California v. Texas Reaffirmed that the ACA Imposed a Mandate, and Did Not Create a Choice

"As originally enacted in 2010, the Patient Protection and Affordable Care Act required most Americans to obtain minimum essential health insurance coverage."

Over the past decade, there has been a never-ending debate: did the ACA impose a requirement to purchase insurance, or did the law give people a choice to buy insurance or pay a tax penalty. The difference may seem trivial, but the Chief's saving construction in NFIB turned on this point.

During the oral arguments in California v. Texas, Justice Sotomayor and Kagan strongly advanced the "choice" position. Indeed, they charged Texas Solicitor General Kyle Hawkins with disregarding NFIB v. Sebelius.

For example, Justice Sotomayor stated that NFIB "said at least four times by my count that individuals cannot be compelled to buy health insurance under the Commerce Clause." She added, "They could only be asked to make a choice under the tax clause." Justice Sotomayor charged that the individual plaintiffs adopted a position that is "contrary to what NFIB said." The Plaintiffs "still believe that there's a command . . . that they must buy health insurance." General Hawkins replied that Part III-A of the Chief Justice's opinion found "that the best reading of the individual mandate is as a commands to purchase health insurance." But in Parts III-B and III-C, "the Chief Justice explained that an alternative reading was fairly possible." The Court did not hold that the "choice" reading was the best reading of the statute.

A few moments later, Justice Kagan began her questioning. She said NFIB held that "the ACA was not an unconstitutional command." One sentence later, Justice Kagan repeated that the ACA was "not an unconstitutional command." Therefore, Justice Kagan explained, "I would think that" choice holding "has to be the starting point." General Hawkins challenged "the premise of [her] question about the holding of NFIB." Hawkins said that Justice Kagan's understanding of the "holding is an alternative reading of the statute" based on the "savings construction." And that saving construction was "predicated on the fact that [in 2012] the individual mandate could possibly be read as glued together with the penalty provision." Justice Kagan did not like that answer. She interrupted Hawkins, and said, "I think you have to accept that holding, because that holding is what allowed the ACA to remain in existence all this time." Justice Kagan explained that the five members of the Court held "that the ACA was not an unconstitutional command." Hawkins responded that the "underlying predicate of that holding" under the saving construction no longer holds. Therefore, the "Court is not bound by that" saving construction. Kagan continued to fight this answer. She asked how removing a penalty, which made the "law less coercive," could make it "more of a command." Hawkins returned to NFIB. In light of Part III-A of the controlling opinion, "the law was always best read as a command." By this point, Justice Kagan seemed frustrated. "You're just disputing the premise of what we held in NFIB, which . . . I don't think you can dispute." She pivoted to a different topic."But let me go on . . . ."

Michael Mongan, the Solicitor General of California, expressly adopted the "choice" reading of NFIB. His opening statement began, "In NFIB, this Court construed Section 5000A of the Affordable Care Act to create a choice: either obtain the health insurance addressed in sub (a) or pay the tax described in sub (b)." Don Verrilli, representing the House, had advanced the "choice" reading in NFIB, and reaffirmed it here: "The 2017 Congress did not convert Section 5000A from a choice to a command."

 

On Thursday, the Supreme Court decided California v. Texas. Given that the Court tossed the case on standing grounds, I fully expected the Court to avoid the choice/mandate question. But it didn't. Indeed, the very first sentence of Justice Breyer's majority opinion accurately described Section 5000A(a):

As originally enacted in 2010, the Patient Protection and Affordable Care Act required most Americans to obtain minimum essential health insurance coverage.

"Required." There was no choice. There was a requirement. A mandate. Indeed, the word "choice" appears nowhere in the decision. By contrast Section 5000(A) is described as a requirement throughout the majority opinion.

And the second sentence described the penalty as an altogether separation provision:

The Act also imposed a monetary penalty, scaled according to income, upon individuals who failed to do so. 

The word "so" refers back to the previous sentence: complying with the requirement to buy insurance.

Justices Sotomayor and Kagan fiercely resisted this premise during the oral arguments. They charged the Plaintiffs with NFIB revisionism. The duo must have gritted their teeth to join these opening sentences.

Moreover, if Justices Kagan and Sotomayor were correct, and there is no mandate, then Section 5000A(a) cannot impose an injury in fact. If there is no requirement, then there is no mandate to buy insurance. The case would be over very quickly. But the Court didn't take that path. The Court seemed to suggest that there very well may be a classic pocketbook injury from the mandate, standing by itself, without a penalty.

But even if we assume that this pocketbook injury satisfies the injury element of Article III standing, see Whitmore v. Arkansas, 495 U. S. 149, 155 (1990), the plaintiffs nevertheless fail to satisfy the traceability requirement.

The Court ultimately ruled on traceability, which involved a far more elaborate analysis than a straightforward injury analysis.

***

The ACA imposes a requirement to buy insurance, and does not offer a choice to pay a tax-penalty. That fact was true in 2010. It was true in NFIB. And it remains true today. Thursday was a fairly bleak day. But this small victory was rewarding. I've fought the "choice" reading of NFIB for a very long time now. I hope this issue is finally settled.

Finally, once you concede that the mandate, standing by itself was a command to buy insurance, without regard to the penalty, the "injury in fact" prong of the Article III analysis is set. We are not left with a precatory suggestion. We have a command to buy an unwanted product. And why is that product unwanted? The individual plaintiffs wanted to buy cheaper plans that were barred because of various insurance regulations. And those insurance regulations were inseverable from the mandate. Their injuries could be addressed by enjoining the actions of federal officers who enforce those insurance regulations.  Injury in fact? Check. Traceability? Check. Redressability? Check. Alas, the Court found that argument forfeited. For what it's worth, our amicus brief fairly raised it. Waiver was the easiest way to the finish line. Justice Breyer is a master at making cases seem simpler than they are.