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The Affordable Care Act is being challenged in the courts yet again — and a Fifth Circuit decision could help determine whether that fight winds up going any further.
On Tuesday, the Fifth Circuit Court of Appeals heard oral arguments in the case of Texas v. Azar, a suit brought by 18 state attorneys general — and endorsed by President Donald Trump’s administration — that marks the latest legal challenge to the ACA. The hearing comes in the wake of a 2018 decision by District Court Judge Reed O’Connor, who determined that the ACA is unconstitutional now that Congress has rolled back the penalty requiring everyone who did not carry health insurance to pay a fine.
Legal experts on both sides of the aisle have argued that O’Connor’s reasoning was faulty and likely to be overturned by the Fifth Circuit. Questions from two of the three judges hearing the case on Tuesday, however, indicated that they, too, were interested in gauging the constitutionality of the law as it stands.
Judge Jennifer Elrod, one of the two Republican appointees on the panel, wondered whether the elimination of the health insurance penalty — known as the individual mandate — did effectively invalidate the law. “If you no longer have the tax, why isn’t it unconstitutional?” she asked. Elrod and fellow Republican appointee Judge Kurt Engelhardt also noted that Congress hadn’t explicitly said it intended to preserve the law when it undid this piece of it in 2017.
Counsel representing Democratic states, who have stepped in to defend the law because the Trump administration declined to do so, argued that the congressional failure to repeal the ACA wholesale was among the indications that lawmakers, ultimately, wanted to keep it.
If the bench of three justices decides to reject O’Connor’s decision later this year, it could discourage the Supreme Court from taking up the lawsuit, leaving in place the bulk of President Barack Obama’s signature domestic policy achievement. Conversely, the Fifth Circuit could also reaffirm his position and send yet another constitutional challenge to the ACA in front of the nine justices, who’d likely have no choice but to hear the case.
The stakes of the lawsuit are significant: If Obamacare were, in fact, ruled unconstitutional, that could mean that health insurers could once again refuse coverage or otherwise discriminate against patients who have preexisting conditions. Additionally, it would mean that roughly 20 million people who obtained insurance after the ACA was implemented could lose it. (Neither of these consequences, however, would necessarily take place until after the Supreme Court had a chance to weigh the case and reach a final conclusion.)
The court’s decision could also have major political implications for 2020. Next year’s elections are approaching rapidly, and this case is once again putting the ACA and the fight for health care — a subject Democrats successfully ran on in 2018 — at the center of the political conversation. If another challenge were to come in front of the Supreme Court, it’s all but certain Democrats will rally voters as they attempt to defend the law.
The challenge against the ACA, briefly explained
The crux of this case comes down to a tenet of the 2017 Republican tax cuts, which effectively eliminated a penalty that people would have to pay if they did not enroll in health insurance.
Known as the individual mandate, this part of the Affordable Care Act was intended to push people to purchase insurance in order to more evenly distribute health care costs and make covering Americans with chronic illnesses more economically feasible for insurance companies. While the tax law did not undo the individual mandate itself, it made the penalty $0. In doing so, it provided some opponents of the ACA fodder to levy a legal challenge, as Kliff wrote:
The Supreme Court specifically upheld the individual mandate as a tax. If ... the mandate doesn’t have a penalty, the attorneys general argue, then it’s no longer a tax — and thus unconstitutional.
On its own, a court decision that declares the individual mandate unconstitutional wouldn’t be a big deal for Obamacare. The financial penalty is, after all, already gone.
But the state attorneys general take their case a step further. They argue that, if the individual mandate is declared unconstitutional, than the rest of the law needs to fall along with it. Or, as the lawsuit itself puts it: “Once the heart of the ACA—the individual mandate—is declared unconstitutional, the remainder of the ACA must also fall.”
As the state attorneys general from Texas, Georgia, and Wisconsin have argued, the individual mandate and the rest of the ACA are inextricably tied together. If the individual mandate is invalidated, they suggest, the ACA should be invalidated as well.
The plaintiffs’ argument is one that O’Connor agreed with in his December decision, which went even further than the argument initially put forth by the Trump administration’s Department of Justice. Since the DOJ has declined to defend the law, a group of state attorneys general from left-leaning states, and House Democrats, have stepped in to advocate for the ACA.
“The Court finds the Individual Mandate ‘is essential to’ and inserverable from ‘the other provisions’ of the ACA,” O’Connor wrote as part of his December ruling.
Legal experts say the argument against the ACA is a weak one
Legal experts have suggested that the argument that’s being used by states to dismantle the ACA isn’t particularly robust.
“This is insanity in print, and it will not stand up on appeal,” University of Michigan law professor Nicholas Bagley tweeted after O’Connor ruled against the ACA in December.
The main issue that many experts have taken with the district court ruling has to do with a legal term known as “severability,” Vox’s Dylan Scott writes:
If one provision in a law is invalidated by a court, can the rest of it stand without it? Texas is arguing that the individual mandate is so central to Obamacare that if it is unconstitutional, then the rest of the law is too.
In other words, O’Connor determined that the entirety of the ACA could be classified as unconstitutional simply because the individual mandate portion of it could be construed this way.
“Courts, however, usually decide that question by looking at Congress’s intent when crafting the law, and that’s where many experts say the states’ arguments fall apart,” Scott writes. They point to Congress’s handling of the individual mandate penalty as clear evidence that rebuts the conservative argument.
“Even if they conclude that the penalty-less mandate is unconstitutional, the case should be reversed on severability,” Georgetown University health insurance reforms expert Katie Keith told Vox.
Because Congress opted to reduce the penalty associated with the individual mandate but kept the rest of the ACA intact, this suggests that congressional intent was to preserve the other pieces of the ACA. For the Court to interpret otherwise is a major stretch, experts say.
Additionally, there’s a question of whether the state attorneys general even have the standing or the legal qualifications needed to bring forth this suit, Keith says. Parties typically have “standing” to sue if they can prove that they’ve been harmed by a particular policy. The Fifth Circuit could determine that the plaintiffs do not and dismiss the case as a result.
“Judge O’Connor’s decision didn’t address the standing of the plaintiff states and relied only on the standing of the two individual plaintiffs,” she says. “His conclusions on standing have been highly criticized, and there’s prior Fifth Circuit precedent on this issue that O’Connor largely dismisses.”
Despite an overwhelming sense that the legal justification for this challenge is relatively lackluster, however, there have been other ACA challenges that were perceived as “frivolous,” which wound up reaching the Supreme Court and ultimately endangering the law. And it’s still a possibility that this could happen again.
“Given that Texas is the plaintiff and [Bill] Barr is the Attorney General, who knows what will happen,” Boston College health law professor Mary Ann Chirba told Vox. “Reason, logic, legal precedent, and principle seem to matter little these days.”
Oral arguments on Tuesday provided a glimpse of the Fifth Circuit’s questions
It was clear from oral arguments on Tuesday that the Republican-appointed Justices on the Fifth Circuit were mulling whether O’Connor’s assessment of the case was, in fact, warranted.
Elrod seemed to follow the logic O’Connor laid out, which suggested that the repeal of the individual mandate penalty was a way for Congress to indirectly undercut the entire law. She suggested that lawmakers may have thought, “Aha, this is the silver bullet that’s going to undo Obamacare.”
Engelhardt also asked why the Republican-controlled Senate wasn’t a part of legal proceedings, much like House Democrats are, if the intent of Congress was to ultimately maintain the law as it stands. “Why would the Senate not also be here to say, ‘Oh, this is what we meant when we wrote this?,’” he said. “They’re sort of the 800-pound gorilla that’s not in the room.”
Both their reactions have led those closely following the case to speculate that the judges may be more open to considering O’Connor’s line of thinking than many legal experts have been.
“It didn’t go well today in court for the defenders of the Affordable Care Act, I think that’s safe to say,” University of Michigan law professor Nicholas Bagley told MSNBC’s Chris Hayes. “It was really a surprise to see the two Republican-appointed judges on the court today to really embrace an argument that almost everybody would have put well beyond the pale.”
Judge Carolyn Dineen King, the one Democratic appointee who presided over the case, did not ask any questions during the 90-minute arguments.
This case could next head to the Supreme Court — and become a central talking point of the 2020 elections
Regardless of which way the Fifth Circuit rules, it’s likely the side that loses will appeal the case to the Supreme Court.
Were the Court to hear the case, this will be the third time it will be asked to determine the legality of the ACA — something it’s upheld in both NFIB v. Sebelius and King v. Burwell.
Whether that happens or not will likely depend on the The Fifth Circuit’s decision: the Supreme Court justices may decide not to take it up if the appeals court rejects the lower court ruling.
“If the Fifth Circuit upholds the entire decision from below — that the mandate is unconstitutional and not severable — it would invalidate the entire ACA, and the Supreme Court will be forced to take up the case,” University of Pennsylvania health law professor Allison Hoffman told Vox. “With any other decision from the Fifth Circuit, it is much less likely that the Supreme Court will take the case.”
In the event that the Fifth Circuit opts to overturn the district court ruling, its decision could potentially be the final say on the matter, giving Democrats another major win on this subject.
The ongoing back-and-forth on this case could also catapult the fight over the ACA and protections for those with preexisting conditions to the forefront of the 2020 election. Democrats ran heavily on this issue to win over key swing districts in 2018. Republicans may be eager for the focus on it to die down so they don’t get beat with this same playbook again.
