws, and stop writing omnibus legislation.

    1. Applying that to this case though the “prior legislatively enacted state of the law” is Obamacare intact but with the penalty and invalidation of the TCJA. Which as far as severability goes I think is the right focus if not answer. It is the TCJA that is causing the unconstitutionality, therefore it is the TCJA where the severability analysis should be, not the ACA

  4. Absent an enforcement mechanism, the mandate is simply hortatory legislation. There is a long history of hortatory legislation in this country, particularly on matters of morals.

    So long as the laws aren’t enforced, legislatures are entitled to decorate their stature books however they wish. Without enforcement there is no Article III standing. Simply having a law on the books that you don’t like is not sufficient to give rise to an Article III car or controversy.

    Further, given that the law was previously classified as a tax, a tax of $0 is simply nothing. There is no need for Federal courts to make any ado about it, let alone the much they have made.

  5. @mse326, I like your analysis, but thinking through the implications is making my head hurt

  6. Severability means taking a strike-out pen to the written law, at least figuratively. In other cases, courts rule on the applicable meaning of words and phrases in the laws.

    In today’s digital world, it is relatively easy to published an edited version of the law that citizens are bound to follow. Ignorance of the law is no excuse. Compare that to the archaic system of requiring citizens to read the text of the law, plus all the court decisions that may have impinged on the meaning of the law. On top of that, the legal vocabulary used in laws and decisions sometimes conflicts with common meanings of words. That requires us to hire lawyers to tell us what the law is that we are obligated to obey, we can’t just go to a government web site an read it in plain language.

    If I was a Congressman or Senator, I would work on a bill revising the whole approach to fit 21st century abilities. The goal would be to integrate statute+subsequent repeal/revision statutes+accumulated court decisions+regulations into a single written document expressed in plain language. Citizens could only be held liable to comply with that single final document.

    Of course the document changes with time, but computers can readily deliver the version of the document applicable at any date in history.

    In other words, instead of courts and regulators figuratively taking an editing pen to the text of a statute, I suggest that they use a literal editing pen. No doubt, every lawyer would hate this idea because it deprives them of much of their power.

  7. Getting health insurance through the Affordable Care Marketplace I am. Pleased I am not. Expensive it is. If too much money I earn, Premium Tax Credit repay I must.

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