Patient Protection and Affordable Care Act Returns to Federal District Courts

By Isaac Cui (PO ’20)

The Patient Protection and Affordable Care Act (ACA), colloquially called Obamacare, is back in the federal district courts. On February 26, 2018, 20 states, led by Texas, filed suit against the United States seeking to enjoin the enforcement of the Affordable Care Act. While the remedy sought sounds drastic, the suit rests on dubious legal analysis, and it is difficult to see how the suit could be successful.

The ACA was signed into law in 2010 in order to increase national healthcare coverage. Among its most controversial policies was the individual mandate, a requirement that most individuals buy health insurance. Other important aspects of the ACA included an expansion of Medicaid, regulations on on healthcare plans, and creating new healthcare exchange systems. The current challenge to the ACA, however, focuses on the individual mandate.

The Complaint[1] filed by the states rests on the idea that the only constitutional basis for the ACA’s individual mandate was from a penalty associated with not owning insurance. Under the original ACA, those who qualified under the individual mandate but who did not own insurance had to pay a fee to the federal government. Because that penalty (but not the mandate) has been repealed[2] under the Tax Cuts and Jobs Act of 2017, according to the Complaint, the individual mandate itself becomes unconstitutional. The Complaint further argues that if the individual mandate, “the heart of the ACA,”[3] is unconstitutional, then “the remainder of the ACA must also fall.”[4] Thus, the states request that the court enjoin the enforcement of the ACA.

 In order for the challenge to succeed, a few things have to be true: first, that the individual mandate can be understood as the combination of a penalty and a requirement; second, that repealing the penalty implies that the individual mandate, as a whole, loses its constitutionality; third, that if the individual mandate falls, then the ACA as a whole must as well; and forth, that it is the prerogative of a court to decide such an issue. While the first two assumptions are at least debatably true, the third and fourth are much more difficult to believe.

The logic of this argument arises from the convoluted litigation associated with the ACA. In 2012, in National Federation of Independent Businesses (NFIB) v. Sebelius, a highly splintered Supreme Court held (5-4) that the individual mandate is not a constitutional exercise of Congress’s Commerce Clause powers.[5] However, a different majority (also 5-4) held that the individual mandate could be construed as an exercise of Congress’s Taxing powers.[6] According to the Court, the only reason that the individual mandate could be construed as a tax was because it had “the essential feature of any tax: it produce[d] at least some revenue for the Government.”[7] Based on that idea, the Complaint alleges that, if the mandate loses its penalty, then calling it a “tax” for constitutional purposes no longer makes sense. While a valid point, it is a bit dubious to say that a defanged mandate still “exists” in a way that can be challenged.[8]

 The third assumption required by the Complaint, that rejection of the individual mandate requires a rejection of the ACA in its entirety,  is difficult to square with the Supreme Court’s actions. The Complaint’s citation to the NFIB decision, notably, cites only the dissenting opinion for the statement that the entire ACA must fall as a result of a finding that the individual mandate is unconstitutional.[9] Consider the non-individual mandate related issue at hand in the NFIB decision—the Medicaid expansion. The ACA’s Medicaid expansion, briefly, required states to increase their Medicaid coverage: Under the ACA, the federal government would shoulder the vast majority of the increase in costs—in fact, the federal government would pay the entirety of the costs associated with the expansion until 2016, after which its payment would decrease to a minimum of 90%. However, if a state chose to reject the federal government’s offer, its pre-existing Medicaid funding would be rescinded.[10] The Chief Justice’s opinion concluded that this was unconstitutionally coercive.[11] That conclusion could have led the Chief Justice to strike down the entirety of the ACA, but he, and five other justices, explicitly chose not to, saying that “[t]he question here is whether Congress would have wanted the rest of the Act to stand”[12] should the Medicaid funding-threat be severed. “Unless it is ‘evident’ that the answer is no, we must leave the rest of the Act intact.”[13]

The precedent implies that the question in this litigation is whether Congress would have concluded that the ACA would make sense absent the individual mandate. The Complaint argues that Congress could not possibly make that determination: “[a]bsent the individual mandate, the ACA is an irrational regulatory regime governing an essential market.”[14] Citing a wealth of evidence, the Complaint argues that the ACA simply does not make sense absent the individual mandate.[15] Perhaps that is true. But the issue of legislative intent cannot be from the perspective of the original Congress that passed the ACA, which is mostly what the Complaint cites. It  is obvious that he original Congress would have wanted the entire ACA—that’s why it passed the ACA the way it did! But the Congress that passed the 2017 Tax Cuts did not want to repeal the entirety of the ACA—even as it tried extremely hard to repeal and replace the ACA. From the perspective of legislative intent, Congress made a determination that the optimal national policy was one in which most of the ACA was left standing, with the exception of the individual mandate. Congress failed to make any broader changes to the ACA, which means the legislative intent of Congress must be understood as accepting the ACA even without the individual mandate, no matter how dubious a previous Congress might have thought such a policy to be. The ACA, as it exists now, is broadly the result of Congress’s actions, which makes it difficult to argue that it should be struck down in its entirety for being irrational.

This is the broader issue with the Complaint—and the issue with its fourth assumption about the court’s ability to decide this issue. It is very different for Congress, the duly elected representatives of the people, to repeal past legislation than it is for courts, which are unelected, to strike down legislation. Congress spent many months debating the intricacies of repealing and replacing the ACA. Courts, on the other hand, “possess neither the expertise nor the prerogative to make policy judgments.”[16] Their task is restrained to a simple dictum: “to say what the law is.”[17] In this case, the law is clear—the ACA is here to stay so long as the elected branches of government do not act otherwise.

[1] Texas et al. v. United States et al., No. 4:18-cv-00167-O (N.D. Tex.) (compl.), available at: https://www.texasattorneygeneral.gov/files/epress/Texas_Wisconsin_et_al_v._U.S._et_al_-_ACA_Complaint_(02-26-18).pdf. [Hereinafter, Complaint.]

[2] Cristiano Lima, Trump boasts of individual mandate repeal in GOP tax bill, Politico (Dec. 20, 2017), available at: https://www.politico.com/story/2017/12/20/trump-individual-mandate-repeal-tax-bill-308286.

[3] See Complaint, supra note 1, at 4.

[4] Id.

[5] See generally NFIB v. Sebelius, 132 S.Ct. 2566 (2012) (between the opinion of the Chief Justice and the joint dissent of Justices Scalia, Kennedy, Thomas, and Alito, a majority of the Supreme Court concluded that Congress lacks such authority).

[6] This majority consisted of the Chief Justice and Justices Ginsburg, Breyer, Sotomayor, and Kagan. Id.

[7] Id. at 2594 (Opinion of Roberts, C.J.).

[8] For example, laws can exist on the books that one technically breaks—but that does not mean that they can always be challenged in court. The Supreme Court has held that plaintiffs, in order to get judicial review of a government action, must overcome three requirements: first, plaintiffs must have suffered “an invasion of a legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical”; second, plaintiffs must show “a causal connection between the injury and the conduct complained of”; third, the injury must have a judicial remedy. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal citations and quotation marks omitted). It is dubious to say that anyone is suffering a “concrete” injury from a mandate that lacks a penalty. Recognizing such, the Complaint focuses on the harms caused by the ACA writ large, rather than the harms from the repeal of the individual mandate. See Complaint, supra note 1, at 16-26.

[9] Id. at 4.

[10] NFIB, supra note 5, at 2601.

[11] This conclusion was joined by Justices Breyer and Kagan, as well as the Joint Dissent. See generally, NFIB, supra note 5.

[12] Id. at 2607.

[13] Id.

[14] Complaint, supra note 1, at 4.

[15] See id. at 16-26.

[16] NFIB, supra note 5, at 2579.

[17] Marbury v. Madison, 5 U.S. 137, 177 (1803).

One thought on “Patient Protection and Affordable Care Act Returns to Federal District Courts

  1. Pingback: The Department of Justice’s Refusal to Defend the Affordable Care Act | The Claremont Journal of Law and Public Policy

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