A Case That Should Have Been Laughed Out of Court May Kill Obamacare

An appeals court ruled yesterday that the health-care law contains a constitutional flaw—and that most or all of the law may have to be scrapped.

The Supreme Court at night
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In an opinion blending arrogance and cowardice in equal measure, an appeals court ruled yesterday that the Affordable Care Act contains a constitutional flaw—and that most or all of the law may have to be scrapped. But the court was coy about just how much of the law has to go, and punted that decision back to the same judge who, last December, declared the entire law invalid.

What happens next is uncertain. The Supreme Court might choose to hear the case, Texas v. United States, right away, setting up a constitutional showdown that could become the centerpiece of the 2020 presidential election. Or the justices could wait until the lower court rules, leaving the fate of Obamacare in limbo for years.

Neither outcome is good. And it’s all completely unnecessary. The case is a partisan stunt that’s been roundly condemned by lawyers on both sides of the aisle. It should’ve been laughed out of contention long ago. The opinion from the U.S. Court of Appeals for the Fifth Circuit is an embarrassment, both to the Republican-appointed judges who put their names to it and to the federal judiciary as a whole. (The third judge on the panel, appointed by Jimmy Carter, dissented vehemently.)

The case centers on the individual mandate—the requirement that all Americans secure health insurance or pay a penalty. Back in 2012, the Supreme Court held that Congress didn’t have the power to coerce people into buying health insurance. If that’s what the individual mandate did, it would be unconstitutional. And that was the “most straightforward” way to read a law that said that people “shall” buy insurance. But, the Court reasoned, all the constitutional difficulties went away if the law were read as imposing a tax on the decision to go without insurance. That would give people “a lawful choice” about whether to buy coverage or pay the penalty. And so the individual mandate was saved.

Republicans never really accepted this outcome. In 2017, they tried to repeal the Affordable Care Act—but they didn’t have the votes. As a consolation prize, they zeroed out the penalty. Now if you go without insurance, nothing happens to you.

A bunch of attorneys general in red states saw an opportunity. They realized that the penalty’s elimination meant that the mandate didn’t look like a tax anymore. They filed suit in Texas, and pressed the argument that the word shall in the instruction to buy insurance must now be understood as an unconstitutional obligation. What’s more—and this is the really audacious move—they argued that this zero-dollar, unenforceable mandate was so crucial to the operation of the Affordable Care Act that the whole law was now invalid.

Judge Reed O’Connor, the conservative Fort Worth judge who heard the case, bought the argument hook, line, and sinker. The Trump administration also got in on the action and has argued that the law is completely invalid. The case was appealed, and in yesterday’s opinion, the Fifth Circuit signaled that O’Connor basically got this one right.

The court’s opinion contains a lot to dislike. There are the gratuitous partisan asides: “Some opponents” of the law “assert that the goal … was enacted as part of a fraud on the American people.” There’s the indefensible holding that two Texas consultants have been injured by a law that cannot be enforced against them. And there’s the casual disregard of a prior Fifth Circuit case that a tax that can’t be collected is still a tax for constitutional purposes.

But the core of the case is the Fifth Circuit’s conclusion that the zero-dollar individual mandate imposes a coercive command. “It is an individual mandate, not an individual suggestion.” Before the penalty was eliminated, the court reasoned, people had a choice about whether to buy insurance. But when Congress eliminated the penalty, it must have meant to subject people to government compulsion. The law is “only cognizable as a command.”

That’s balderdash. Eliminating the penalty was Congress’s way of giving people the freedom to drop their health insurance if they wanted to. Congress didn’t mean to force them to do anything.

I’m not just saying that. When the Supreme Court interpreted the Affordable Care Act back in 2012, it held that the individual mandate gives people “a lawful choice.” That wasn’t a tentative, provisional conclusion. According to the Supreme Court, that’s what Congress meant when it used the word shall.

That conclusion is still the law of the land, and it’s binding on the lower courts—even courts that really hate Obamacare. Whether the mandate is still a tax for constitutional purposes makes no difference. The law’s meaning—that it gives people a choice—stays the same, even if the constitutional terrain shifts. Otherwise, the Supreme Court has written, “every statute” would be rendered “a chameleon, its meaning subject to change depending on the presence or absence of constitutional concerns in each individual case.”

In its zeal to take down the Affordable Care Act, however, the Fifth Circuit sidestepped the pesky legal niceties that normally restrain activist judges. The arrogance is breathtaking.

Which brings us to the cowardice. Having declared the mandate unconstitutional, the judges had to confront what that meant for the rest of the Affordable Care Act—the exchanges, the subsidies, the Medicaid expansion, and all the rest. The general rule is that a court’s job is to preserve Congress’s handiwork, and that any unconstitutional part of a law should be “severed,” if possible, from the rest of the law. In this case, faithful application of that rule yields a simple answer: The court should strike down the (unenforceable) mandate and leave the rest of the law alone.

The Fifth Circuit could have said that. But it didn’t. Instead, it criticized the district court for taking the blunderbuss approach of invalidating the entire Affordable Care Act. Aren’t there some parts of the sprawling law, the court mused, that don’t have much to do with the mandate and might be left intact? Maybe the part requiring calorie counts to be posted on menus at chain restaurants? Or the parts that took effect before the individual mandate came into force, like the one allowing children to stay on their parents’ insurance until they’re 26?

Figuring that out, the Fifth Circuit reasoned, would require a “careful, granular approach” to the law. But O’Connor did “not do the necessary legwork of parsing through [its] over 900 pages.” And he didn’t adequately explain his conclusion that Congress’s elimination of the individual mandate “is evidence of an understanding that no part of the ACA could survive without it.”

So the court instructed O’Connor to try again, only this time to “employ a finer-toothed comb.” Maybe at the end of the day, the court said, the entire ACA really is invalid. Or maybe just big chunks of it are. Or maybe even the vestigial mandate can be severed altogether. Who knows?

I wouldn’t take that judicial shrug too seriously. O’Connor has already said that, even if he were to “parse the [law’s] provisions one by one,” his conclusion “would be the same.” We can be pretty confident about what he’ll do with the case on remand. The writing is on the wall for the Affordable Care Act.

The Fifth Circuit’s cowardice may be strategic. By refusing to say how much or little of the law has to go, the opinion avoids creating an immediate headache for Republicans going into the 2020 election. It may also reduce the odds that the Supreme Court will review the case right away: The Court doesn’t normally like to hear cases before they’re wrapped up.

Nothing about this case is normal, however. The attorney general of California, Xavier Becerra, has already announced that he’s heading to the Supreme Court. It only takes four justices to take a case, and maybe the four liberals will roll the dice. After all, Chief Justice John Roberts has turned back two much stronger challenges to the Affordable Care Act. He’s unlikely to endorse a lawsuit this silly. And waiting could be risky: Two of the liberal justices are in their 80s, and President Trump would replace them with hard-liners if given the chance.

For now, the Fifth Circuit’s decision changes nothing on the ground. But it stands as evidence, if any more were needed, that traditional legal restraints have become fragile in a time of partisan warfare.