President Donald Trump is celebrating a Friday-night win in Texas Federal Court in which a conservative federal judge struck down the Affordable Care Act on grounds that it is unconstitutional.
As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!
— Donald J. Trump (@realDonaldTrump) December 15, 2018
Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!
— Donald J. Trump (@realDonaldTrump) December 15, 2018
The act will remain in place for now, as those defending it appeal the District Court’s ruling. In the long run, SCOTUS may decide to break with the lower court’s reasoning and uphold Obamacare for a second time — but Trump’s tax plan created a legal wrinkle that at least threatens the fate of the ACA for good. The underlying legal drama surrounding the ACA centers not around healthcare at all, but around the age-old battle between those who seek to enlarge and those who seek to constrict the scope of Congress’ power.
For some background, let’s catch up a bit with what’s been happening in the land of Obamacare.
The 2010 Patient Protection and Affordable Care Act (ACA) is a complex law that has two headliners: the individual mandate and protection for preexisting conditions. Because the individual mandate requires individuals to purchase health insurance, the ACA has, from its inception, fielded predictable challenges from fiscal conservatives.
In one such challenge that made it to SCOTUS in 2012, the government argued that a forced-purchase of health insurance was a proper exercise of Congress’ power under the Commerce Clause. Because healthcare costs for the uninsured have a massive impact on our national economy, the individual mandate as a remedy was well within the scope of Congress’ authority – or so the government’s logic went. SCOTUS disagreed, as it was hardly ready to start allowing Congress to mandate individual consumer transactions in the name of the national economy.
All wasn’t lost, though, and SCOTUS saved the individual mandate by calling it a “tax.” And such a conclusion was well-supported by the facts. Under the ACA, individuals without their own health insurance are required to pay an “exaction” to the Treasury, the amount of which is determined by their income, filing status, and dependents. It’s collected and enforced by the IRS and required under the Internal Revenue Code. Sounds pretty taxy to me.
Enter President Trump, whose promise to repeal the ACA was a major campaign talking point. And in a neat coincidence, it seems that he is also relying on tax law to do so. Last December, Trump signed the Tax Cuts and Jobs Act of 2017 (TCJA) into law. One provision of the TCJA eliminated the very penalty that had saved the ACA’s individual mandate. Reducing that mandatory payment to zero was the only action the TCJA took that affected the ACA – but that action has now struck at the heart of Obamacare.
The lawsuit pits states against each another –Plaintiffs include the States of Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wisconsin, and Maine, while Defendants are the United States of America, the Department of Health and Human Services, and the Internal Revenue, joined as “intervenors” by California, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, and Washington, and the District of Columbia. U.S. District Court Judge Reed O’Connor faced the question of whether to uphold the individual mandate now that the “tax” has been effectively eliminated:
The question of constitutionality is straightforward: Is the Individual Mandate a constitutional exercise of Congress’s enumerated powers when the shared-responsibility payment is zero?
Because the Supreme Court upheld the Individual Mandate under Congress’s Tax Power, the Court will begin there before proceeding to an Interstate Commerce Clause analysis. The Court finds that both plain text and Supreme Court precedent dictate that the Individual Mandate is unconstitutional under either provision
No money, no tax. No tax, no Tax Power. No Tax Power, no ACA. Judge O’Connor, pointing out that at its heart, the ACA requires individuals to buy something, dismissed defense arguments to the contrary as “logical gymnastics.”
The real blow to the ACA came in the form of a severability analysis. Judge O’Connor not only struck down the controversial individual mandate, but the entire ACA. O’Connor found that the individual mandate was such a central component of the ACA as to be inseparable from the remainder of the law; as a result, provisions such as those that help Medicare beneficiaries, and those that allow young adults to remain on their parents’ insurance policies will similarly be eradicated (or at least would have been eradicated had a stay not been issued to hold the matter in abeyance until appeals are completed.)
Although Donald Trump appears confident that the inevitable appeals will also go his way, the fate of the ACA is by no means a foregone conclusion. The five SCOTUS justices who voted to uphold the ACA in 2012 are all still on the bench – and the Supreme Court has decades of gold medals in the very “logical gymnastics” Judge O’Connor lamented.
(For one historical example, I point the reader to Missouri v. Holland, a 1920 case in which SCOTUS ruled that Congress’ power to regulate duck hunting was justified under the Treaty Power.)
Prominent Democratic voices weighing in with their own confident predictions about the fate of the ACA.
Tonight’s absurd ruling exposes the monstrous endgame of the GOP’s all-out assault on people w/ pre-existing conditions & the ACA. When @HouseDemocrats take the gavel, the House will swiftly intervene in the appeals process to #ProtectOurCare!
— Nancy Pelosi (@NancyPelosi) December 15, 2018
My administration is reviewing the strength of this ruling. In the event any court damages the #ACA, I will do everything in my power to direct state agencies to protect Pennsylvanians. https://t.co/pVOaLtBkKn
— Governor Tom Wolf (@GovernorTomWolf) December 15, 2018
Millions upon millions of Americans rely on the #ACA for their healthcare. We’ll continue to fight in court for New Yorkers and all Americans.
— NY AG Underwood (@NewYorkStateAG) December 15, 2018
SCOTUS may well employ wholly different reasoning than did Judge O’Connor. However, it’ll have to grapple with District Court’s logic on some level. A tax that generates no government income is hardly a tax at all — and it hardly takes a Supreme Court justice to recognize that reality. Whether Trump’s tax plan creates a death blow or just a speed-bump for the ACA is unclear at this point, but Law & Crime will keep watching and updating on this one as it makes its way to the SCOTUS.
Follow Law&Crime:
