The ACA Ruled Unconstitutional: What now?

Yesterday, a federal district court judge ruled the ACA (“Obamacare”) was completely unconstitutional. His rationale was as follows:

The ACA individual mandate was considered unconstitutional as a mandate on action by five justices in the Sebelius decision, but allowed as a proper example of taxing authority. However, there is no longer a “tax” on the decision not to follow the mandate, thanks to the 2017 tax overhaul. Therefore, the ACA has a mandate on individual action, which was determined to be unconstitutional in Sebelius. Since the mandate is integral to the entire act, the entire act must be found unconstitutional.

Needless to say, appeals will follow.

So, assuming that this decision is upheld on appeal, what now? Specifically, what can the Republican Party do/agree to that would implement the popular portions of the ACA (carrying children to 26, not barring/penalizing prior conditions, etc.) without violating the basic economic and governmental principles of the party? What will be done to protect people who’s insurance policies were being provided under the provisions of the act?

Easy: blame trump and move on without implementing anything. The only reason they’d need to implement anything is because of pressure from insurance companies to have some alternative to the growing Medicare for All movement, and quite frankly, they’d probably be happy with assurances that the Republican’s would obstruct/quash that too.

What, you think Republican voters hold their representatives accountable? No. Besides, it’s easy for Fox to say this was the inevitable outcome of the ACA, and it’s all Obama’s fault for making false promises. Or Trump’s fault, but now there’s no possible solution - though, I doubt Fox would be the one to throw Trump under the bus.

As I posted in the Pit thread:

As Greg Stohr, Supreme Court reporter for Bloomberg News noted on Tweeter:

“This is your occasional reminder that the five justices who voted to uphold Obamacare in 2012 are still on the Supreme Court.”

Still, this is a good moment to note that the do nothing Republicans are on notice that they have to do something about not just making things worse and work with Democrats towards a better replacement of the ACA…

Unless the Republicans prefer to be voted out of office, I’m ok with any of those results.

  1. Millions of people lose healthcare, uninsured rate jumps to near 20% and voters are looking for someone to blame.

  2. Proposals are made to restore mandate or otherwise fix problem but fail due to split between senate, house, and whitehouse.

  3. Trump and Republicans attempt to blame failure on House Democrats despite proposing no workable plan themselves.

4a) Voters in 2020 blame Republicans, leading to massive blue wave and either the restoration of the mandate or Medicare for all in 2021-2022
4b) Voters 2020 blame Democrats, meaning the reelection Trump and restoration of Republican majority in both houses, four years go by and then see 4a) except the timing is 2025-2026.
Most likely scenario IMHO is that this is overturned on appeal. The fact that the ACA won’t work without the mandate is a policy issue, not a legal issue. It is theoretically possible that the markets will stabilize even without it. So I don’t see how if follows that removing that section makes the whole thing unconstitutional.

Yes, but you’re fighting the hypothetical.

I can’t speak for the OP, but I read this as asking “what is the suitable alternative the Republicans can put forward?” rather than “what is going to happen next?”

And I say, the Republicans don’t need an alternative. All they have to do is successfully pin this on Trump, and when everything else blows up on him as well, this can be swept under the rug. A lot of the terrible ideas espoused by the Republicans will be white-washed away when they finally dump Trump. “We didn’t want this. We believed him when he said repeal and replace, just like you! Trump sure was a con man. Vote for a real Republican this time, and we’ll fix this mess… eventually…”

There’s a significant change in the equation now, though. The old saws – death panels, etc. – no longer work. President Obama made a big bet that if he could manage to give Americans even a taste of something approximating universal coverage, they’d never go back. I think he was right.

Despite every perversion of Obamacare (elimination of the public option, overturning the individual mandate, limited participation by states in the Medicaid expansion, messing with the Marketplace website and limiting the open enrollment period to make it harder for Americans to sign up, etc.), Republicans have not managed to kill it. While it’s not exactly popular, a majority of Americans now recognize that the reason it’s not working is down to Republican sabotage. Moreover, they realize that Republicans have no intention of offering an alternative.

So there’s no going back, and Obama wins.

For these reasons, I agree with points 1 - 4a made by Buck Godot. I don’t see how a majority of Americans ever blame Democrats. Even establishment Republicans such as Richard Painter are calling for Trump’s resignation now. Two years of Dems bagging on Republicans – and they will use health care as a primary cudgel – won’t help their cause. Of course, I’ve been wrong before.

Also agree that the most likely scenario is that this ruling is overturned on appeal. Roberts will view this as an easy opportunity to rehabilitate the image of the SCOTUS somewhat at very little cost, since Congress will have to make a fix one way or the other sooner or later.

ETA: I guess I’m fighting the hypothetical, too, as etasyde points out. If the OP is looking for a suitable alternative to be put out by Republicans, my guess is it’s going to look exactly like health care did before the ACA. Meaning nothing. Some may find that suitable, but I don’t believe the majority of Americans will.

That could had worked, when the ACA was unpopular; after years of finding what the ACA really was, most Americans now are in favor of the law, that BTW was not missed by the Republicans that ran in the last election as defenders of health care. (Not many swallowed that late pathetic pandering and most of the people voted for more in tune representatives to the House.)

As I noted, most Americans will not be amused now. So, in that case, voting the Republican rascals out it is.

The fact that the mandate was found integral to the Act as a whole goes to severability, which is very much a legal issue. And the court explained why that renders the whole statute unconstitutional under that doctrine.

Congress could always amend the tax to a nominal amount like $1 or even 1¢ which might survive Constitutional scrutiny and have pretty much the same effect. Seems like the best option if the ruling is somehow upheld but…

The decision being overruled on severability grounds I think is far more likely than a higher court finding that a tax of $0 is still a tax Constitutionally speaking

It is my understanding that severability is a judgement as to whether Congress views two part of the law inextricably linked. So how can the court hold that the mandate “tax” is not severable when Congress voted it out thereby severing it. That has to be Congress’ opinion, right?

Congress did not vote out the individual mandate per se, they just eliminated the penalty. Without the penalty, the mandate is basically inert, but it is still there in the code. It is pretty critical to making the ACA operate as intended, but to say that castrating the mandate means all the positive aspects of the law – the exchanges and subsidies and insurance regs – should then be nullified seems specious at best.

A NYT article earlier today stated, “The Trump administration immediately said — despite the president’s gleeful tweets hailing the decision — that it would continue to enforce the law until the appeals process plays out”.

This statement implies that the Executive Branch could have nixed the Act upon the judge’s ruling had it desired. Is that right? Or when a ‘lower’ Federal Court declares a law unconstitutional, must the law remain in effect until higher courts have reviewed it? Maybe the WH feared engendering widespread outrage if it had taken the former approach?

The ruling, once it is “final”, applies to the area within which it has effect. In this case, the Northern District of Texas (Dallas and north). Other district courts are free to rule in a different way.

The losing party can always ask the relevant appellate court (in this case, the 5th District Court of Appeal) for a stay of the effect of the ruling, pending the result of the appeal. How likely that is to be granted is often a function of how likely the appellate court thinks the appeal’s success is. But if there would be a substantial effect upon the insurance marketplace from having temporary uncertainty, the Court of Appeal might stay the ruling anyway.

My supposition is that the WH doesn’t want to provoke any inadvertent action that undercuts the decision, so they will let the process work out without creating any more chaos.

Congress did not repeal the ACA when they could have. They lowered the mandate penalty to zero. So if the two laws together are Unconstitutional, why is it that the ACA is found Unconstitutional rather than the repeal of the mandate “tax”? I thought courts were supposed to try to implement the will of Congress if possible. Obviously (in a legal sense) Congress did not wish to repeal the ACA.

Translation: Three staffers are sitting on Trump while a fourth holds his phone juuuust out of reach.

Argh, this is confusing. The N.Texas District Court made the ruling, which means the appeal will not be direct to a District Court but to the next level up, which is the Fifth Circuit (of TX/LA/MS). I think the level above Circuit is SCotUS.

My question would be, if the 5th reverses the ruling and SCotUS rejects (refuses to hear) the case, would the Circuit Court ruling take on national application (by precedent), or would the case have to be retried in each Circuit?

The tax cut eliminating the “shared responsibility payment” of the ACA was a clear act of Congress passed by the legislature and signed into law by the President. No way in hell a court rules such an act unconstitutional. Laying and collecting taxes is a clear power of Congress explicitly laid out in the Constitution.

The decision of judge O’Connor in the *Texas *case explicitly examines the difference between deferring enforcement of a tax and eliminating a tax. Congress chose to eliminate the tax in question.

Had Congress reduced the tax to a nominal peppercorn rate of $1 or even 1¢ as **DirkHardly **suggested then perhaps O’Connor’s decision would have been different. The incoming Congress could make such a change if they can muster enough votes and gain the president’s signature (or have enough votes to override a veto).

It was SCOTUS in NFIB v Sebelius that decided the shared responsibility payment provision in the PPACA is a tax.

<citations omitted by me>

The ACA without a shared responsibility payment provision no longer acts as a tax. Nothing is paid into the Treasury when taxes are filed, the amount owed is not related to income or filing status, and it does not raise any income for government. As such, it’s no longer a tax. Roberts and the 4 dissenters in NFIB all agreed that the Individual mandate is unconstitutional under the Interstate Commerce Clause as government can only regulate economic activity, not inactivity.

I goes from Federal District Court to a Federal Appeals Court and then to SCOTUS. On rare occasions SCOTUS can take a case that bypasses the Appeals Court.

If an Appeals Court affirms the District Court’s decision and SCOTUS declines to hear an appeal then the District Court’s ruling takes effect throughout that Appeals Court’s circuit (TX/LA/MS in this case). However a recent trend has had some Federal District Court judges issuing nationwide injunctions asserting that their rulings must have nationwide effect (see various Trump Travel ban decisions in District Courts throughout the 9th Circuit Court of Appeals area). O’Connor did not explicitly assert an nationwide injunction in his decision in the *Texas *case.

If the 5th Circuit reverses O’Connor’s District Court ruling and SCOTUS declines to hear an appeal then the ACA is in effect nationwide just as before the *Texas *case.

Whether the 5th Circuit affirms or overturns O’Connor’s decision from the District Court, a similar case could be filed in a different District Court elsewhere in the nation. It might end up with the same ruling or might end up differently. There is no need to have a case in every single District Court nationwide, just one District Court within the jurisdiction of a different Federal Court of Appeals is sufficient.

If, after the Appeals Court in a different circuit deals with the matter there are different outcomes from the 5th Circuit Court of Appeals that is referred to as a circuit split. SCOTUS is more likely to take up an appeal when there is a circuit split.

It doesn’t have to be Congress’ opinion, but it helps.

The ACA had a provision for mandatory Medicaid Expansion. The text of the ACA included a provision that if this Medicaid Expansion should be deemed unlawful (unconstitutional) then Congress wants the Medicaid Expansion to be severed.

The ruling in NFIB v Sebelius that upheld most of the ACA did find the mandatory Medicaid Expansion unconstitutional. Five votes - Roberts and the four conservative justices came to that conclusion.

Then the issue was what should the remedy be? Roberts and the four liberal justices agreed that the Medicaid Expansion could be severed as the text of the law stated. So they made the Medicaid Expansion optional, not mandatory, on the part of the states. Sure this created problems, but it is up to legislature to write laws, not judges.

So obviously Congress knew how to put a severability provision into a law. But they did not do so with regards to the Individual Mandate. In that case a court must decide what remedy is appropriate should the Individual Mandate be deemed unconstitutional. In doing so the court must decide if the Individual Mandate is severable or not.

O’Connor reasoned that the overall intent of the ACA is plainly stated throughout the law - to expand insurance coverage and lower premiums. Without an Individual Mandate insurance companies would be required to accept all applicants, even those with pre-existing conditions, but not be able to spread the risk by counting on healthy people signing up.

When insurance regulatory plans lacking an Individual Mandate had been tried before in the states it resulted in skyrocketing insurance rates which cause healthy people to drop out. This caused premiums to rise further causing a death spiral with higher overall premiums and fewer people insured. This is precisely what the ACA intended to avoid.

O’Connor reasoned that severing the Individual Mandate but otherwise leaving the ACA intact would go against legislator’s stated intent in passing the ACA. As such he ruled that the Individual Mandate was not severable and the entire ACA was unconstitutional.

nm i answered my own question

More directly to the spirit of the thread…

Going forward Congress is going to hear an outcry to fix this, now. Perhaps as DirkHandly suggested a mere peppercorn penalty could be tolerable for all but the most hardened Republicans. A key questions is if Democrats would go along with such a simple fix for now. Or perhaps the Dems will hold out for a Medicare-for-all system.

But a more serious issue is if the market can tolerate an insignificant penalty for not purchasing insurance without a significant selection bias problem. After all the purpose of the Shared Responsibility Payment was to encourage healthy people to buy insurance.