The Bitter Battle Over the Affordable Care Act

By Bryce Wachtell (PO ’21)

The Affordable Care Act (ACA)—President Obama’s foremost legislative accomplishment—has seen countless challenges in court. That continued last week, eight years after the law was first passed, when Judge Reed O’Connor of the Federal District Court in Fort Worth ruled the ACA unconstitutional on the grounds that the individual mandate exceeds congressional powers. A coalition of states, led by California, will surely appeal the decision to the Supreme Court, but the ruling nonetheless provides an interesting look into the turbulent, self-contradictory, and acrimonious health care battle that has captivated the nation in the courts and beyond.

Though it covers a wide swath of health-care related policy, the ACA’s most problematic element has become its individual mandate. In short, this component of the law requires most Americans acquire insurance or suffer a financial penalty. The purpose of such a mandate is to grow the pool of those purchasing insurance, including those who are healthy and have no immediate prospect of filing a claim. If enough healthy people comprise the risk pool and the proportion of those who file claims remains consistent, then premiums go down for everyone. This then ensures those with preexisting or unusual and expensive conditions do not suffer tremendous financial barriers in pursuing medical treatment.

For almost a decade now, conservatives, including Judge O’Connor, have argued that such a mandate constitutes a violation of congressional powers. But now, for the first time, such an argument has been legitimized in court. The pivotal difference in this newest challenge to the ACA lies in how the Executive enforces the financial penalty for the uninsured. The Trump Administration, which has been notoriously anti-Obama, failed to the repeal the law in entirety. However, Trump striped its effectiveness by announcing the penalty would become zero—thereby eliminating the incentive for healthy Americans to buy insurance. In fact, on his very first day in office, President Trump issued an executive order that instructed agencies to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden.” In his consequential opinion, Judge O’Connor leverages this new development, positing that a penalty of zero can no longer be considered an exercise of Congress’s tax or interstate commerce powers.

The remarkable implication of last week’s ruling is that the decision purports to strip the law of all authority. This encompasses the ACA’s expansion of Medicaid and prohibition of pre existing condition penalties, among other things. Judge O’Connor wrote. “Congress stated many times unequivocally—through enacted text signed by the President—that the Individual Mandate is ‘essential’ to the ACA. And this essentiality, the ACA’s text makes clear, means the mandate must work “together with the other provisions” for the Act to function as intended… Because rewriting the ACA without its ‘essential’ feature is beyond the power of an Article III court, the Court thus adheres to Congress’s textually expressed intent and binding Supreme Court precedent to find the Individual Mandate is inseverable from the ACA’s remaining provisions.”

Soon after his decision, Judge O’Connor’s ruling was excoriated by lawyers, politicians, and academics alike. He is a contributor for The Federalist Society, a conservative legal group, and has been accused of wrongly politicizing the courts. Law Professors Jonathan H. Adler and Abbe R. Gluck wrote that his decision represented “an exercise of raw judicial power, unmoored from the relevant doctrines concerning when judges may strike down a whole law because of a single alleged legal infirmity buried within.” Indeed, two coalitions of states—one in support of the ruling (led by Texas), and one against it (led by California)—seem poised to bring the battle to the Supreme Court for further scrutiny.

Donald Trump and other conservatives who have long sought to dismantle the ACA applauded the ruling. On December 14th, the President tweeted, “Wow, but not surprisingly, the ACA was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!”

Much of law rests on technicalities and nuance (like the question of a tomato’s botanic category, or the inclusion of a headnote in court summaries.) With the Trump administration’s changed approach to the ACA, the landmark healthcare law once again finds itself in legal jeopardy because of a simple question: can an unenforced fine of zero dollars constitute a tax? If—or rather, when—the Supreme Court takes on the ACA’s authority once again, this question must be settled. In the meantime, the nation, and the tens of millions of Americans who have benefited from the ACA, remain on edge.

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