A Short History of the Latest “Obamacare” Litigation

The following is a blog post I originally posted on another site, which I have copied here in case it is helpful in evaluating Judge Barrett’s stance on healthcare. Where links below are to Affordable Care Act Litigation on WordPress, I have compared the documents to the court filings on PACER to ensure their accuracy.

A week ago [at the time of first writing], the Trump Administration asked the Supreme Court of the United States to strike down the Affordable Care Act. Media have reported this as an attempt to strike down Obamacare, removing any protection for Americans with pre-existing conditions. That is inaccurate. The truth is far worse.

“Obamacare” consists of the requirement that health insurance companies provide insurance to all who request it at a price not based on the applicant’s health status, collectively known as the Community Rating and Guaranteed Issue provisions, and the Individual Mandate that renders this affordable by requiring those who can afford health insurance to purchase it. The Affordable Care Act is commonly understood as synonymous with Obamacare but is actually far broader. 

Republicans have repeatedly attempted to eliminate Obamacare through litigation. The current lawsuit stems from the Republican tax legislation of 2017. Among other provisions, this legislation removed the penalty for failing to buy health insurance. The U.S. Code still demands that those who can buy health insurance “shall” do so; if they do not, however, they must pay the hefty fee of $0.

On 26th February, 2018, a coalition of states filed a complaint with the U.S. District Court for the Northern District of Texas. (The parties have since changed, many times.) These Challengers argued that the Individual Mandate violated the U.S. Constitution, because the Supreme Court had previously held that the Mandate could only be constitutional as a tax – and a tax of $0 is no tax at all. Furthermore, the Challengers argued, the Community Rating and Guaranteed Issue were inseverable from the Mandate. In lay person’s terms, these elements were so closely entwined that invalidating the latter required invalidating the former. 

That argument is far from indisputable. It is also politically motivated and potentially catastrophic for many Americans. Legally, however, it makes sense. Yet the Challengers went further. They argued that the entirety of the ACA was inseverable from the ACA: that, if Congress could not have passed the Mandate, it would not have passed any legislation to improve American healthcare. The Mandate was unconstitutional, they claimed, so the whole Act had to go. 

To appreciate the significance of this argument, you have to understand the full scope of the ACA. The entire ACA was over 900 pages long. It effected a legion of other changes to healthcare in the United States, many totally unrelated to “Obamacare,” which would be extremely disruptive to undo. The extent of these provisions is far, far beyond the scope of this blog entry; for a good overview, read the American Medical Association’s amicus curiae brief to the Court of Appeals or the online summary by the Kaiser Family Foundation. The very short version is that American healthcare would become even more expensive and many would lose access to it entirely.

The Trump Administration’s initial position was less bold than the Challengers’. The Department of Justice argued that the Mandate was unconstitutional and that Community Rating and Guaranteed Issue were not severable. That is, from the beginning, the Trump Administration took the position that the court should strike down any protection for those with pre-existing conditions. For the DOJ to argue that a law should be struck down is unusual: not unprecedented – for example, the Obama Administration opposed the Defence of Marriage Act – but sufficiently controversial that law professors felt the need to defend it in the Wall Street Journal. Nevertheless, the DOJ argued that the rest of the ACA should be left intact.

On the 14th of December, 2018, Judge Reed O’Connor struck down the entire ACA. He first decided that the individual citizens challenging the lawsuit (who joined after the initial complaint) were legally able to do so, although they had chosen to follow the law instead of paying literally nothing. He then held that the Mandate remained a compulsion but was no longer a tax and so had become unconstitutional. Finally, without discussing the vast majority of the Act, Judge O’Connor held that it was all inseparable from the Mandate.

This decision, particularly the third aspect, has been widely criticised (indeed, when I first explained it to colleagues, they were sure I’d misunderstood it). After much consideration, conservative legal scholar Josh Blackman (who has written widely on ACA-related litigation) agreed with much of the decision but would have found most of the ACA severable from the Individual Mandate. Several legal academics argued to the Court of Appeals that the analysis was wrong. Others were less polite: conservative lawyer Ted Frank tweeted that the decision was “embarrassingly bad”; Philip Klein in the Washington Examiner called it “an assault on the rule of law”; professor Nicholas Bagley (one of the aforementioned academics) described it as “an exercise of raw judicial activism” and “rooted . . . in a sort of Know-Nothingism that’s taken hold in some corners of the conservative legal movement.

To his credit, Judge O’Connor stayed his decision until after the inevitable appeal. That was when the Administration changed tack. On the 25th of March, 2019, the DOJ wrote to the Court of Appeals for the Fifth Circuit that “the district court’s judgment should be affirmed,” and “the United States [was] not urging that any portion of the district court’s judgment be reversed.” Sure enough, on the 1st of May, it briefed the court that “the proper course is to strike [the ACA] down in its entirety.” Confusingly, that brief also stated that the Challengers “do not have standing to seek relief against provisions of the ACA that do not in any way affect them” and the DOJ later argued that the court had struck down the ACA “in the plaintiff states.”

The DOJ maintained its (somewhat contradictory) new position in oral argument before the Court of Appeals. After the Court of Appeals held that the Mandate was unconstitutional, without deciding how this would affect the rest of the ACA, multiple parties appealed to the Supreme Court. The Court granted their petitions in March. You know the rest.

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