Wednesday, October 23, 2019

The Resilience of Obamacare in Reality if not Necessarily in the Trump-Packed Courts

by Michael C. Dorf

Today I shall have the pleasure of debating Prof Josh Blackman on the challenge to Obamacare now pending before the Fifth Circuit. Prof Blackman and I recently agreed with one another about amicus briefs in the SCOTUS (me here and him here). Today, I suspect we'll disagree--and not just because the event is billed as a debate. The Cornell Law School chapter of the Federalist Society is sponsoring the event, and I know from past experience that Fed Soc likes to promote its events as "debates," even when a term like "discussion" would be more accurate, because debates attract a larger audience than discussions.

Accordingly, I have sometimes found myself announced as debating some speaker only to end up agreeing with most of what the speaker says. But this time I suspect we will find plenty about which to disagree (though not disagreeably, of course).

Below I preview my argument, which leans heavily on the House reply brief in the pending appeal.

In 2012, in NFIB v. Sebelius, the Supreme Court rejected the claim that Congress lacked the power to enact §5000A (minimal essential coverage provision) of the Affordable Care Act (ACA). Chief Justice Roberts and the Court’s four Democratic appointees concluded that §5000A fell within the power of Congress to tax, because §5000A was part of a choice: People subject to it had the option of paying the tax (contained in another provision) or purchasing health insurance. As part of a package of changes to federal tax laws enacted in late 2017 Congress reset to $0 the tax owed for failure to obtain minimal essential coverage.

Judge Reed O’Connor concluded in an opinion issued last December that §5000A could no longer be seen as an exercise of the taxing power; and because five justices also thought it unsustainable under the Commerce Clause, he reasoned that it's now unconstitutional. Judge O'Connor held further that the Congress that enacted the ACA in 2010 and the justices who considered it in 2012 thought that the law as a whole could not function without §5000A, so the entire law--including completely unrelated provisions like the one allowing parents to maintain their adult children on their health insurance until age 26--was unconstitutional. In recognition of the extreme disruptiveness to health care and the broader economy, Judge O'Connor stayed his ruling pending appeal.

The Trump Justice Department likes the ruling, so it is not defending the ACA, but because the ACA continues in force, there's a live case or controversy. Very ably represented by a team led by Doug Letter, the House of Representatives is defending the law before the US Court of Appeals for the Fifth Circuit. Its argument has the following essential ingredients:

(1) Individual plaintiffs subject to §5000A lack standing because they are under no legal compulsion to do anything.

(2) State and other plaintiffs also lack standing, even though they are required to do something by the provisions the district court decided were nonseverable from §5000A because severability or nonseverability is a remedial doctrine that does not come into play until after a party with standing succeeds in challenging an invalid provision. The (red) state plaintiffs also say that §5000A leads to higher enrollment in Medicaid and thus higher state costs, but there is no record support for this claim, which is, in any event, not a basis for challenging §5000A.

(3) §5000A never was and still isn't a mandate; it was always an option to buy health insurance or pay a tax; that's still true now that the tax is $0; so the provision effectively now tells people to buy health insurance or not; which isn't a mandate and so isn't unconstitutional. As the House brief states: "Section 5000A can be upheld without reference to an enumerated power of Congress because it alters no legal rights or duties."

(4) The district court's reading of §5000A as a freestanding obligation notwithstanding the lack of coercive enforcement should be rejected on the alternative ground of constitutional avoidance.

(5) Even if §5000A is a mandate and unconstitutional, it's obviously severable because severing it would exactly track the intent of the last Congress to address the text--the Congress that in 2017 zeroed out the mandate "for the purpose of depriving the mandate of any practical coercive effect" while leaving "the remainder of the law intact."

(6) True, the 2017 Congress did not repeal the findings of the 2010 Congress to the effect that the mandate was essential to the functioning of other provisions of the law (especially the prohibition on screening out insureds with pre-existing conditions), but the 2017 Congress was under no obligation to do so, because findings are not operative. What the 2017 Congress did--leave the law minus any enforceable mandate intact--is much more salient than hortatory language from 2010 that it left in place.

(7) The usual factors that govern severability (as set out in US v. Booker), are (a) constitutionality of the provisions to be severed; (b) whether they can function without the invalid provision; and (c) whether severance is consistent with the statute's basic objectives. All three are satisfied here.

With respect to the second factor, the House brief says that whatever was projected in 2010, by 2017 it was apparent that the now up-and-running exchanges were sustainable even without an individual mandate backed by a substantial penalty. That fact was underscored by a story in The NY Times just yesterday with the headline "Obamacare Premiums to Fall and Number of Insurers to Rise Next Year." It shows that despite the efforts of the Republican Congress in 2017 and the Trump administration's deliberate failure to vigorously promote the ACA, the law remains a success. Yes, it would be an even bigger success had Congress not tried to gut it in 2017. But even the hobbled ACA has proven remarkably resilient.

Whether the ACA is sufficiently resilient to survive an increasingly Trump-packed judiciary is another question, but it is not, strictly speaking, a legal question.

2 comments:

  1. This lawsuit suggests the perils of the Supreme Court's blatantly wrong Commerce Clause / Necessary & Proper Clause reasoning in the Affordable Care Act Cases. If you allow the defense of the law to become narrower than it should have to be, you open up this sort of thing. The defense is appreciated, but it should be necessary.

    Finally, King v. Burwell (six justices, including one of the dissenters to the tax portion of the first set of cases) had a statement that in effect guarded against weak arguments not compelled (even if arguably somewhat open) if the result would be to make ACA not operable. Yes, some will argue THIS time the argument is really serious, but it's a telling warning.

    "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter."

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  2. BTW, like the Supreme Court, I favor the actual name of the legislation as compared to the misleading slang term that admittedly has been normalized.

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