The Supreme Court should rule the Obamacare law unconstitutional by upholding a judge’s ruling from two years ago that struck it down, lawyers for Texas and the Trump administration argued.
A telephonic hearing on Nov. 10 in the consolidated cases of California v. Texas and Texas v. California lasted 121 minutes, running over the 80 minutes scheduled (pdf).
Judge Reed O’Connor of the Northern District of Texas ruled on Dec. 14, 2018, that the Patient Protection and Affordable Care Act was unconstitutional in its entirety, but stayed enforcement during the appeals process.
When Congress in 2017 effectively repealed the mandate that compelled Americans to buy health insurance, it “sawed off the last leg it [Obamacare] stood on,” the judge held. “The court finds the individual mandate ‘is essential to’ and inseverable from ‘the other provisions of’” the Patient Protection and Affordable Care Act.
The law was enacted in March 2010 without a single Republican vote in Congress on final passage. Insurance premiums have since skyrocketed, and many consumers have been unable to afford premiums and have lost their insurance. Critics blame Obamacare for out-of-control costs and added bureaucratic red tape.
In a 2012 case known as NFIB v. Sebelius, the Supreme Court upheld the mammoth 2,000-page act as constitutional, on the theory that the individual mandate—which forced Americans to buy health insurance even if they didn’t want it—was a valid exercise of Congress’s power to tax. Chief Justice John Roberts surprised many by voting to uphold the law, leading to a 5–4 vote in favor.
The court again upheld the individual mandate in 2015 in King v. Burwell, in a 6–3 vote. Congress later denuded the mandate in the Tax Cuts and Jobs Act of 2017 by reducing the tax penalty for not purchasing insurance to zero effective 2019.
Nineteen states, including Texas, and consumers then filed suit contending that the revised law was unconstitutional because the individual mandate was so integral to the law that it can’t function without it. Sixteen states took the opposite position and argued the changed statute should be upheld.
Donald Verrilli, lawyer for the Democratic-controlled U.S. House of Representatives, flatly rejected the argument that the entire Obamacare statute should fall.
“There is just no way that Congress would have preferred an outcome that throws 23 million people off their insurance, ends protections for people with preexisting conditions, and creates chaos in the health care sector,” he said during the hearing.
“Respondents’ arguments take constitutional adjudication as a game of gotcha to a whole new level, but this is not a game. This Court’s precedents require respect for the constitutional role of Congress, and those precedents emphatically foreclose the outcome respondents seek.”
In response, Acting Solicitor General Jeffrey Wall said zeroing out the mandate is “the functional equivalent of a targeted inseverability clause,” as was argued in the NFIB case.
“Congress did a very targeted thing in 2017,” he told Justice Samuel Alito during the hearing. “It said we don’t want people to have to make this payment anymore if they don’t want to get insurance.”
Roberts and Justice Brett Kavanaugh seemed reluctant to find the statute unconstitutional.
Addressing Verrilli, Kavanaugh suggested it would be easy to void the mandate without invalidating the entire statute.
“I tend to agree with you this is a very straightforward case for severability under our precedents, meaning that we would excise the mandate and leave the rest of the act in place,” the justice said.
Justice Amy Coney Barrett asked Verrilli, “Why can’t we say that when Congress zeroed out the tax, it was no longer a tax because it generated no revenue, and, therefore, it could no longer be justified as a taxing power, so Congress was presenting it as a mandate which would have to be justified by the Commerce Clause?”
Kavanaugh also referred to the severability issue when questioning Texas Solicitor General Kyle D. Hawkins.
“Looking at our severability precedents, it does seem fairly clear that the proper remedy would be to sever the mandate provision and leave the rest of the act in place—the provisions regarding preexisting conditions and the rest,” he said.
“How do you get around those precedents on severability, which seem on point here?”
“I get around them by relying on the text of the statute,” Hawkins said, explaining that parts of the statute make it clear the mandate is “essential” to the functioning of Obamacare.
“There’s certainly no magic words requirement for a severability clause or an inseverability clause,” the attorney said.
“What we see in [section] 18091 is a repeated emphasis by Congress that the mandate is essential to what they were seeking to accomplish. This is not some fleeting reference in one provision. In subsections (h), 9 (i), and (j), we see [it] over and over again.”
“Congress knows how to write an inseverability clause. And that is not the language they chose here,” Kavanaugh said. “I agree with you about focusing on the text … but I just am having trouble seeing that as the equivalent of an inseverability clause.”
Let Congress Repeal
Roberts, who wrote the NFIB v. Sebelius decision, said justices should leave repeal of the law to elected lawmakers.
“On the severance question, I think it’s hard for you to argue that Congress intended the entire Act to fall if the mandate were struck down when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the Act,” Roberts told Hawkins.
“I think, frankly, that they wanted the Court to do that. But that’s not our job.”
Roberts’s statement about Congress not trying to repeal the Obamacare law is at odds with the historical record. The Tax Cuts and Jobs Act of 2017 that zeroed out the mandate-related penalty came out of the 115th Congress (2017–2018). In fact, lawmakers voted on several bills in that Congress that aimed to repeal Obamacare.
Hawkins laid out how the Supreme Court could invalidate the Obamacare law with a minimum of confusion and upheaval.
“I want to emphasize that we recognize the reliance interests at stake in this regulatory regime,” he said.
“The district court has stayed its partial final judgment. If this Court were to agree with us that the ACA’s invalid, that stay could be extended for an appropriate time to allow the states and political branches of the federal government an opportunity to accommodate those reliance interests.”