The Supreme Court announced on Monday that it will hear California v. Texas and United States House of Representatives v. Texas, two consolidated cases that represent an existential threat to Obamacare, and that were brought by a coalition of red states. That means that, for the third time since President Barack Obama signed the Affordable Care Act in 2010, the justices will hear a lawsuit seeking to eviscerate this legislation.
Texas turns on Congress’s decision to repeal Obamacare’s individual mandate. As originally enacted, the Affordable Care Act requires most Americans to either obtain health insurance or pay higher taxes. The tax law President Donald Trump signed in 2017 reduces the amount of that tax to zero.
Because the Supreme Court upheld the fully functional mandate as a valid exercise of Congress’s power to tax in 2012, the Texas plaintiffs argue that the zeroed-out version of the mandate is unconstitutional — how can something be a tax if it raises no money whatsoever? They also claim that the entire Affordable Care Act must fall if the deactivated mandate is unconstitutional.
The red states’ legal arguments against Obamacare are widely viewed as ridiculous, even by many lawyers and scholars who spent much of the last decade trying to convince the courts to repeal President Obama’s signature achievement.
Jonathan Adler, a conservative law professor — and a leading evangelist for an earlier lawsuit seeking to undercut the Affordable Care Act by reading a poorly drafted provision of the law to cut off much of the act’s funding — labeled many of the red states’ arguments “implausible,” “hard to justify,” and “surprisingly weak.” The Wall Street Journal’s editorial board labeled this lawsuit the “Texas Obamacare Blunder.” Yuval Levin, a prominent conservative policy wonk, wrote in the National Review that the Texas lawsuit “doesn’t even merit being called silly. It’s ridiculous.”
And yet, the lawsuit has received very favorable treatment from Republican federal judges. Judge Reed O’Connor, a former Republican Senate staffer turned district judge, ordered the whole Affordable Care Act repealed in its entirety. Two Republican federal appeals court judges reached a somewhat more mild conclusion — striking down a small portion of the law and then sending the case back down to O’Connor to reconsider which other provisions should fall. But, while that holding creates more work for Judge O’Connor, he remains likely to kill as much of the law as he can.
In addition to weighing the merits of the plaintiffs’ arguments, the Supreme Court will need to consider whether any federal court has jurisdiction to hear this case. As a general rule, no one is allowed to challenge a law in federal court unless they can show they were injured by that law. Because the zeroed-out mandate does nothing, it’s highly doubtful that anyone is allowed to challenge it.
Assuming that President Trump does not get to replace any of the current justices, the Supreme Court is unlikely to agree with the lower-court judges who ruled against Obamacare. Chief Justice John Roberts twice broke with his conservative colleagues in lawsuits attacking Obamacare, and Roberts is especially likely to reject the Texas plaintiffs’ legal arguments. But, so long as this lawsuit exists, it remains a threat to Obamacare. And there is no guarantee that the court’s membership will not change.
How we got to this point
As noted above, the Affordable Care Act originally required most Americans to either carry insurance or pay higher taxes. The Supreme Court famously upheld this provision, known as the “individual mandate,” as a valid exercise of Congress’ power to levy taxes in NFIB v. Sebelius (2012).
Congressional Republicans spent much of 2017 debating various plans to repeal Obamacare, but they ultimately did not have the votes for a broad repeal. They did, however, manage to repeal the individual mandate in the 2017 tax legislation. Though the United States Code still contains Obamacare’s language requiring individuals to pay a tax penalty if they do not have insurance, the amount of that penalty is now zero dollars.
The Texas plaintiffs claim that this shell of a mandate is unconstitutional. The fully functional mandate was constitutional because it is a tax, but a zero dollar tax is no tax at all. So the Texas plaintiffs argue that it must be unconstitutional.
That’s not a frivolous argument, but so what? The zeroed mandate already does nothing. So who cares if a provision of the law that literally does nothing at all is constitutional or not?
To achieve anything meaningful, the Texas plaintiffs don’t just need to convince the courts that a nothingburger mandate is unconstitutional. They also have to get a majority of the justices to embrace two other arguments: the claim that the Texas plaintiffs may challenge a legal provision that does nothing and the claim that the entire Affordable Care Act must fall. That, as Levin wrote, is utterly ridiculous.
No federal court is allowed to hear this case.
Before anyone is allowed to challenge a law in federal court, they must show that they’ve been injured in some way by that law — a requirement known as “standing.” That alone should be enough to doom the Texas litigation. Because the plaintiffs challenge a provision that does nothing at all, no one is injured by it. So no one has standing.
The plaintiffs argue they can get around this problem by pointing to the way Obamacare’s language laying out the individual mandate is structured. The first subsection of that language says that most individuals “shall” carry health insurance; the second says that people who don’t buy insurance pay a tax penalty; the third sets the amount of that penalty — which, again, is now zero dollars.
Although the penalty for not buying insurance is nothing, the plaintiffs claim that individuals are still bound by the language saying that they “shall” carry insurance — and therefore are injured by a law that commands them to do something they don’t want to do.
The biggest problem with this argument is that it runs counter to the Supreme Court’s decision in NFIB, the decision upholding the fully functional individual mandate. As Chief Justice Roberts explained:
Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Government agrees with that reading, confirming that if someone chooses to pay rather than obtain health insurance, they have fully complied with the law.
Thus, the Supreme Court explicitly rejected the Texas plaintiffs’ argument that they are bound by a command to buy insurance. There are no “negative legal consequences to not buying health insurance” except having to pay a tax penalty. Anyone who pays that penalty has “fully complied with the law.” And the amount of that penalty, in case this isn’t already clear, is now zero dollars.
The “severability” problem
But let’s assume, for a moment, that these plaintiffs have the standing to challenge a law that does nothing. Let’s also assume that the ex-mandate is unconstitutional. What then?
When a court strikes down one provision of a broader statute, it often must ask whether other provisions of the statute must fall along with it. This inquiry is called “severability,” and it’s typically a speculative inquiry. Courts ask which hypothetical law Congress would have enacted if it had known that a particular provision was invalid.
There’s no need to speculate in Texas, however, because Congress already answered this question. Lawmakers spent most of 2017 debating how much of the Affordable Care Act to repeal. Ultimately, they only had the votes to repeal one provision, the individual mandate, while leaving the rest of the law intact. So we know that Congress would have enacted a law that eliminated the individual mandate and kept the rest of the law because Congress enacted a law that eliminated the individual mandate and kept the rest of the law.
This conclusion is bolstered by the Supreme Court’s decision in Murphy v. NCAA (2018), which held that courts should apply a very strong presumption against striking additional provisions of a law when one provision is declared unconstitutional. “In order for other … provisions to fall,” Justice Samuel Alito wrote for the Court in Murphy, “it must be ‘evident that [Congress] would not have enacted those provisions which are within its power, independently of [those] which [are] not.’”
The question facing the Supreme Court now, in other words, is whether the Court will apply its ordinary standing rules as well as the rule it announced in Murphy, in a politically charged case involving a law that Republicans hate above all others. Roberts has twice signaled that he is not willing to embrace dubious legal claims in order to undercut Obamacare, so the Texas plaintiffs are unlikely to prevail.
But if Trump gets to fill another Supreme Court seat, all bets are off.